AUDITOR EXPLAINS: Why we left after 20 years
External auditor Baker Tilly called for a meeting after six church members were charged.
Baker Tilly managing partner Sim Guan Seng, who audited the church accounts, said he wanted an update and wanted to meet new Board members after those charged were removed.
"We wanted to find out what the charges are about... and what action the church is going to take because all this would have some bearing on our audit for 2010," he said.
The prosecution has accused City Harvest Church founder Kong Hee and five deputies of misusing more than $50 million of church money through sham bonds to further pop singer Sun Ho's career. (See other report.)
Among the answers Mr Sim sought: Whether the church had carried out an investigation when making a press statement that "no money was lost".
During the July 2012 meeting, Mr Sim said Pastor Aries Zulkarnain confirmed no special investigation had been or would be carried out. Church lawyers had advised making the statement to address members' concerns.
Baker Tilly discharged itself after failing to get satisfactory answers.
The client-auditor relationship with City Harvest spanned about 20 years, from the time the church started.
But it ended last October after Baker Tilly representatives were unable "to get any satisfactory answers to anything", he said. The firm had been in the midst of conducting the 2010 church audit and raised several issues, which the management and board did not respond to.
Among the concerns Mr Sim had: The lack of information on the Special Opportunities Fund (SOF) the church invested in and the lack of formal process to monitor investment performance.
The firm decided to step down as "we're unable to discharge our duty as an auditor".
Baker Tilly also resigned as auditor of Xtron, the company that used to manage Ms Ho.
Movement of funds suggested investments were not made for the purposes stated.
Investments that the church made, such as the SOF and advanced rental to Xtron, were eventually redeemed. This meant the auditor would no longer have any concerns about the transactions.
But Mr Sim was not aware of e-mail discussions about fund movements. If he had known, he would have raised more questions, reviewed earlier conclusions and reviewed some of Xtron's previous audits.
"One would question whether the second bond was entered into in order to avoid question on the first ($13 million bond)," he said. "Looking (at) the e-mail, definitely the $13 million would be questioned in audit."