The audit process for Sdn Bhd (Sendirian Berhad) companies in Malaysia is guided by the Companies Act 2016 and Malaysian accounting standards. A statutory audit is a legal requirement for all non-exempt Sdn Bhd companies to ensure that their financial statements present a true and fair view of their financial position.
Here’s an overview of how the audit process typically works:
- Appointment of an Auditor
Under Section 267 of Companies Act 2016, every company must appoint an approved company auditor. This must be done within 30 days of incorporation or within 30 days before the first annual general meeting (AGM).
- Pre-Audit Planning
The auditor will begin by understanding the company’s business, internal controls, and financial systems. This helps identify risk areas and develop an audit plan. Communication with the company’s management is critical during this stage.
- Collection of Financial Information
The company provides financial documents, such as ledgers, bank statements, invoices, payroll records and tax filings. Supporting documentation and explanations for any unusual transactions or balances are also collected.
- Fieldwork and Testing
The auditor performs detailed testing, including checking accounting entries, verifying balances, and confirming transactions with third parties (i.e., banks or suppliers). Internal controls are also evaluated to assess their effectiveness.
- Drafting of the Audit Report
Upon completion of the testing, the auditor prepares a report that states their opinion on whether the financial statements reflect a true and fair view. If discrepancies or concerns are found, a qualified or adverse opinion may be issued.
- Discussion and Finalization
Before finalizing the audit, the auditor discusses the findings with the company’s management. Any adjustments or clarifications needed are made before issuing the final audit report.
- Submission to Authorities
The audited financial statements must be approved by the board and submitted to the Companies Commission of Malaysia (SSM) and shared with the shareholders within the prescribed time-frame, typically within 30 days after the AGM.
At Jamal, Amin & Partners, we provide end-to-end statutory audit services for Sdn Bhd companies. Our goal is to ensure a smooth, transparent and compliant audit experience. We guide clients through every step, from initial planning to final submission.
In conclusion, audits for Sdn Bhd companies are not just a statutory formality, they are an essential tool for verifying financial integrity, supporting business growth and enhancing credibility with external stakeholders.