Starting 1 January 2025, the Companies Commission of Malaysia (SSM) has rolled out new audit exemption rules under Practice Directive No. 10/2024 (PD 10/2024). These rules are designed to ease the compliance burden on smaller private companies while still ensuring proper financial reporting.
Here’s what business owners need to know:
Who Qualifies?
A private company can skip its annual audit if it meets at least two out of three conditions, assessed for the current year and the two years before:
- Annual revenue is RM3 million or less
- Total assets are RM3 million or less
- Number of employees is 30 or fewer
Phased Implementation (2025–2027)
The thresholds won’t jump to the maximum immediately. Instead, they’ll be rolled out in phases:
- 2025 → RM1m revenue, RM1m assets, 10 employees
- 2026 → RM2m revenue, RM2m assets, 20 employees
- 2027 onwards → RM3m revenue, RM3m assets, 30 employees
Dormant Companies
Companies that are dormant—meaning no accounting transactions during the current and previous year (other than mandatory filings)—remain exempt from audit.
Who Cannot Apply?
The exemption does not apply to:
- Public companies (including listed ones)
- Subsidiaries of public companies
- Foreign companies
- Exempt private companies lodging a certificate under Section 260 of the Companies Act 2016
When an Audit Is Still Required ?
Even if your company qualifies, an audit will still be mandatory if:
- Shareholders holding at least 5% of shares or voting rights request it,
- At least 5% of members eligible to vote request it, or
- The Registrar directs it.
Filing Responsibilities Remain
Audit exemption doesn’t mean paperwork exemption. Companies must still:
- Prepare unaudited financial statements in line with accounting standards
- Circulate them to shareholders
- File them with SSM within 30 days, along with directors’ reports, declarations, and a signed director’s certificate confirming eligibility