Auditors In Malaysia

Under the Malaysian Companies Act 1965 it is required that annual audit is mandatory for every private limited company doing business in Malaysia, regardless of the size of the company. Businesses register under sole proprietor or partnership doing business in Malaysia is not required to have its financial statements audited annually.

All limited company must appoint an Auditor for the company within three (3) months after incorporation. The first Auditor appointment is the responsibilities of the Directors and they hold office until the first general meeting at which the company audited accounts are considered. If the directors have not appointed an auditor, the shareholders may appoint the auditors at a general meeting.

An approved auditor in Malaysia is a person of good character, competent to perform his duties as a company auditor and who has been granted approval to act as an auditor by the Ministry of Finance. To be an approved company auditor in Malaysia, the applicant is required to be a member of Malaysian Institute of Accountants (MIA), obtained recognized professional qualification and has relevant practical experience.

Auditors in Malaysia are to examine the accounting information in order to obtain audit evidence about the amounts and disclosures in the financial statements. The financial statements are required to be prepared in accordance with the Private Entity Reporting Standards for private limited companies and the Companies Act 1965. Therefore, an auditor must be independent as one of the objectives of an audit is to provide objective and independent report on the reliability of information.

How to obtain an Audit Licence?

The new eligibility criteria to become an approved company auditors by the Ministry of Finance with effect from 1 January 2013:

  1. Is a member of the Malaysian Institute of Accountants (MIA) under the Chartered Accountant category. In addition, the applicant has to be a member of the MIA for at least one (1) year.
  2. Possess a valid Practising Certificate issued by MIA.
  3. Possess sufficient working experience in audit practice in a public accounting firm:
    • The candidate must have at least 5 years of working experience prior to application. The 5 years accumulative working experience can be obtained prior to and/or after becoming a Chartered Accountant of the MIA.
      • At least 3 years must be in audit work.
      • At least 1 year out of the above 3 years shall be in an audit supervisory role. The audit supervisory role is defined as being responsible for audit management including consultation with audit partners and has experience in giving opinions for financial statements and be directly involved in audit planning.
    • Candidates who have left audit practice, but still within a 3 year period prior to the application to be approved company auditors, are still eligible to apply.
    • For candidates who have left audit practice for more than 3 years, they must work for at least 1 year in audit in the Malaysian environment.
  4. Candidates are required to attend the “Public Practice Programme” organised by the MIA