| Aspect | Audited Financial Report | Unaudited Financial Report |
|---|---|---|
| Prepared by | Company, reviewed and certified by licensed external auditor | Prepared internally by management; no external audit |
| Legal status | Mandatory for companies that do not qualify for audit exemption under Companies Act 2016 | Allowed only for private companies that meet audit exemption criteria under SSM Practice Directive 10/2024 |
| Audit opinion | Yes — auditor provides opinion on fairness and compliance | No audit opinion — statements not independently verified |
| Level of assurance | High — provides confidence to stakeholders (investors, banks, regulators) | Low — only internal verification, limited external use |
| Submission method | MBRS (XBRL format) to SSM within 30 days of circulation | MBRS (XBRL) submission with audit exemption documents |
| Key documents |
Audited FS, auditor’s report, directors’ report, statement by directors, statutory declaration |
Unaudited FS, directors’ report, audit exemption certificate, statutory declaration |
| Purpose | Audited Report | Unaudited Report |
|---|---|---|
| Legal Compliance | Required by law unless exempt | Valid only if company qualifies under SSM exemption rules |
| Assurance for Stakeholders | Provides verified information; builds trust | Limited to internal use or simple ownership structures |
| Bank Loans / Financing | Usually required by banks and investors | Often not accepted for financing |
| Internal Accountability | Enhances governance and accountability | Sufficient for closely held or dormant companies |
| Investment / IPO Readiness | Essential for due diligence, valuation, and compliance | Not suitable for companies preparing for listing or M&A |
| Cost Consideration | Higher cost (audit fees, time) | Lower cost, easier process |
| Tax Submission Support | Supports accurate and defensible tax reporting | Acceptable for small entities if records are proper |
| Avoiding Penalties | Ensures full compliance with Companies Act | Requires careful adherence to exemption criteria |
| Document | Audited | Unaudited (Audit Exempt) |
|---|---|---|
| Financial Statements | ✔ | ✔ |
| Auditor’s Report | ✔ | ✘ |
| Directors’ Report | ✔ | ✔ |
| Statement by Directors | ✔ | ✔ |
| Statutory Declaration (Sumpah) | ✔ | ✔ |
| Audit Exemption Certificate | ✘ | ✔ |
Malaysia