In Malaysia, most companies are required to have their financial statements audited annually. This requirement stems from the Companies Act 2016, which mandates that every company must prepare audited financial statements unless they qualify as an exempt private company.
An exempt private company is a private company with not more than 20 shareholders and none of them being a corporate entity. Additionally, to be exempt from audit, the company must have annual revenue of RM100,000 or less, total assets not exceeding RM300,00, and not more than five employees throughout the financial year. Even so, these exemptions are subject to the discretion of the Companies Commission of Malaysia (SSM) and must be applied for each year.
For all other companies, including Sdn Bhds (private limited companies), public companies and foreign-owned businesses, auditing is compulsory regardless of size or revenue. This ensures that financial statements give a true and fair view of a company’s financial position and are in accordance with approved accounting standards.
Companies in regulated industries such as finance, construction, and healthcare often face additional audit requirements set by sector regulators such as Bank Negara Malaysia, Bursa Malaysia and the Ministry of Health.
Audited financial statements are essential not just for compliance, but also for securing loans, attracting investors, and building public trust. Banks and investors rely heavily on these documents to assess the credibility and viability of a business.
At Jamal, Amin & Partners, we help businesses navigate the audit requirements applicable to their company type and industry. Whether your business is new, growing or already established, understanding your audit obligations is vital to avoiding penalties and ensuring smooth operations.
In summary, while some small private companies may qualify for audit exemption, the majority of businesses in Malaysia are required to conduct annual audits. Given the compliance, financial and reputational benefits, engaging with a reliable audit partner ensures your company remains on the right side of regulation and business industry.