MIA booklet on why audit matters for SMEs

PETALING JAYA: The Malaysian Institute of Accountants (MIA) yesterday launched a booklet, Why Audit Matters to SMEs, in a move to educate owners and managers of small and medium enterprises on the importance of the process, amid a discourse on audit exemption for dormant and small private companies.
The booklet is a quick guide on the value of an audit to various stakeholders and emphasises the benefits derived from the decision to have accounts audited.
The main message the booklet conveys is that the cost of audit to an entity should not be considered in isolation of the benefits to be derived by that entity.
MIA believes that a comprehensive analysis needs to be carried out and appropriate dialogues conducted with all relevant stakeholders, given the far-reaching consequences of audit exemption across the regulatory and financial reporting ecosystem.
Currently, all companies enjoying the privilege of limited liability must subject their businesses to mandatory audits to safeguard the interest of third party users and other stakeholders.
Among others, audit brings financial discipline, which is especially important as under the Companies Act 2016, increased liabilities will be imposed on company directors for failing to prepare adequate financial statements. The penalty under the new Act is a fine not exceeding RM500,000 or a jail term of not more three years, or both.
The booklet will be distributed to SMEs and the relevant stakeholders during MIA’s engagement sessions in early 2017.