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Audit FAQ

question What is an external audit?
   
answer External audit is a periodic or specific purpose audit conducted by external (independent) qualified accountant. Its objective is to determine, among other things, whether
  (a) the accounting records are accurate and complete
  (b) prepared in accordance with the provisions of Generally Accepted Accounting Principles (GAAP)
  (c) the statements prepared from the accounts present fairly the organization's financial position, and the results of its financial operations
   
   
question What are our responsibilities as external auditors?  
   
answer Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
   
   
question Who receives the external audit report?
   
answer Our report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act 1965 in Malaysia.
   
   
question What is the difference between External Audit and Internal Audit?
   
answer External auditors represent third-party users and most often perform financial audits; internal auditors are employees of the organization, they assist management and, for the most part, perform operational audits.
   
   
question When should the company perform its audit?
   
answer Audit report will be presented in AGM (Annual General Meeting) normally and submitted to Companies Commission of Malaysia together with the company annual return. Thus a company (Sdn. Bhd. Or Bhd) financial statement should be audited every year.
   
   
question How much does an external audit cost normally?
   
answer External audit fees are based upon the degrees of responsibility and skill involved and the time necessarily occupied on the work. There are no standard fees on audit fees, but you can estimate your audit fee based on Recommended Practice Guide 7 (Withdrawn with effect from 1 June 2015) issued by Malaysian Institute of Accountant. 
   
   
question Why the company need audit service?
   
answer 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. 
   
   
question How do a company appoint its first auditors?
   
answer At any time before the first annual general meeting of a company, the directors of the company may appoint, or (if the directors do not make an appointment) the company at a general meeting may appoint, a person to be the auditor of the company, and any auditor so appointed shall hold office until the conclusion of the first annual general meeting.
 
 

L & Co Plt.

18A & 20, Jalan Sasa 2, Taman Gaya,
81800 Ulu Tiram, Johor, Malaysia.
Tel +607-859 0410
Fax +607-863 1003
Email liew@liew.my
 
     

What Our Client Say

     
L & Co always carry their services in professional way – well planning, in time, precise, friendly and professional. While we are stuck with problems, they can always advice us with industrial best practices and their views.
 
YM Tan
ICT Automation (M) Sdn Bhd
www.ict.com.my
 
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