Understanding Audit Exemption for SMEs in Malaysia: Why, What, and FAQs
Audit exemption is becoming a widely discussed topic among SMEs in Malaysia, especially with the latest updates by the Companies Commission of Malaysia (SSM) through Practice Directive (PD) 10/2024 , effective from 1 January 2025. SME owners need to clearly understand what audit exemption entails, the rationale behind it, and whether opting for exemption genuinely translates into tangible compliance cost savings. Why Audit Exemption—The Rationale The audit exemption framework in Malaysia was originally introduced on 4 August 2017 and recently expanded under the Practice Directive 10/2024 . Its main purpose is clear: To reduce the financial and administrative burdens of compliance, especially for micro and small private entities. To streamline administrative processes, improve efficiency, and enhance Malaysia’s competitive advantage as a business-friendly environment. ...