Audit Exemption

Companies Commission of Malaysia (SSM) issued a practice directive on 4 August 2017: The company fulfill any one of the criteria stated below will be qualified for audit exemption:
1) Dormant companies
  • Definition of dormant companies: it has been dormant (does not carry on business and there is no accounting transaction occurred) from the time of its incorporation or throughout the current financial year and in the immediate preceding financial year
  • Audit exempt for dormant company incorporated on or after 31 January 2017
  • For the dormant company incorporated on or before 30 January 2017, audit exempt take effect on the financial statement with annual period commencing on or after 1 September 2017
2) Zero-Revenue Companies
  • Definition of zero-revenue companies: It doesn’t have any revenue and its total assets does not exceed RM300,000 for three financial years (current year and immediate past two financial year)
  • Audit exempt for zero-revenue companies’ financial statements with annual periods commencing on or after 1 January 2018.
3) Threshold-Qualified Companies
  • Definition of threshold-qualified companies:
a) it has revenue not exceeding RM100,000 during the current financial year and in the immediate past two (2) financial years
b) its total assets in the current Statement of Financial Position (FS) does not exceed RM300,000 and in the immediate past two (2) financial years; and
c) it has, at the end of its current financial year and in each of its immediate past two (2) financial years end, not more than five (5) employees.
  • Audit exempt for threshold-qualified companies’ financial statements with annual periods commencing on or after 1 July 2018.
This exemption will not be applicable to an exempt private company which has chosen to lodge a certificate relating to its status as an exempt private company to the Registrar pursuant to section 260 of the Companies Act 2016.
SSM Original Practice Directive:
https://www.ssm.com.my/Pages/Legal_Framework/PDF%20Tab%202/pd3_2017-qualifying_criteria_for_audit_eemption_for_certain_categories_of_private_companies_0.pdf