The Companies Act of Malaysia requires every private limited company in any parts of Malaysia to appoint an approved Malaysia company auditor or audit firm to audit its accounts and report to the members of the company annually.
For any business that is registered as a sole proprietor or partnership carrying out business in Malaysia is not required by law to have its financial statements audited annually.
All companies, regardless of their size, 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 Annual General Meeting (AGM).
To be an approved Malaysia company auditor, the applicant is required to be a member of Malaysian Institute of Accountants (MIA) and must be approved by the Ministry of Finance to practice as auditors in Malaysia. The audit license can be obtained with recognized academic or professional qualification and relevant professional practical experience. 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.
Malaysia Company Audit must be performed to obtain reasonable assurance whether the financial statement of the company is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
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. An audit of financial information enhances the credibility and reliability of financial information and financial statements. Reliable information is necessary for users of the financial information such as investors, creditors and financial institutions.
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.
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