Unaudited vs Audited Financial Statements Malaysia: Key Differences Explained
Learn the difference between audited and unaudited financial statements in Malaysia, when you need each, and why professional preparation still matters.
TECHNICAL UPDATES
4/14/20262 min read
Unaudited vs Audited Financial Statements: What Malaysian Companies Need to Know
With the rise of audit exemption in Malaysia, many business owners are asking:
👉 Do I still need audited financial statements?
👉 Are unaudited accounts sufficient?
Understanding the difference between audited and unaudited financial statements is crucial — not just for compliance, but also for your company’s credibility and decision-making.
If you’re unfamiliar with how audit exemption works, you may want to first read our detailed guide on Audit Exemption in Malaysia, which explains the eligibility criteria and thresholds.
What Are Audited Financial Statements?
Audited financial statements are financial reports that have been independently examined by a licensed auditor.
The auditor provides an opinion on whether the financial statements:
Are prepared in accordance with applicable standards (MPERS or MFRS)
Give a true and fair view of the company’s financial position
In Malaysia, audits are governed under the Companies Act 2016 and regulated by the Companies Commission of Malaysia.
What Are Unaudited Financial Statements?
Unaudited financial statements are prepared without an independent audit.
They are typically compiled by:
Management, or
A professional accountant
Even without an audit, these financial statements must still:
Comply with MPERS or MFRS
Be properly structured and documented
Reflect accurate financial information
👉 If your company qualifies under audit exemption, unaudited financial statements may be sufficient. Learn more in our Audit Exemption Malaysia guide.
When Do You Need Audited Financial Statements in Malaysia?
Not all companies can skip audits.
You are required to have audited financial statements if:
Your company does not qualify for audit exemption, or
It is required by shareholders, investors, or regulators
Even if you qualify for exemption, some situations still require audited accounts:
Bank loan applications
Investor due diligence
Group reporting requirements
👉 Refer to our Audit Exemption Malaysia article to check if your company qualifies.
When Are Unaudited Financial Statements Sufficient?
Unaudited financial statements are generally sufficient if:
Your company qualifies for audit exemption
There are no external requirements for audit
Internal stakeholders are comfortable with the level of assurance
👉 However, “sufficient” does not mean “less important.”
The Common Misconception
Many SMEs assume:
“If there is no audit, the accounts don’t need to be as detailed or accurate.”
⚠️This is incorrect.⚠️
Even without an audit, companies must still:
Maintain proper accounting records
Prepare financial statements in accordance with standards
Submit accurate tax filings to the Lembaga Hasil Dalam Negeri
⚠️ Poorly prepared accounts can lead to:
Tax penalties
IRB audits
Financing issues
Poor business decisions
Why Professional Preparation Still Matters
Whether audited or not, the quality of your financial statements is critical.
Engaging a professional accountant ensures:
✅ Compliance with MPERS / MFRS
✅ Accurate financial reporting
✅ Proper tax treatment
✅ Reduced risk of errors or penalties
✅ Better insights for decision-making
Audited vs Unaudited: Which is Better?
There is no one-size-fits-all answer.
Audited financial statements provide higher credibility and assurance
Unaudited financial statements offer cost savings and flexibility
👉 The right choice depends on your:
Company size
Regulatory requirements
Business goals
Stakeholder expectations
How We Can Help
At Loi & Co, we support Malaysian companies with:
Preparation of unaudited financial statements
Coordination and support for statutory audits
Compliance with MPERS / MFRS
Tax-ready financial reporting for submission to Lembaga Hasil Dalam Negeri
Get Professional Advice
Not sure whether your company needs audited or unaudited financial statements?
👉 Speak to us today — we’ll help you determine the right approach and ensure your accounts are fully compliant.