In Malaysia, every Companies incorporated under the Companies Act 1965 are required to conduct audit every year and submit their audit report to Companies Commission of Malaysia (CCM). It is to enhance the reliability and creditablity of the financial report prepared by the company directors, in which various stakeholders used it as a source for reference.
In additions, audit will also help in detecting the company internal control weaknesses, if such weaknesses come to our notice during the course of our audit, which we think should be brought to the Board of Directors or Audit Committee (listed company) attention, we will report and suggest recommendations to them.
Auditors’ reports have been widely used as a reference to apply bank loans facilities, license (e.g. Licensed manufacturing warehouse) renewal and project tendering as it is certified by an independent third party. The reliability is more than management accounts as it might has certain manipulation in general or errors due to incompetent account executives.