When do banks, tenders or grants require audited accounts even if my company is exempt?
Company law may excuse an audit, but lenders, tender bodies, grant providers and investors set their own conditions and often ask for audited accounts. SSM itself notes exempt companies may still need audits for financing or contractual obligations.
Two different sources of "must".
- Law: the Companies Act and SSM's Practice Directive decide whether your company must appoint an auditor.
- Contract or policy: banks, government tenders, grant schemes, landlords, franchisors and investors decide what accounts they will accept.
SSM's own announcement acknowledges this, saying auditors can focus on companies that need audited accounts for financing or contractual obligations, and that exempt companies keep lodging unaudited accounts.
Common situations
- Bank facilities. Loan and overdraft offers often say annual audited accounts must be provided. Check the facility letter.
- Tenders and vendor registration. Procurement rules may specify audited accounts for some value thresholds.
- Grants and incentives. Programme terms may require audited accounts.
- Investors and acquirers. Due diligence usually expects audited history.
- Foreign parent or group. Consolidation may need an audit.
- Tax. See the LHDN question; tax is governed separately.
Steps for owners
- Read the conditions of every facility, contract and licence.
- Ask counterparties in writing what they accept.
- If a document requires audit, the exemption decision may effectively be to audit.
- Remember exemption is tested every year; a past lender may ask for audited figures for every year in a facility's life.
Each lender, agency or programme sets its own requirements, so confirm them directly with each one.
Legal basis
- SSM Practice Directive 10/2024
Sources
Applies to Financial periods commencing on or after 1 January 2025 (thresholds phased 2025-2027) · 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
- How does a qualified or adverse audit opinion affect bank loans and tax?No law bans lodging a modified opinion, but lenders, tenderers and investors usually treat it as a warning and may ask questions, add conditions or decline. Tax is mostly separate: LHDN works from your financial statements and tax computation, not the opinion type.
- What is the difference between an audit, a review and a compilation of accounts?An audit gives the highest level (reasonable) assurance and is the only one that meets the statutory audit requirement. A review gives limited assurance, and a compilation gives none, because the accountant only assembles the figures. Only a valid audit or a valid audit exemption satisfies the Companies Act.
- 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.