What is the Audit Oversight Board (AOB) and does it affect my Sdn Bhd?
The AOB is a body under the Securities Commission that registers, inspects and disciplines auditors of public-interest entities such as listed companies. A typical private Sdn Bhd is not an AOB-regulated audit, though its auditor may also be on the AOB register.
What it is. The Audit Oversight Board (AOB) sits within the Securities Commission Malaysia (SC). Its members are appointed by the SC and its stated aim is to promote high-quality independent audits and confidence in audited accounts.
Whose auditors it oversees. The SC's annual report says the AOB oversees auditors of public-interest entities (PIEs) and schedule funds. Listed companies are the clear example.
What it does
- registers and recognises audit firms and individual auditors, including foreign ones;
- inspects audit firms, partners and engagements;
- takes enforcement action such as suspensions, prohibitions and monetary penalties; and
- issues handbooks on registration and recognition (revised June 2024, including a public-interest test and alignment with international quality management standards).
What it does not do. It does not approve company auditors under section 263; that is the Finance Minister's role via the Accountant General's Department. It also does not run the audit exemption (SSM does).
For a private Sdn Bhd
- Your statutory auditor needs a section 263 approval.
- AOB registration is not a requirement for auditing a normal private company, but some firms hold it because they also audit PIEs.
Takeaway. The AOB matters if your company is a PIE or group member of one; otherwise it is background.
Legal basis
- Securities Commission Malaysia Act 1993 (AOB framework)
- Companies Act 2016, s.263
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- Does every Sdn Bhd in Malaysia need to be audited?Not every one, but audit is the default. Section 267(1) of the Companies Act 2016 requires a private company to appoint an auditor for each financial year, unless it qualifies for and elects the audit exemption set by SSM's Practice Directive 10/2024.
- What is audit exemption for private companies in Malaysia?Audit exemption lets an eligible private company choose not to appoint an auditor for a financial year. It rests on section 267(2) of the Companies Act 2016 and SSM Practice Directive 10/2024. The company still prepares and lodges unaudited financial statements.
- What are the audit exemption thresholds for a Sdn Bhd in 2026?For financial periods starting 1 January to 31 December 2026 (Phase 2), a private company must meet at least two of three tests: revenue up to RM2,000,000, total assets up to RM2,000,000, and no more than 20 employees. Each test covers the current and past two years.
- How do the 2025 to 2027 phases for audit exemption work?Practice Directive 10/2024 raises the audit exemption limits in three steps, based on when the financial period starts: 2025, 2026, and 2027 onwards. The final limits are RM3,000,000 revenue, RM3,000,000 total assets and 30 employees, reached for periods starting from 1 January 2027.
- How do I check if my Sdn Bhd qualifies for audit exemption?Pass at least two of three tests (revenue, total assets, employees) for the current financial year and the past two, using the limits for the phase your period falls in. Also confirm you are not an excluded company type, such as a subsidiary of a public company.