Audit Exemption Comes into Effect in Malaysia

On 4 August 2017, the Companies Commission of Malaysia, or SSM (its Malay acronym), has brought into force audit exemption for certain categories of private companies. SSM has issued Practice Directive No. 3/2017 to set out the qualifying criteria for private companies to be exempted from appointing an auditor for a financial year. SSM’s FAQ document has also been updated as at 4 August 2017 to address questions regarding audit exemption.

Credit: Nick Youngson – http://nyphotographic.com/

 

The following types of private companies can decide to opt for audit exemption:

  1. Dormant companies;
  2. Zero-revenue companies; and
  3. Threshold-qualified companies – annual revenue of RM100,000 or less, total assets of RM300,000 or less, and 5 employees or less.

I expand on this further below and also set out four observations. Continue reading

Speaking at the MIA Audit Committee Conference 2017

I have been invited to speak at the MIA Audit Committee Conference 2017 on 5 April 2017. The conference will be held at the Connexion Conference & Event Centre. The registration form can be downloaded over here.

I will be speaking at the panel session on the Companies Act 2016 and its impact on the audit committee’s responsibilities. We will be covering the new management requirements, the utilisation of share premium and the capital redemption reserve and the new business review section. It is a good combination of speakers drawn from across the various industries. I am very much looking forward to this.

Companies Act 2016 Audit Exemption: Opposition to Exempting Small Companies

In my earlier post, I had highlighted the proposed audit exemption for dormant companies and small companies under the Companies Act 2016. This would be carried out through a Practice Directive on Audit Exemption. The Companies Commission of Malaysia (SSM)  invited feedback on this proposed move.

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Pic from NY – http://nyphotographic.com/

SSM has now published the feedback it has received and has extended the deadline for feedback until 28 February 2017. From the feedback, there appears to be mixed views. In general, there is support for allowing dormant companies to no longer require an auditor. However, there are differing views on whether to allow audit exemption for small companies. A majority of the responses objected to such an exemption. Continue reading

Companies Act 2016: Small Companies Do Not Need Auditors

Under the Companies Act 2016, it appears that dormant companies and small private companies will no longer need to appoint auditors. This audit exemption will allow startups and SMEs to enjoy further cost savings in the running of their businesses.

Allowing for audit exemption also brings Malaysia in line with practices in other countries like the UK, Australia and Singapore.

[edit: The Companies Commission of Malaysia has now published the feedback it has received on the public consultation on the proposed audit exemption. I have written about it here.]

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Image from NY – http://nyphotographic.com

Continue reading