How to Find a Suitable Audit Firm
- Chow Ping
- 2 days ago
- 5 min read
Audit. Bet you’ve heard that word thrown around a lot — but do you know what it actually means?
Maybe someone suggested you hire one.
And you’re thinking about it. But first, you have questions.
What is an audit firm?
Do you even need to hire an audit firm?
How to know if an accountant is suitable for you?
Why is the sky blue?
Sorry, can’t help you with the last one. But as for the other questions, dig in, because we’re about to give you the full run down.
Let’s go!
What does audit firm mean?
Before you start shopping around, let's get clear on what you're actually paying for.
An audit firm conducts an independent review of your financial records to verify accuracy and compliance with regulations.
Think of them as financial fact-checkers.
They're not there to catch you doing something wrong — they're there to verify you're doing things right.
Here are the main types of audits you might need:
Financial Audit — Reviews your financial statements to ensure they're accurate and compliant with accounting standards
Tax Audit — Ensures you're compliant with tax regulations and helps identify tax planning opportunities
Compliance Audit — Verifies that you're meeting industry-specific regulations and legal requirements
Most Malaysian businesses need at least a financial audit once they hit certain thresholds under the Companies Act 2016.
Does every company need to hire an audit firm?
Short answer: No, not every company.
Under the Companies Act 2016, most private limited companies (Sdn Bhd) in Malaysia are required to conduct annual audits.
But there are exemptions.
You can skip the audit if your company meets ALL of these criteria for two consecutive financial years:
Annual revenue ≤ RM100,000
Total assets ≤ RM300,000
Number of employees ≤ 5
Other exemptions include:
Dormant companies (no business activity since incorporation or current financial year)
Zero-revenue companies (no revenue generated in the current financial year)
Companies that MUST be audited:
Public listed companies
Companies with foreign shareholding
Licensed entities regulated by Bank Negara, SC, or other authorities
Private limited companies exceeding the exemption thresholds
Any company with investor or lender audit requirements
Important: Even if you're exempt from audits, you still need to prepare unaudited financial statements that comply with accounting standards.
Also, sole proprietors and partnerships can claim audit exemption under Malaysian law.
Should you do a voluntary audit even if you're exempt?
Some companies choose to audit voluntarily because it enhances credibility with banks and investors, provides assurance to shareholders, ensures financial accuracy, and meets investor due diligence requirements.
Red flags to watch out for when vetting audit firms
Not all audit firms are created equal.
Here are the warning signs that should send you running:
Red Flag #1: They can't explain industry-specific regulations relevant to your business
If you run an F&B business and the auditor can't discuss specific inventory valuation methods for perishables, that's a problem.
Industry expertise matters. A lot.
Red Flag #2: Zero questions about your business during initial consultation
Good auditors are curious.
They ask about your business model, revenue streams, major expenses, and growth plans.
If they jump straight to pricing without understanding your business first, they're not interested in providing quality service — they just want to close the deal.
Red Flag #3: Unclear or hidden fee structures
A reputable audit firm will clearly explain base audit fees, additional costs for complex transactions, charges for additional services, and payment terms.
If they're vague about pricing or mention "additional fees may apply" without specifics, you're setting yourself up for surprise bills later.
Red Flag #4: No modern audit software/still doing everything manually
It's 2025.
If your audit firm is still working entirely with paper files and manual spreadsheets, they're wasting your time and theirs.
Modern audit software streamlines data collection, reduces errors, and speeds up the entire process.
Red Flag #5: Only available during audit season, disappears rest of year
Your audit firm should be a year-round partner, not a once-a-year visitor.
If they only respond to emails during audit season and ghost you the rest of the year, that's not a partnership — that's a transaction.
Green flags — what good audit firms look like
Now for the good stuff.
Here's what to look for:
Green Flag #1: Industry-specific expertise and client portfolio
A firm with relevant experience will understand your industry's unique challenges, know the specific regulations you need to comply with, and complete your audit faster because they're familiar with your business model.
Green Flag #2: Proper certifications (MIA, ACCA, etc.)
In Malaysia, audit firms must be registered with the Malaysian Institute of Accountants (MIA).
Individual auditors should hold recognized certifications like Chartered Accountant (CA), Certified Public Accountant (CPA), or Association of Chartered Certified Accountants (ACCA).
Green Flag #3: Transparent pricing with clear deliverables
A trustworthy audit firm will provide a detailed breakdown of costs, explain what's included in the base fee, clarify potential additional charges upfront, and outline exactly what deliverables you'll receive.
No surprises. No hidden fees.
Green Flag #4: Offers ongoing support, not just annual check-ins
The best audit firms act as advisors throughout the year.
They'll answer questions about accounting treatment for new transactions, advise on the financial impact of business decisions, keep you informed about regulatory changes, and help you prepare for the next audit cycle.
The 6-step process to find your audit firm
Here's exactly how to find an audit firm that actually fits your business:
Step 1: Understand what you actually need
Get clear on your requirements:
Size and complexity of your business
Industry-specific requirements
Additional services you might need (tax planning, internal controls assessment, business advisory)
Step 2: Research and gather options
Industry referrals: Talk to other business owners in your industry. Personal recommendations from trusted sources are gold.
Professional body directories: Check the Malaysian Institute of Accountants (MIA) directory for registered audit firms.
Online reviews: Look for client testimonials and case studies on the firm's website.
Step 3: Check credentials and track record
Confirm that the firm and its partners are registered with MIA and hold active practicing certificates.
Ask about their experience with businesses similar to yours in size and industry.
Step 4: Request proposals and compare
Contact your shortlisted firms and request detailed proposals.
Don't just compare prices. Look at depth of understanding shown in their proposal, proposed audit approach and timeline, team composition and experience levels, and value-added services included.
Step 5: Assess technology and communication style
Ask them to demonstrate or explain their audit technology. Modern firms use cloud-based platforms that make document sharing seamless.
Ensure they have proper security measures: encrypted file transfers, secure cloud storage, and compliance with data protection regulations.
Step 6: Evaluate long-term fit
Consider whether they can handle multiple frameworks as your business grows, whether they'll scale with your business, and what their approach to ongoing support looks like.
The audit firm that grows with you
When you hire an audit firm, know that your goal isn't just to survive this year's audit. Nay, you want to partner with someone who understands where your business is headed.
The right firm will make compliance feel less like a burden, help you identify financial opportunities you're missing, keep you ahead of regulatory changes, and free up your time to focus on actually growing your business.
The wrong firm will cost you money, time, and peace of mind.
At Douglas Loh & Associates, we've been helping Malaysian businesses navigate audits and compliance for over 32 years. We've watched businesses grow from single-location operations to multi-state enterprises.
And we've learned that the best audit relationships are the ones where business owners actually feel supported, not stressed.
Want to focus on your business while we manage the boring paperwork for you?
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