PUBLISH BY CHAN N CO
ABOUT AUDIT FIRM IN MALAYSIA
Company Statutory Audit
In Malaysia, it is mandatory for every Sdn. Bhd. company to appoint an approved company auditor for company registered under Companies Act 2016 unless it’s exempted. In addition to this, all company accounts must be audited by the auditor annually before their Annual General Meeting (AGM). The audited accounts will be approved by the shareholders during the AGM.
Who is Approved Auditors in Malaysia?
An approved company auditor in Malaysia is a member of Malaysian Institute of Accountants (MIA) and audit license is granted by the Ministry of Finance to be an auditor in Malaysia. The Ministry will grant a two-year audit license for approved company auditor in Malaysia and the audit license is renewable.
What are the roles of an auditor?
Auditor conduct his audit in accordance with the approved auditing standards in Malaysia. Those auditing standards require auditor to comply with ethical requirements and perform the audit to make sure that the financial statements are free from material misstatement.
Generally, an audit involves performing procedures to obtain audit evidence [about the amounts and disclosures] in the financial statements. The auditor’s judgment includes the risk assessment of the financial statements (whether due to fraud or error). In addition to this, an audit also includes evaluation of both the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluation of the overall presentation of the financial statements.
What is Audited Financial Statements
The audited financial statements, as the name suggests, are those accounts, which have already been audited by the approved company auditor. In the audit report, the auditor will justify whether the financial statements are prepared in accordance with Private Entity Reporting Standards and the Companies Act 2016 in Malaysia where the audited financial statement will give a true and fair view of the financial position of the Company.
Audit Exemption for Malaysia Private Limited Companies
In a recent announcement of the Companies Commission of Malaysia (“SSM”) on August 4, 2017, Practice Directive No. 3/2017 entitled “Qualifying Criteria for Audit Exemption for Certain Categories of Private Companies”, the qualifying criteria for audit exemption has been set out for certain private companies. The objective of the directive is to set out the qualifying criteria for private companies from having to appoint an auditor in a financial year (audit exemption).