Frequently Asked Questions
An audit firm is a group of professional accountants that provide a range of accounting, audit and assurance services for clients in order to improve the company's overall efficiency and growth while identifying the inefficiencies and inconsistencies that exist in their setup.
The purpose of an audit is to deliver an independent examination of the financial statements and analyze whether the information presented in the financial report reflects the financial position of the organization/company on a given date.
The auditor makes an opinion of whether the financial statements are free of any type of inconsistency, fraud or errors, etc. They assess audit procedures type and the extent they will do, according to the risks they have already identified. Some of major of responsibilities of an auditor are as follow:
- Asking numerous questions from a range of individuals exist in the organization.
- Inspecting accounting and financial records as well as other tangible items, etc.
- Provide recommendations on the most necessary assumptions.
- Evaluating and testing the internal controls of an organization.
- Monitoring specific processes within the organization.
The three most common types of audits in the accounting industry are internal audit, external audit, and Internal Revenue Service (aka. IRS). Other types are related to a financial audit, operational audit, statutory audit, compliance audit, and tax audit. There are also some special-purpose audits that some independent firms provide during the auditing process.
Assurance in auditing analyzes and is used in the assessment of financial statements or compliance efforts.
The most common types of assurance services are listed as under:
- Operational and Financial Reviews
- Business Performance Measurement
- Risk Assessment
- Compliance Reviews
- Information Systems Reviews, etc.
The major difference between accounting and bookkeeping is that Accounting is responsible for interpreting, classifying, analyzing, reporting, and summarizing financial data, while Bookkeeping is all about recording financial transactions in some way, and it doesn't interpret or analyze data.
GMNI is an international authoritative association of quality professional accounting firms. They share a commitment to service the needs of their clients, from start-ups to developing bodies and businesses. They have over 60 member firms and more than 170 member offices from approx. 51 countries worldwide.
Major accounting services include but are not limited to;
- Making the complete set of accounts
- Financial assessment reviews and compilation
- Preparation of reports
- Preparation of schedules for audit
- Management Accounting
- Business performance monitoring
- Assets management
- Internal Auditing
- External Auditing
- Statutory Auditing
- Payroll services
- Forensic Accounting
- Business tax return preparation
- Budgeting and forecasting
- General business consulting & more
An assurance report is the substantial output of an assurance engagement and can be used for external or internal use. The reports are highly sensitive and only be shared with the stakeholders of the organization.
In general, accountants provide the following services to their clients.
- Initial meetup for initiating best business structure
- Reviewing, making, and auditing the clients' financial statements
- Register yourself personally for self-assessment, if you are a sole trader or in a partnership
- Setting up the payroll system
- Auditing and Assurance services
- Ongoing accounting services on a monthly, quarterly, or yearly basis
- Tax planning, tax advisory, estimations, etc
- Submitting tax returns when needed
- Register the client's business for VAT, if necessary
- Register for corporation tax, for limited liability companies
- Making annual company accounts
- Bookkeeping on a monthly basis
- Management consulting to improve business growth
- Company secretarial services
- And many more
There is a misconception that auditing is the same as accounting. But in reality, both are different to some extent. The major difference between accounting and auditing is that accounting is an act of maintaining the financial records of a company which aim is to provide a true and fair view of the financial statements to various users; In contrast, auditing is the evaluation of financial records prepared by the accounting process which aim is to verify the reliability of the financial records.
Another major difference between the two is that accounting is done on an almost daily basis while auditing is usually done annually. Similarly, accounting is processed by the employees of an organization, while an audit is compiled by an independent body with no financial ties to the organization.
Client Accounting Services (CAS), also known as client advisory services, are those accounting services that accounting or audit firms provide to control the financial backbone of any clients’ businesses. Client accounting services include but are not limited to:
Accounting, bill payment, accounts payable, etc.
Document gathering/management, expense management
Transaction processing, bookkeeping, and more
Payroll compliance and more
Periodic tax payments and compliance
Forecasting and reporting
Reviewing financial performance to improve business
Accounts software is great for solving various complex accounting tasks; however, if you don't know which software is best for your business, it can be time-wasting and useless. With the help of the best accounting firm, you can save valuable time and peace of mind because these firms are backed by certified accountants who know the best use of accounting softwares.
Accounting services costs vary from firm to firm and region to region. It will also depend on the type of work. Usually, accountants' fees start from $100 and go up to $500 per month and sometimes even more. Hourly rates for accounting and auditing services range from $20 to $50 per hour.
Accounting outsourcing is a special service offered by an accounting firm or an accountant in which they perform various required financial tasks at their client's working place instead of their own office.
Corporate Accounting refers to a specific accounting branch that deals with accounting for organizations, assists in developing their accounts and any cash flow statements, analyzes and interprets the financial results for the companies, as well as handles events i.e. amalgamation, absorption, and consolidated balance sheets.
Three accounting standards are being used in Malaysia:
- MASB Approved Accounting Standards for Entities other than private entities – Malaysian Financial Reporting Standards (MFRSs)
- MASB Approved Accounting Standards for Private Entities – Private Entity Reporting Standards (PERSs)
- MASB Approved Accounting Standards for Private Entities – Malaysian Private Entities Reporting Standard (MPERS)
MIA, short of the Malaysian Institute of Accountants, is the umbrella body for the accountancy profession in Malaysia. It was created under the Accountants act 1967 to manage and develop the accountancy profession in Malaysia.
MASB, short of "Malaysian Accounting Standards Board", was developed under the Financial Reporting Act 1997 (Act) as the standard-setting body of the Financial Reporting Foundation (FRF). Its mission is to develop and promote premium quality, internationally practiced, and consistent financial reporting and accounting standards in Malaysia.
The Malaysian Financial Reporting Standard (MFRS), imposed on 1 January 2012, is used and practiced by a private limited company that needs to make integrated accounts that are compliant with the full financial reporting standards set by the Malaysian Accounting Standards Board(MASB).
Private corporate bodies now have a choice of pursuing the existing PERS's Framework or apply the MFRS Framework. MFRS framework improved the quality, credibility, and transparency of your financial information.
Following are some other largest accounting bodies operating in Malaysia.
- Malaysian Institute of Certified Public Accountants (MICPA)
- Institute of Commercial and Industrial Accountants, Malaysia (ICIA)
- Association of Chartered Certified Accountants (ACCA)
- Chartered Institute of Management Accountants (CIMA)
- Institute of Chartered Accountants in England and Wales (ICAEW)
- Institute of Chartered Accountants in Australia (ICAA) and CPA Australia
Though we don't know the exact numbers, but it is estimated that Malaysia has approx. over 5 Million professional accountants working in 2022.