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01
What is an audited report?
An audited report is the auditor's report attached to a company's financial statements. It is an independent auditor's opinion on whether the financial statements are properly drawn up, give a true and fair view, comply with the Companies Act 2016 and comply with applicable approved accounting standards.
Financial statements
- Directors are responsible for financial statements
- Accounting records must support the figures
- Financial statements are approved by the board
Audit opinion
- The auditor audits the financial statements
- The auditor forms an opinion on true and fair view
- The auditor also considers records and information obtained
The auditor does not simply prepare the accounts. In practice, accounts are prepared from bookkeeping records first, then the auditor performs audit procedures and issues the auditor's report.
02
Who needs an audit in Malaysia?
Under Companies Act 2016 section 248, financial statements are to be audited before being sent to members, unless a valid audit exemption applies.
Public companies have stricter governance. Financial statements are tabled at the AGM and lodged with SSM within 30 days after the AGM.
LLP compliance follows the LLP framework. LLPs do not use the same Sdn. Bhd. shareholder/director audit process, and requirements should be checked under the LLP rules and sector requirements.
A sole proprietor is not a company and does not have the same statutory company audit requirement, but proper records are still needed for LHDN and business purposes.
Audit requirements can also arise from banks, grants, investors, licence conditions, shareholders, group reporting or internal governance even when statutory exemption may be available.
03
Financial year end and filing timeline
The financial year end, or FYE, is the closing date of the company's accounting period. It drives the accounting, audit, tax and SSM filing schedule.
- 1
Prepare financial statements
For subsequent financial years, directors prepare financial statements within 6 months of the FYE. For the first financial statements, the Companies Act 2016 gives an 18-month period from incorporation.
- 2
Audit if required
If the company does not validly rely on audit exemption, the financial statements must be audited before circulation.
- 3
Circulate to members
For a private company, financial statements and reports must be circulated within 6 months after FYE.
- 4
Lodge with SSM
For a private company, lodgement is within 30 days after the financial statements and reports are circulated to members. For a public company, lodgement is within 30 days after its AGM.
04
Who can act as company auditor?
Under Companies Act 2016 section 263, a company auditor must be approved by the Minister charged with responsibility for finance. Section 264 contains disqualification rules to protect auditor independence.
Not just any accountant
The auditor must be an approved company auditor for Companies Act purposes.
Conflicts matter
Indebtedness, officer relationships, employment relationships and shareholding conflicts may disqualify a person.
True and fair view
Section 266 requires the auditor to report whether the financial statements are properly drawn up and give a true and fair view.
05
What should management prepare before audit?
A smoother audit starts long before the auditor asks for documents. Directors should ensure accounting and other records are complete, supported and organised.
General ledger, bank statements, sales invoices, purchase invoices, payroll records and bank reconciliations.
Statement of financial position, profit or loss, cash flow statement where applicable, notes and supporting schedules.
Contracts, loan agreements, fixed asset register, tenancy agreement, tax documents, related party schedules and stock records.
Review personal expenses, unusual transactions, director advances, related party balances and missing documents early.
06
How does audit exemption fit in?
Audit exemption is a separate topic. A qualifying private company may be exempt from statutory audit for a financial year, but it still needs to prepare, circulate and lodge financial statements and related documents according to the applicable SSM framework.
Common misunderstanding
Audit exemption does not mean no accounts, no SSM filing or no tax filing. It only affects the statutory audit requirement for eligible years.
Read our separate guide: Malaysia Audit Exemption Guide.
07
Why audited accounts matter for SMEs
Even where audit exemption may be available, audited accounts may still be useful for business credibility and external review.
Bank loan or facility
Banks may use audited accounts to assess creditworthiness and business performance.
Investor or buyer due diligence
Audited financial statements help external parties review the company's financial condition.
Grants, tenders and licences
Some applications may ask for audited accounts regardless of audit exemption eligibility.
Internal discipline
The audit process often highlights bookkeeping gaps, weak controls and missing evidence.
08
How are audit and tax fees usually estimated?
Professional fees are not usually based only on whether a company is profitable. They normally consider the company’s asset size, revenue, expense volume, transaction complexity, accounting standards, timeline and filing scope. The estimator below is intended for directors’ preliminary budgeting only. A formal quotation still depends on document review and confirmed scope.
Enter assets, revenue or expenses.
Audit professional fee estimation
- Professional fee
- -
- Disbursement
- RM500
- SST 8%
- -
- Estimated total
- -
Tax professional fee estimation
- Professional fee
- -
- Disbursement
- RM500
- SST 8%
- -
- Estimated total
- -
Audit + Tax combined reference: -
Send details for quotationHow should directors read this?
The scale is usually based on the highest of total assets, total revenue and total expenses. If the three figures vary significantly, or the company has complex transactions, the final quote may need adjustment.
What may affect audit fees?
Number of assets, number of expense items, nature of business, MFRS / MPERS application, special timeline, consolidated financial statements or group audit instruction reporting.
What may affect tax fees?
Special allowances, tax incentives, industrial building allowance, hire purchase items, number of business sources and the tax schedules required may affect the fee.
This calculator is not a final quotation. The estimate includes disbursement and 8% SST. MBRS / MITRS filing, consolidated financial statements, special timeline, tax incentives or industry complexity may be charged separately. Final fees depend on document review and confirmed scope.
09
Common SME mistakes
Bookkeeping only starts after FYE
This creates delays, missing documents and higher professional fees.
Mixing personal and company expenses
This complicates director balances, tax treatment and audit evidence.
Missing invoices and contracts
Auditors need supporting evidence. Bank payments alone may not be enough.
Confusing Annual Return and financial statements
They are different filings with different timelines under Companies Act 2016.
Assuming audit exemption automatically applies
Eligibility must be assessed and third-party requirements may still require audited accounts.
10
Key takeaway for SME owners
An audited report is not merely an annual formality. It is part of a company's financial reporting and compliance system. For a Sdn. Bhd., owners should understand the financial year end, financial statement preparation, audit requirement, member circulation and SSM lodgement timeline.
Do not wait until the SSM deadline. Maintain bookkeeping monthly, review documents before FYE, confirm whether audit exemption is available early and coordinate the accountant, auditor and company secretary before circulation and lodgement deadlines.
11
Official sources and disclaimer
- Companies Act 2016, Act 777, updated text as at 1 August 2022
- SSM Part M: Annual Returns and Financial Reporting
- VSG Guide: Malaysia Audit Exemption Guide
This guide is for general educational purposes only. It is not audit, accounting, tax or legal advice. Requirements may change and may differ based on your company structure, financial year, audit exemption status, bank requirements, licences and third-party obligations.