Audit-Exempt Companies: What It Means (and What It Doesn’t)

Audit-Exempt Companies: What It Means (and What It Doesn’t)

Every year, many directors ask us:

“My company is audit-exempt right? So I no need do accounts lah?”

It sounds convenient — no audit, less hassle.
But that sentence hides one of the biggest misunderstandings we see.

Let’s clear it up once and for all 👇

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⚖️ 1. Audit-Exempt ≠ Account-Exempt

When a company is audit-exempt, it simply means you don’t need a statutory audit by a licensed auditor.
But you still need to prepare financial statements that show your company’s performance and position.

Those accounts must still follow approved accounting standards (like MPERS).
The difference is only that no auditor signs them off.

You still need accounts — just without the audit stamp.

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💡 2. Who Qualifies for Audit Exemption

Under SSM’s Practice Directive 3/2017, these private companies may apply for audit exemption if they meet certain criteria:

1️⃣ Dormant Companies – no business activity or accounting transactions.
2️⃣ Zero-Revenue Companies – revenue ≤ RM100,000, total assets ≤ RM300,000, ≤ 5 employees.
3️⃣ Small Companies – revenue ≤ RM1 million, assets ≤ RM1 million, ≤ 30 employees.

You must meet the criteria for two consecutive financial years, and your board must approve the exemption formally.

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🧾 3. You Still Need to File to SSM

Even with exemption, you must still:

• File your Annual Return every year.
• Submit Unaudited Financial Statements in XBRL format (via MBRS).
• Keep supporting documents for LHDN or SSM if they request verification.

If you skip this, you’re still considered non-compliant.

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🧮 4. Why Proper Accounts Still Matter

We’ve seen companies skip accounts for years thinking “audit-exempt means no need.”
Later, when they apply for loans, grants, or investors — they can’t show proper records.
Banks and investors usually ask for at least two years of financial statements, audited or not.

So even if you qualify for exemption, keep your books clean and updated.

Audit exemption saves cost — not responsibility.

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❤️ 5. The Safer Way: Verify Before You Assume

Before deciding to skip an audit, check properly.
At Trust Maven®, we don’t act unless you engage us officially — but we do offer a free audit-exemption screening.
We’ll review your numbers, employee count, and documents to see if you truly qualify.

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💬 Final Thoughts

Audit-exemption is a privilege, not a loophole.
It’s meant to reduce burden for small companies — not remove compliance entirely.

So if you’re planning to claim exemption, do it confidently, but do it right.
Because when the authorities come asking, “Where are your accounts?” — you’ll have the answer ready.
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“Exemption from audit doesn’t mean exemption from responsibility.”

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💌 Not sure if your company qualifies for audit exemption?
Message Trust Maven® for a free audit-exemption screening — no commitment, just clarity.