employees of 30 or less.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\nThe above requirements are implemented in phases as explained in the below paragraphs.<\/p>\n
Private companies meeting the requirements are not required<\/strong> to appoint an auditor<\/strong>.\u00a0 At minimum, the appointment of qualified accountant registered with Malaysian Institute of Accountants (MIA) is required to meet the basic requirement of the preparation of financial statements in accordance with approved accounting standards, issuance of Audit Exemption Certificate and meeting provision of the companies act 2016 as directed by the authorities.\u00a0 In this case, the qualified accountant is assuming the compliance role that was traditionally undertaken by external auditor in ensuring the financial statements are in compliance with the laws and regulation in Malaysia.<\/p>\nKey Audit Exemption Categories (Effective 2025)<\/strong><\/p>\nThe Companies Commission of Malaysia (SSM\/CCM) categorizes exempted private companies into three types:<\/p>\n
\n- \n
\n- Dormant Companies:<\/strong>\u00a0Companies that have been inactive since incorporation or were inactive throughout the current and immediate past financial year.<\/li>\n
- Zero-Revenue Companies: <\/strong>Companies with no revenue during the current and immediate past two \u00a0\u00a0financial years, with total assets of RM300,000 or less.<\/li>\n
- Threshold-Qualified Companies:<\/strong>\u00a0Companies that meet at least two of the following criteria for the current and past two financial years:\n
\n- Annual revenue\u00a0of RM3 million or less.<\/li>\n
- Total assets\u00a0of RM3 million or less.<\/li>\n
- Employees\u00a0of 30 or less.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
\n- Phased Implementation (2025-2027)<\/strong><\/li>\n<\/ul>\n
The new thresholds are being phased in to ease the transition:<\/p>\n
\n- \n
\n- 2025:<\/strong>\u00a0Revenue\/Assets\u00a0of RM1Million or less, Employees of 10 or less.<\/li>\n
- 2026:<\/strong>\u00a0Revenue\/Assets\u00a0RM2M or less, Employees of 20 or less.<\/li>\n
- 2027:<\/strong>\u00a0Revenue\/Assets\u00a0RM3M or less, Employees of 30 or less.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
Exceptions to Exemption<\/strong><\/p>\n\n- \n
\n- Shareholder Request:<\/strong>\u00a0Shareholders holding at least 5% of total shares can request an audit, which the company must comply with.<\/li>\n
- SSM Demand:<\/strong>\u00a0The SSM may issue a written notice requiring a company to audit its accounts.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
Important Reminders<\/strong><\/p>\n\n- \n
\n- Financial Reporting:<\/strong> Even if exempt from audit, companies must still prepare and lodge financial statements based on approved accounting standards and companies act 2016, and tax returns.<\/li>\n
- Directors<\/strong> responsible for financial management of the company are required to issue a Certificate of Audit Exemption<\/strong>.\u00a0 It is a declaration by the directors that the company meet all requirement for audit exemption, and the financial statements are prepared in accordance with approved accounting standards and the companies act 2016.<\/li>\n
- Dormant Company Eligibility:<\/strong>\u00a0Dormant companies must be truly inactive to qualify, meaning they have not had any accounting transactions.<\/li>\n
- Annual Return:<\/strong>\u00a0An annual return submitted to the SSM for an exempted company should not show the name or details of an auditor.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
We, Megat Faizal Musa & Co., a firm of Chartered Accountants and a Member Firm of Malaysian Institute of Accountants, specializes in Accounting and Secretarial Services.\u00a0 Contact us at customerservice@mfmco.my<\/em> for more information.<\/p>\n","protected":false},"excerpt":{"rendered":"Private companies in Malaysia (Sdn. Bhd.) can be exempted from mandatory audit if they meet specific criteria under Practice Directive 10\/2024 from the Companies Commission of Malaysia (SSM\/CCM), effective from January 1, 2025. Eligible companies\u2014dormant, zero-revenue, or threshold-qualified\u2014must satisfy at least two of the following requirements: annual revenue\u00a0of RM3 million or less, total assets\u00a0of RM3 … <\/p>\n
Continue reading “Audit Exemption of Private Companies in Malaysia (New Directives)”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":1910,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"footnotes":""},"class_list":["post-2011","page","type-page","status-publish","has-post-thumbnail","hentry"],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/mfmco.my\/index.php\/wp-json\/wp\/v2\/pages\/2011","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mfmco.my\/index.php\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/mfmco.my\/index.php\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/mfmco.my\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mfmco.my\/index.php\/wp-json\/wp\/v2\/comments?post=2011"}],"version-history":[{"count":11,"href":"https:\/\/mfmco.my\/index.php\/wp-json\/wp\/v2\/pages\/2011\/revisions"}],"predecessor-version":[{"id":2023,"href":"https:\/\/mfmco.my\/index.php\/wp-json\/wp\/v2\/pages\/2011\/revisions\/2023"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mfmco.my\/index.php\/wp-json\/wp\/v2\/media\/1910"}],"wp:attachment":[{"href":"https:\/\/mfmco.my\/index.php\/wp-json\/wp\/v2\/media?parent=2011"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}