Audit services
Rising Global Consultants
An audit is a systematic and independent examination of an organization's books, accounts, statutory records, documents, and vouchers
Statutory audit
The Companies Act of Malaysia requires every private limited company in Malaysia to appoint a qualified company auditor or audit firm to conduct an audit. All private limited companies in Malaysia, regardless of their size, must undergo an annual audit.
Unlike accounting services, audit services do not prepare any financial information but rather review the reliability of the information. The aim of an audit is to ensure the integrity of the company’s financial information, thereby enhancing confidence among investors, creditors, and financial institutions.
Unless your company is dormant, has zero income, or is a qualifying company, it must be audited annually.
Audit-related services
Qualified company auditor
A recognized company auditor must be a member of the Malaysian Institute of Accountants (MIA) and also requires approval from the Ministry of Finance to practice in Malaysia.
The Ministry of Finance issues a 2-year audit license to recognized company auditors, which needs to be renewed every 2 years.
The services we can provide include:
- Inspecting accounts and financial matters related to the company’s financial reports
- Reporting significant deficiencies in the company’s systems discovered during the audit to those responsible for governance
- Providing our audit opinion based on our audit findings
- Reporting to the company’s shareholders on whether the audited financial reports are true and fair
Under Section 267(2) of the Companies Act 2016, the Registrar has the authority to exempt any private company from the requirement to appoint an auditor for each financial year. The Practice Directive No. 3/2017 issued by the Companies Commission of Malaysia details the eligibility criteria for private company audit exemptions. This audit exemption does not apply to exempt private companies that have submitted a certificate related to their exempt private company status to the Registrar under Section 260 of the Companies Act 2016
Eligibility criteria for audit exemption of private limited companies
Dormant company
According to the definition by the Malaysian Accounting Standards Board, a dormant company is a private entity that meets the following conditions:
- The company has been dormant since its incorporation
- The company has been dormant in both the current and previous financial years
A company is considered dormant if it has not conducted any business or had any accounting transactions
Zero-income company
According to the definition by the Malaysian Accounting Standards Board, a zero-income company is a private entity that meets the following conditions:
- No income in the current financial year
- No income in the past two financial years
- Total assets in the current balance sheet and in the balance sheets of the last two financial years do not exceed RM300,000
As mentioned above, operating income does not include reversals and offsets of credit entries caused by previous entries, accounting entries related to taxes, reversals of reserves previously withdrawn, or gains from the derecognition of property, plant, equipment, and investment properties in the statement of comprehensive income.
If there is any income or receivable income, the company is not considered dormant. Costs incurred in maintaining the company are not factors in determining the company’s active or dormant status.
Threshold criteria met
- Revenue for the current financial year and the past two financial years (including receivables) does not exceed RM100,000
- Total assets in the current financial position statement (FS) and in the financial statements for the past two financial years do not exceed RM300,000 and
- The number of employees does not exceed five at the end of the current financial year and at the end of the past two financial years
Annual financial statements effective for periods starting on or after July 1, 2018
Other information about auditing knowledge
Submission of accounts requirements
1. Any company opting for audit exemption must, according to Section 258 of the Companies Act 2016, submit the unaudited financial statements to the Registrar within 30 days from the date of distribution to shareholders, along with an audit exemption certificate signed by the directors or the person primarily responsible for managing the company’s finances.
2. The unaudited financial statements should be prepared in accordance with approved accounting standards as stipulated in Section 244(1) of the Companies Act 2016.
3. According to Sections 251 and 252 of the Companies Act 2016, the unaudited financial statements should be submitted together with the directors’ report, directors’ statement, and statutory declarations.
Termination of audit exemption eligibility
Once a company no longer meets the audit exemption criteria, it will lose its audit exemption eligibility, but it should continue to benefit from audit exemption for the financial year in which it was eligible.
If a company that qualifies for audit exemption receives a written notice from any of the following parties during a financial year (no later than one month before the end of the financial year) requesting that the company audit its accounts, the company must audit its accounts:
1. Any shareholder entitled to vote and holding not less than 5% of the total issued shares of the company;
2. Not less than 5% of the total shareholders entitled to vote; or
3. The Registrar directing the company to conduct an audit.
Welcome to Contact Us
Phone Number: +60 3-8682 1802 | E-mail: officer@rising.com.my