Free Tool
PD 10/2024
Audit Exemption Eligibility Checker
Check if your Malaysian Sdn Bhd qualifies for audit exemption under the new Practice Directive 10/2024 framework.
Getting started
Step 1 of 7
1
Let's start with your company details
We need some basic information about your company.
DD / MM / YYYY
About the Audit Exemption Framework
Key information about PD 10/2024 and how it affects your Sdn Bhd
2 of 3
Thresholds must be met
(revenue, assets, employees)
(revenue, assets, employees)
3 years
Current + 2 past financial
years must all qualify
years must all qualify
3 phases
Thresholds increase
progressively 2025 – 2027
progressively 2025 – 2027
New Thresholds (3-Phase Approach)
Companies must meet at least 2 out of 3 for the current and immediate past 2 financial years
| Criteria | Phase 1 FY starting 2025 |
Phase 2 FY starting 2026 |
Phase 3 FY starting 2027+ |
|---|---|---|---|
| Revenue | ≤ RM 1,000,000 | ≤ RM 2,000,000 | ≤ RM 3,000,000 |
| Total Assets | ≤ RM 1,000,000 | ≤ RM 2,000,000 | ≤ RM 3,000,000 |
| Employees | ≤ 10 | ≤ 20 | ≤ 30 |
Who is Excluded?
- Subsidiaries of public companies
- Exempt private companies that lodge an EPC certificate
- Foreign companies
What Must You Still Lodge?
- Unaudited financial statements
- Directors' report
- Certificate of compliance (within 30 days of circulation)
Frequently Asked Questions
What is audit exemption for Malaysian companies?
Audit exemption allows eligible private companies (Sdn Bhd) to opt out of having their financial statements audited by an auditor. This reduces costs while still requiring companies to prepare and lodge unaudited financial statements with SSM.
What are the new thresholds under PD 10/2024?
Thresholds increase over 3 phases: Phase 1 (2025) — Revenue ≤ RM1M, Assets ≤ RM1M, Employees ≤ 10. Phase 2 (2026) — Revenue ≤ RM2M, Assets ≤ RM2M, Employees ≤ 20. Phase 3 (2027+) — Revenue ≤ RM3M, Assets ≤ RM3M, Employees ≤ 30. Companies must meet at least 2 of 3 thresholds.
Which companies are excluded from audit exemption?
Subsidiaries of public companies, exempt private companies that lodge an EPC certificate instead of financial statements, and foreign companies are excluded.
When does PD 10/2024 take effect?
The new criteria apply to financial statements with annual periods commencing on or after 1 January 2025. PD 3/2017 continues to apply for financial statements commencing on or before 31 December 2024.
Do I need to apply for audit exemption?
No, you do not need to apply with SSM. A company is eligible for audit exemption if it satisfies the criteria set in PD 10/2024 and elects to do so. The company can always choose to appoint an auditor if needed.
How do I count my number of employees?
Count the number of full-time employees at the end of each relevant financial year. Full-time means working at least 6 hours/day for at least 20 days/month, or at least 120 hours/month. This includes local, foreign, and contract workers (including those on probation), but excludes directors, shareholders, and unpaid family members who also work in the company.
Does audit exemption affect income tax requirements?
The audit exemption under PD 10/2024 is under the Companies Act 2016. The requirement for audited accounts by LHDNM is under the Income Tax Act 1967. However, LHDNM has announced that if a company is not required to submit audited accounts to SSM, then subsection 77A(4) of the ITA would not apply.
Need help with your company's compliance?
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