Every company in Malaysia is legally required to have a statutory audit of its books of accounts to check if everything is accurate and that there is no tempering to avoid tax or mislead stakeholders. The basic purpose of an audit in Malaysia is entirely the same as in any other country: to provide a fair financial position of a company by evaluating all the pertinent information such as bank balances, bookkeeping records and financial transactions.
In Malaysia, financial reporting framework is determined by the legislation, regulations and promulgations issued by the Malaysian Institute of Accountants in compliance with the International Financial Reporting Standards (IFRS) to make the business environment of Malaysia more transparent and in turn more attractive to investments and to increase the number of company registration in Malaysia.
Why Audit Service is required in Malaysia?
Every private limited company in Malaysia must appoint an approved auditor for auditing its financial reports and giving insight to the board members of the company on an annual basis.There are many things that an auditor does for an organization such as-
- Assess risk- An auditor is required to understand all the business activities of an organization and must assess the risk of misstatements of the financial statements that may be either due to fraud or human error and might influence the economic decisions of users.
- Statutory compliance- He/she should make sure that the books of accounts and financial statements are in compliance with the professional standards and applicable regulatory requirements.
- Assess operating efficiency- Determining the operating efficiency of all components of a business and check if there are certain components that are not significant to the entire business operations with the help of audit evidence.
- Consolidation- Evaluate the precision and completeness of consolidation adjustments and reclassifications along with an evaluation of any possible management bias. An auditor also makes sure that financial information of all components of the business is in accordance with the same statutory policies.
- Communicate with the management- An auditor must communicate all the ethical requirements while preparing books of accounts, financial statements and reports to the management prior to every financial year.
- Documentation- The audited documentations must comprise of a financial analysis of all the components of the business, the extent of in-house staff involvement in the work performed by the auditor and written communications between the in-house staff and the auditor.
The above-mentioned list is a gist of what an auditor will do for your organization if you decide to outsource audit services in Malaysia.
Auditors are usually equipped with all the necessary information related to an industry and there are certain major industries that are set to boost in Malaysia in 2019. Every auditor will help your business with the regular internal auditing and statutory audit as needed according to the industry your organization belongs to. However, an outsourced auditor will go an extra mile for you and also help you with special audit, that is, examine your business objectively, provide insight on key areas and advise the management and other interested parties on how to move forward.
Benefits of Outsourcing Audit Service in Malaysia
The various benefits of outsourcing audit service in Malaysia are-
- Flexibility- Outsourcing audit service gives organizations flexibility in terms of cost and size of the staff.
- Expertise- Independent auditors specialize in certain industries and bring detailed know-how of the industry to take on the mantle of audit functions of an organization.
- Risk reduction- Independent auditors are usually privy to problems faced by auditors in general as well as industry-specific problems. As a result, they are able to provide guidance to reduce risks and potential adverse effects on the organization.
- Objective assessment- An independent auditor is able to provide an objective and unbiased evaluation of the industry to which your organization is a part of. This is because of the very fact that he/she is not an employee of your organization and is given full independence to provide all the necessary criticism to help the organization grow. This also helps you to come up with better ideas and plans to improve the efficiency and effectiveness of your business operations and improve internal controls of your organization.
- Measuring performance- The work of an independent auditor helps an organization to set certain benchmarks to measure the standard and performance of each component of the organization.
If you are dead sure that you are to incorporate a company in Malaysia or already have an enterprise here and want to see your business grow in tandem with this growing economy, then without further adieu outsource audit service to experts. At Business Setup Worldwide, we have experts who have years of experience and in-depth knowledge of various industries. By outsourcing audit service to us, our experts guarantee to add value to the functioning of your organization. Moreover, we also provide company registration service, intellectual property service and company secretarial service in Malaysia. To avail these services you may contact us and we will help you forge a path in the ever-growing business environment of Malaysia.