Duties of Auditors in Malaysia

Updated: 15 July 2025

Under the Companies Act Malaysia, companies that are doing business in Malaysia and registered under the Companies Commissioner of Malaysia are required to appoint an approved auditor to audit the accounts of the company.

In another words, all public listed companies, private limited companies and branch offices in Malaysia are required to appoint an approved auditor to audit the accounts. The directors are required to present an audited set of accounts at the annual general meeting once in every calendar year.

Who is an approved auditor?

An approved auditor is a person approved as an auditor by the Minister of Finance. Normally the appointment of auditors is in the name of the firm. The directors of the company must ensure that the proposed auditor that they are appointing is an approved auditor.

What are the duties of auditors? 

The Companies Act 2016, particularly Section 266, outlines the statutory duties of auditors in Malaysia. Key responsibilities include:

1. Reporting to Members: Auditors must report to the company's members on the financial statements and related accounting records.
2. Forming an Opinion: Auditors are required to form an opinion on whether:
   • They have obtained all necessary information and explanations.
   • Proper accounting records have been kept.
   • The company's financial statements give a true and fair view and comply with approved accounting standards.
3. Access to Records: Auditors have the right to access the company's accounting and other records at all reasonable times.
4. Reporting Irregularities: If auditors identify breaches of the Companies Act or suspect fraud or dishonesty, they are obligated to report these matters in writing to the Registrar.

Who are the auditors to report to?

The duties of the auditors are to report to the members (shareholders) of a company.

Are auditors responsible for the preparation and fair presentation of financial statements of a company?

No. The responsibility of preparation and fair presentation of financial statements of a company lies with directors of a company. Auditors are responsible to express an opinion on the financial statements.

What is the process of appointing an auditor?

If your company is newly incorporated, the directors of a company must at any time before the first AGM appoint the first auditors. Shareholders may appoint the first auditors at a general meeting if directors fail to make the appointment.

The proposed auditor must give consent to act as auditor before the appointment.

The Company Secretary of your company is normally able to assist and advise you with the process of appointing an auditor.

What is the term of office of an auditor?

The term of office of an auditor is until the conclusion of the next AGM. The Company must at every AGM appoint or reappoint an auditor until the conclusion of the next AGM.

How can we appoint another auditor if our company's existing auditor resigns?

An auditor can resign at a general meeting of the company. Normally the auditor gives notice in writing to the directors that he desires to resign. The directors of the company must call for a general meeting for the purpose of appointing an auditor in place of the resigning auditor. The resignation of the existing auditor is only effective on the appointment of another auditor. Notice of nomination of new auditor must be sent out to the auditor and all persons entitled to receive notice at the prescribed number of days before the AGM.

The company secretary of your company would normally be able to assist you in the process of appointing an auditor.

Do the auditors have the rights to access the company records?

Your appointed company auditor has the right of access at all reasonable times to the accounting records or books, vouchers and other records such as agreements or registers of the company.

What are the other rights of the auditors?

Your appointed company auditor has the right to require information from any officer of the company as he desires for the purpose of carrying out his duty.

Your auditor is entitled to attend any annual general meeting and to speak on any part of the business of the meeting that concerns him as his capacity as auditor.

If your company is a holding company, your auditor has the right to require any officer or auditor of the subsidiary to provide information and explanation to him for the purpose of reporting on the consolidated accounts.

Your auditor has the right to receive any notices or communication relating to any general meeting which a member is entitled to receive.

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