The Companies Commission of Malaysia (CCM) has released a directive setting out the category and criteria for audit exemption. The practice directive entitled Qualifying Criteria for Audit Exemption for Certain Categories of Private Companies revealed that dormant companies, zero revenue companies and threshold qualified companies would be eligible for audit exemption. The threshold qualifications are; not exceeding RM100,000, having assets not exceeding RM300,000 and having no more than 5 employees.
This applies to companies incorporated on or after 31 January 2017, for zero revenue companies it will apply for the annual financial period commencing on or after 1 January 2018 and for threshold qualified companies on or after 1 July 2018. The exemption from audit will be effective from 1 January 2018.
However, the company exempted from audit must submit the unaudited financial statement that complies with the approved accounting standards and the Malaysian Accounting Standard Board (MASB). The unaudited financial statement must also be circulated to the board members in accordance with the Companies Act 2016.
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