Assurance
Audit & Assurance
We approach each assurance with sharp thoughts, sound commercial advice and optimum solutions.
In addition to verifying that financial results are fairly presented and meet applicable approved accounting standards, we provide observations and insight into the real performance of your business.
It is our integrity, passion, and due diligence approach that make sure we deliver consistent, quality services that will enhance the reliability of financial information to further reinforce the confidence of the organization’s shareholders and stakeholders.
Our Services Includes
- Statutory Audits
- Special Reviews
- Finance Due Diligence
- Due Diligence for Mergers and Acquisitions
- Other Non-Statutory Audits
We strive to improve the internal control within the entity for better management decision making.
Malaysia Audit Fees Schedule and Table
Malaysia Institute of Accountants (MIA) has recommended Practice Guide (RPG) 7 for Audit Fee Charge (New Audit Fee) by Audit Firm for providing statutory auditing services in Malaysia with effect from 1 March 2010.
Reasons for MIA to issue this Practice Guide is:
-
- Increased in compliance burden due to higher auditing standards requirements.
- Increased in operation cost.
- To ensure auditors professionalism are not affected due to “price war” among competitors.
The RPG 7 was removed by the Council from the website in order to uphold the spirit of the Competition Act (CA) 2010 and not breach any of its provisions, yet it will still become part of our associated auditor guideline in establishing their audit fees for performing their Statutory Audit Services in Malaysia.
What Determine Your Audit Fee?
Malaysian Institute of Accountants (MIA) has published Recommended Practice Guides 7 (RPG 7) to all auditors in Year 1994 regarding audit fee calculation. It has been revised several times and subsequently withdraw on 1 June 2015. This recommended practice guide sets out the basis for establishing a reasonable level of remuneration, commensurate with the provision of professional assurance services of an acceptable and recognized standard.
There are two bases for computation of fee:
a) Time-based
Time management is essential in ensuring efficiency in audit performance while time recording is an integral part of the documentary evidence of work performed. Time charge shall be reflective of time spent by the partner and staff in terms of the quality and level of competence required to meet the auditing standards with reference to the size, complexity and technical input expected of the audit assignments. A critical factor in maintaining the viability of a practice depends on good costing. The determination of charge-out rate is costing for audit practice. In the absence of a uniform basis, charge-out rates may differ due to inadequate or over computation of the variable cost factors. MIA Council therefore recommends the basis for time charging as set out below. From past experience, cost computation based on the recommended basis will normally produce a factor of about 3 (three) times the direct labour cost.
b) Value-based
Audit fees shall generally be based upon the degree of responsibility, risk and skill involved and the time necessarily occupied on the work. Past empirical studies carried out by MIA have shown a proportionate correlation between audit fees charged, based on time charge, and the value of total assets or gross turnover or operating expenditure. Therefore, for consistency and harmonisation of the fee levels, MIA Council has issued a guideline in 2010 and recommends that it is appropriate to determine audit fees using the Total Assets or Gross Turnover as shown in the financial statements and multiplying it with the coefficient percentages as shown in the coefficient percentage table. However, the fee may be adjusted to reflect the current inflation of the country, tidiness of the accounting records and complexity of the industries.
The guideline was removed by the Council from the website in order to uphold the spirit of the Competition Act (CA) 2010 and not breach any of its provisions.
(i) Gross Turnover or Total Assets Basis
|
Total Assets or |
Cumulative Ringgit (RM) | Rate (%) |
Fees (RM) |
Cumulative Fees |
|
The first 100,000 |
100,000 | 1.15% | 1,150 |
1,150 |
| The next 150,000 | 250,000 | 0.50% |
756 |
1,906 |
|
The next 250,000 |
500,000 | 0.36% | 900 | 2,805 |
| The next 500,000 | 1,000,000 | 0.22% | 1,081 |
3,886 |
| The next 1,500,000 | 2,500,000 | 0.14% | 2,156 |
6,043 |
| The next 2,500,000 | 5,000,000 | 0.12% | 2,875 |
8,918 |
|
The next 5,000,000 |
10,000,000 | 0.11% | 5,405 |
14,323 |
|
10,000,000 to 20,000,000 |
1,100 for every RM1,000,000 increase of a fraction thereof up to RM20,000,000 | |||
| Above 20,000,000 |
Negotiable (but should not be less than RM20,000 per assignment) |
|||
The choice of Gross Turnover or Total Assets as the basis must be relevant and reflects closely to the time charge. Only where it is not appropriate to use Total Assets or Gross Turnover, we may adopt Total Operating Expenditure basis which must be relevant and reflect closely on time charge.
(ii) Total Operating Expenditure Basis
|
Total Operating Expenditure |
Cumulative Ringgit (RM) |
Rate (%) | Fees (RM) | Cumulative Fees (RM) |
|
The first 50,000 |
50,000 | 2.500% | 1,250 | 1,250 |
|
The next 150,000 |
200,000 |
1.250% | 1,875 | 3,125 |
| The next 800,000 | 1,000,000 | 0.625% | 5,000 |
8,125 |
| The next 1,000,000 | 2,000,000 | 0.250% | 2,500 |
10,625 |
| Above 2,000,000 | 0.125% |
Negotiable |
||
- A statutory audit is a legally required check of the accuracy of the financial statements and records of a company or government. Every entity which is registered under the Companies Act, as a Private Limited or a Public Limited company must get its books of accounts audited every year. This type of audit is not conditional, it depends upon the entity type.
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