Auditors in Malaysia
In the accounting world, an internal audit is done by the full-time staff [of the same office] to troubleshoot weakness in system and procedure. Meanwhile, the statutory audit is the act of checking books of accounts as per the provision of company act.
Company Statutory Audit
In Malaysia, it is mandatory for every sdn bhd company to appoint an approved auditor for their companies according to the Companies Act 2016 unless exempted. In addition to this, all companies’ accounts must be audited by the auditors annually before their Annual General Meeting (AGM). The audited accounts (audited financial statements) will be approved by the shareholders during the AGM. However, not all enterprises (sole proprietors) or partnerships need to appoint auditors to audit their accounts according to Business Registration Act.
Who is Approved Auditors in Malaysia?
As the name goes, an approved auditor in Malaysia is a member of Malaysian Institute of Accountants (MIA) and he or she must be approved by the Ministry of Finance to practice as auditors in Malaysia. The Ministry will grant a two-year audit license for approved auditors in Malaysia and the audit license is renewable.
What Does Auditor Work Look Like?
Auditors conduct their audit in accordance with the approved auditing standards in Malaysia. Those auditing standards require auditors 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 auditors’ 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 auditors. 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).
If your company needs an approved auditor and you are unsure, whether your company is audit exempted or not, feel free to get in touch with us. Our professional team will surely assist you to clarify any issues you have in the company audit matters!