KUALA LUMPUR: Federation of Malaysian Business Associations (FMBA) today said the Companies Commission of Malaysia's (SSM) proposal to raise the threshold of companies allowed audit exemptions, will help to alleviate business operational costs for small and medium enterprises (SMEs).
FBMA is a coalition of 200 of business and commerce chambers and/or associations representing more than 500,000 members from across the country.
SSM proposes to repeal the existing criteria based on the categorisation of dormant companies, zero-revenue companies, and threshold-qualified companies.
Instead, the qualifying criteria will be based on turnover, assets, and employee thresholds. This approach aims to provide a more comprehensive and efficient means of determining eligibility for audit exemptions.
SSM proposes to exempt companies that have annual income and/or total assets of not more than RM3 million in the current statement of financial position and in the immediate past two financial years and/or that the number of employees at the end of the current financial year and in the immediate past two financial years does not exceed thirty.
Its chairman Datuk Abdul Malik Abdullah said SSM's proposed revisions aim to streamline and enhance the efficiency of audit exemption criteria.
"We applaud SSM's initiative in proposing these revisions, which reflect a proactive approach towards supporting Malaysian businesses, particularly SMEs. "These changes will undoubtedly contribute to enhancing the competitiveness and sustainability of our business landscape," he said in a statement.
Abdul Malik added that by aligning the audit exemption criteria with turnover, assets, and employee thresholds, businesses can benefit from reduced regulatory requirements while maintaining accountability and transparency. "FMBA will remain committed towards advocating for policies and initiatives that foster the growth and prosperity of the Malaysian business community," he noted.
SSM closed a consultative document proposing updated audit exemption criteria for private companies that meet at least two of the three criteria on Mar 8, 2024.
Companies are still obligated to prepare financial statements for taxation and financial planning purposes.
The proposed criteria does not apply to a private company that is a subsidiary of a public company.