An audit is a process of examining a company’s financial records to ensure that they are accurate and comply with the law. In Malaysia, companies are required to conduct an audit annually, and the Companies Commission of Malaysia (CCM) is empowered to exempt certain categories of companies from this requirement. This article will discuss when a company should conduct an audit in Malaysia and what exemptions are available.
When Should a Company Conduct an Audit?
A company should conduct an audit if it meets any of the following criteria:
- The company is a public company.
- The company has more than 50 shareholders.
- The company has total assets exceeding RM 3 million.
- The company has total revenue exceeding RM 20 million.
What Are the Exemptions Available in Malaysia?
The CCM is empowered to exempt certain categories of companies from the mandatory audit requirement. The requirements, benchmarks, and criteria for audit exemption are still to be established or decided. However, the following categories of companies are exempt from appointing an auditor for a financial year:
- Dormant Companies: A dormant company is exempt from audit requirements if it has been dormant from the time of its formation or has been dormant for three consecutive financial years.
- Small Companies: A private company qualifies as a small company if it meets at least two of the following criteria for immediate past two consecutive financial years:
- The company’s revenue for the current financial year and the preceding two financial years does not exceed RM100,000.
- The total assets reported in the company’s current Financial Statement and those of the previous two financial years do not exceed RM300,000.
- The company has no more than five employees at the end of its current financial year and each of the two preceding financial years.
Conclusion
In conclusion, companies in Malaysia are required to conduct an audit annually if they meet certain criteria. However, certain categories of companies are exempt from this requirement. If you are unsure whether your company needs to conduct an audit or if you qualify for an exemption, it is best to consult with Roger Yue & Associates.
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