Qualifying Criteria For Audit Exemption Part 1 of 3

01eKTP 40

SSM Practice Directive No. 3/2017 – Qualifying Criteria For Audit Exemption For Certain Categories of Private Companies (Part 1).
 

02Qualifying Criteria for Audit Exemption

According to Section 267(2) of the Companies Act 2016, the Registrar may exempt any private company from having to appoint an auditor if the company fulfil the conditions and criteria as set out in the Practice Directive No. 3/2017.

There are 3 categories of private companies which will be qualified for audit exemption. One of it is if the company is dormant and the criteria are as follows:

• The company has been dormant since incorporation;
• The company has not carry on business and there is no accounting transaction occurred throughout the current financial year and in the immediate preceding financial year.
• "Accounting ecords" means a transaction, accounting and other records that sufficiently explain the transactions and financial position of the company and enable true and fair profit and loss accounts and balance sheets to be prepared.
• Take effect for:
• Financial period commencing on or after 31 January 2017 for companies incorporated on or after 31 January 2017
• Financial period commencing on or after 1 September 2017 for companies incorporated on or before 31 January 2017