MLY COM proposed to review the threshold of the qualifying criteria for audit exemption for certain categories of private companies, via a consultation exercise.
New Qualifying Criteria
MLY COM is proposing that the threshold for the audit exemption qualifying criteria be increased to allow more companies, especially the SMEs, to benefit from these policies.
Certain categories of private companies may dispense with the audit requirement if the company has been dormant since its incorporation or for the past two financial years.
In addition, zero revenue companies with no revenue in current financial year and immediate two financial years with total assets not greater than MYR 500k.
Threshold qualified companies with revenue not above MYR 1mn and immediate two financial years; total assets not exceeding MYR 1mn and no more than 30 employees.
Consultation End
Comments on the consultation should be submitted by Feb. 28, 2023.
Feb. 2024 Second Consultation
On Feb. 7, 2024, MLY COM consolidated the feedback and revised the proposal.
Revise the qualifying criteria, based on turnover, assets, and employee thresholds.
Increase the criterion threshold; revise the qualifying criteria to any 2 of the 3 criteria.
Not applicable to a private company that is a subsidiary of a public company.
An exempt private company (referred to as an EPC) that fulfils the criteria but opts not to lodge the financial statement with MLY COM must continue to undergo an audit.
Second Consultation is open for opinions which shall be submitted by Mar. 8, 2024.
Document dated Feb. 7, 2024, received from MLY COM Feb. 19, summarized Feb. 20.
Dec. 2024 Revised Exemption Criteria
On Dec. 18, 2024, MLY COM issued new criteria in Practice directive no. 10/2024: qualifying criteria for audit exemption for certain private companies in Malaysia, aiming to enhance audit quality while reducing compliance burden for companies.
Firms must meet any two of three criteria for audit exemption: annual revenue not exceeding MYR 3mn, total assets not exceeding MYR 3mn, employee count under 30.
Criteria applies to current and previous two financial years; dormant companies are eligible if they have been dormant since incorporation or current plus previous year.
Phased implementation wherein in phase 1 (Jan. 2025 - Dec. 2025), thresholds at MYR 1mn and 10 employees; phase 2 (Jan. 2026 - Dec. 2026), thresholds at MYR 2mn and 20 employees; phase 3 (from Jan. 2027), full thresholds at MYR 3mn, 30 employees.
New criteria is effective for financial years starting on/from Jan. 1, 2025.
Regulators
MLY COM
Entity Types
Auditor; Corp
Reference
PR 12/18/2024; CP, PR, 2/7/2024; CP, PR, 2/2/2023
Functions
Accounting; Actuarial and Valuation; Compliance; Financial; Legal; Registration/Licensing; Reporting; Risk
