KUALA LUMPUR: The Association of Chartered Certified Accountants (ACCA) has called for a phased approach to a proposed increase in the audit exemption threshold.
This increase would remove the requirement for companies with annual revenues of less than RM3 million to be independently audited, it said in a statement.
ACCA said it agrees with the Companies Commission of Malaysia's (SSM) view that it is crucial to strike a balance between providing cost relief to smaller businesses and ensuring adequate oversight of financial reporting.
It said this suggests a phased approach to the increase to RM3 million from the current level of RM100,000 over five years, starting with thresholds of RM500,000.
According to ACCA head of Maritime Southeast Asia Portfolio Andrew Lim, a phased approach will allow stakeholders more time and space to adjust to and respond to shifting market forces.
He also warned about incorrect perceptions about the value of audits.
"We are concerned that the conduct of independent audits has been conflated with administrative burdens.
"The SSM and other regulators need to highlight the importance and benefits of audits to both companies themselves and those that they deal with, such as banks, tax authorities, or major creditors," Lim noted.
He added that he is also concerned that an abrupt and significant increase in audit exemption thresholds might diminish the attractiveness of the accounting profession, especially for young talent.
Additionally, ACCA also highlighted the short timeline for the consultation, which it says has reduced its time to consult with members and other stakeholders.
It hopes that SSM will extend the consultation period and engage with everyone who is affected by the proposed changes so that they have a chance to share their views.