The Companies Commission of Malaysia (SSM) has proposed to review the threshold of the qualifying criteria for audit exemption for certain categories of private companies.
SSM said in a statement that the proposed review would be conducted via a consultation exercise with the publication of the Consultative Document on Proposed Review of Audit Exemption Criteria for Private Companies in Malaysia today.
It said that as a background, the qualifying criteria for audit exemption was introduced on Aug 4, 2017, Practice Directive No. 3/2017 in line with the policies to reduce the regulatory and administrative burdens faced by smaller companies in complying with the Companies Act 2016.
“To ensure that the objectives of the policies remain relevant and beneficial, SSM is proposing that the threshold for the audit exemption qualifying criteria be increased to allow more companies especially the small and medium enterprises to benefit from these policies,” it said.
SSM said that the new qualifying criteria would cover three categories of private companies, namely dormant companies, zero revenue companies and threshold-qualified companies.
It said that dormant companies must be dormant since their incorporation or for the immediate past two financial years to qualify for the audit exemption, whereas zero revenue companies must fulfil the criteria of having no revenue during the current financial year and immediate past two financial years with total assets not exceeding RM500,000 during the same periods.
SSM said that for threshold-qualified companies, the proposed qualifying criteria include having a revenue not exceeding RM1 million during the financial year and immediate two financial years, with total assets not exceeding RM1 million, and having not more than 30 employees during the same periods.
Currently, it said certain categories of private companies may dispense with the audit requirement if they fulfil the existing qualifying criteria.
The consultative document can be accessed through SSM’s portal and its official social media platform.
SSM is inviting comments and accepting enquiries on the document via email to [email protected] before Feb 28, 2023. — BERNAMA