In August 2017, Suruhanjaya Syarikat Malaysia (SSM) issued Practice Directive 3/2017 “Qualifying Criteria for Audit Exemption for Certain Categories of Private Companies” and invoked subsection 267(2) of the Companies Act (CA) 2016 to exempt certain private companies from having to appoint an auditor according to the criteria and conditions as set out in the Practice Directive (PD).
For the purpose of the PD, the following categories of private companies will be eligible for audit exemption:
Notwithstanding the issuance of the PD, the Council has decided that the Institute will adopt a two-pronged approach comprising initiatives to enhance the services offered by SMPs and the advocacy of the value of audit. The desired outcome in fostering the development of the SMPs is to transform the current SMP landscape to one that is progressive, and able to move up the value chain of professional services to better serve the needs of businesses.
The Institute will also continue to engage with various stakeholders to promote the benefits of voluntary audit, even for SMEs exempted from audit. The Institute believes that the audit brings more value than the reduction in cost of an audit and the limited liability privilege should come with accountability and an independent check.
Moving forward, the Institute will continue to engage with SSM in providing our feedback on the impact of audit exemption and on matters affecting the accountancy profession.
Engagement with Stakeholders on Value of Audit
One of the MIA’s Initiatives in promoting the value of audit and also the MIA’s stance in respect of the Draft Practice Directive (Audit Exemption) 2017 is to engage with the stakeholders in order to advocate the importance of audit and also to solicit view pertaining to the proposed audit exemption.
MIA has engaged with the following stakeholders:
||The Malaysian Institute of Chartered Secretaries and Administrators (MAICSA)
||Malaysian Association of Company Secretaries (MACS)
||Malaysia Debt Ventures Berhad (MDVB)
||SME Association of Malaysia
||Association of Banks in Malaysia (ABM)
||Malaysia Venture Capital Management Berhad (MAVCAP)
||The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM)
||Association of Islamic Banking Institutions Malaysia (AIBIM)
||Khazanah Nasional Berhad
Publications of “Why Audit Matters for SMEs”
The booklet Why Audit Matters for SMEs was published in December 2016 and was created especially for owners and managers of Small and Medium Enterprises (SMEs) to illustrate the value of an external audit.
Click HERE to view or download the publication which is available in English, Malay and Mandarin.