Statutory Audit & Auditors In Malaysia
Company Statutory Audit
Every sdn bhd company is required by the Companies Act 1965 to appoint an approved auditor for their companies.
Whether active or not, large or small, all companies must have its accounts audited by the auditors every year before the Annual General Meeting (AGM). The shareholders shall then adopt and approve the audited accounts (audited financial statements) during the AGM.
All enterprises (sole proprietors) or partnership are NOT required by Business Registration Act to appoint auditors to audit their accounts.
Approved Auditors in Malaysia
An approved auditor in Malaysia is a member of Malaysian Institute of Accountants (MIA) and he must be approved by the Ministry of Finance to practice as auditors in Malaysia.
The Ministry will grant an audit license for approved auditors in Malaysia for a period of two (2) years and the audit license is renewable.
How Auditors work
The auditors shall conduct their audit in accordance with approved standards on auditing in Malaysia. Those standards require that the auditors comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditors’ judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditors consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
What is Audited Financial Statements?
The audited financial statements are those accounts which have already been audited by the company auditors.
The auditors will at the auditors’ report express an opinion whether the financial statements are prepared, in all material respects, in accordance with Private Entity Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Company.
The audit fee is normally based on the degree of skill and the time necessarily occupied on the assignment.
Please refer to Audit Fee Schedule & Table for more details