Yes. If your private company qualifies for audit exemption, it still needs proper accounting records and financial statements. The exemption removes the audit requirement for the qualifying period; it doesn’t remove the accounts themselves.
That distinction matters because “no audit” can sound like “no year-end work.” In practice, the company still needs complete figures, compliant statements, approvals and the required lodgement documents.
Bookkeeping, accounts and audit are different steps
Bookkeeping records the company’s transactions and reconciles its balances. Year-end accounting turns those records into financial statements and supporting schedules. An audit is an independent examination performed under the applicable requirements.
Audit exemption changes the third step. It doesn’t make the first two disappear.
SSM Practice Directive 10/2024, particularly paragraphs 15–19, requires qualifying companies using the exemption to prepare and lodge compliant unaudited financial statements and accompanying documents, including the required certificate. SSM’s May 2026 FAQ reinforces the continuing obligations.
What changes, and what remains?
| Part of the annual process | Effect of audit exemption |
|---|---|
| Maintain accounting records | Still required |
| Reconcile bank, customer, supplier and other balances | Still needed for reliable accounts |
| Make appropriate year-end adjustments | Still needed |
| Prepare financial statements | Still required |
| Obtain directors’ approval and complete accompanying documents | Still required as applicable |
| Conduct the statutory audit | Removed for a company and period that validly qualify |
| Circulate and lodge the financial statements | Still required, subject to the applicable process and timing |
| Complete tax return and MITRS work | Separate obligations; audit exemption doesn’t remove them |
The company must first qualify. Being small, having low revenue or having qualified in an earlier year doesn’t settle the current period automatically. Eligibility is covered separately in Malaysia’s 2026 Audit Exemption Thresholds.
What accounting work still needs to be done?
Before the unaudited statements can be prepared, the company will usually need to:
- complete the bookkeeping for the whole financial period;
- reconcile bank accounts and other important balances;
- confirm customer and supplier amounts;
- review stock, assets, loans and director transactions;
- record suitable year-end adjustments;
- investigate old or unusual balances;
- prepare the financial statements and notes; and
- assemble the approval and lodgement documents.
The word “unaudited” describes the assurance status of the statements. It doesn’t mean the figures may be incomplete or prepared without care.
Fictional case study: exemption changes one part of year end
Assume a Sdn Bhd qualifies for audit exemption for its year ended 31 December 2025, elects to use it and has no separate requirement for audited statements. No deadline extension applies.
The directors initially expect the accountant to “skip year end.” Instead, the team agrees this fictional sequence:
| Step | Responsible party in this engagement | Completed output |
|---|---|---|
| Close the records by 15 May 2026 | Accountant, with documents from the company | Reconciled balances, adjustments and draft financial statements |
| Approve the final pack | Board, supported by the appointed providers | Approved statements and required accompanying documents, including the exemption certificate |
| Circulate on 20 May 2026 | Company, with secretary coordinating | Copies sent to the required recipients and circulation evidence retained |
| Lodge by 19 June 2026 | Authorised lodger, coordinated by the secretary | SSM lodgement and acknowledgement |
The dates illustrate the general rules explained below. Circulating on 20 May starts the 30-day lodgement period; the company cannot simply wait until 30 days after the six-month circulation deadline.
The company finishes with a complete unaudited filing pack. The audit engagement is the step it avoids; preparation, approval and filing still have named owners. Delegating the work does not remove the directors’ responsibilities. Tax and supporting-document submissions remain on a separate schedule.
Who is responsible for what?
The exact division depends on the company’s appointments and engagement letters, but this framework helps expose gaps:
| Person or provider | Matters to clarify |
|---|---|
| Directors | Oversight, approval, records supplied and the decision to use the exemption |
| Bookkeeper/accountant | Bookkeeping, reconciliations, adjustments and statement preparation included in scope |
| Company secretary | Circulation/lodgement coordination and required documents within the actual appointment |
| Tax adviser | Tax computation, return and supporting-document work within the engagement |
Don’t assume the accountant will lodge SSM documents, the company secretary will prepare the accounts or the tax adviser will correct bookkeeping. Ask each party to confirm the work in writing.
Timing still matters
For private companies, sections 258–259 of the Companies Act 2016, SSM’s 2022 reprint generally require circulation within six months of financial year end and lodgement within 30 days after circulation. SSM’s current audit-exemption FAQ, question 15, confirms that unaudited statements still follow the circulation and lodgement process.
The Companies (Amendment) Act 2024, section 6 added the Registrar’s power to extend a private company’s circulation period on an application made before that period expires. Lodgement extensions have their own provision under section 259(2). An application is not itself an approved extension: record the actual decision and revised dates where applicable.
Why reliable accounts still matter
Financial statements are more than a filing exercise. They help directors understand profit, cash, debt, assets and amounts owed by customers or to suppliers. Banks, investors, landlords or other parties may also request financial information—and an external party may still require audited statements even where SSM exemption is available.
Tax work remains separate as well. The MITRS guide for companies and LLPs explains the supporting documents submitted through the Malaysian Income Tax Reporting System after the tax return. Audit exemption can affect which financial statements are submitted, but it doesn’t remove that process.
The practical next step
First, assess whether the company and financial period qualify for exemption. Then map the annual work that remains: close the books, prepare the statements, obtain the required approvals and coordinate lodgement and tax submissions.
Audit exemption can remove one significant requirement. It doesn’t turn a company into a business that no longer needs accounts.
Sources checked on 24 September 2026 against SSM’s Act reprint, the relevant 2024 amendment, Practice Directive 10/2024 and current FAQs. The worked dates assume an eligible private company with no extension or separate audit requirement.
Sources referred to in this guide (4)
We’ve taken reasonable steps to verify the cited sources and check this information as at the source-check date. We can’t guarantee 100% accuracy, completeness or that it remains up to date. This is general information and does not replace professional accounting, tax or legal advice tailored to your circumstances. How these guides were prepared.