Minimum Audit Fees
Minimum rates of audit fees chargeable for all organisations including companies and corporates but excluding voluntary charitable organisations are set out as bellow
Gross Assets or turnover Whicever is Higher and Minimum audit fees to be charged
Dormant (min audit fee) RM300
1 to 100,000 RM800
Next 100,000 to 250,000 RM1,325
Next 250000 to 500,000 RM1,950
Next 500,000 to 1,000,000 RM2,700
Next 1,000,000 to 2,500,000 RM4,200
Next 2,500,000,to 5,000,000 RM6,200
Next 5,000,000 to 10,000,000 RM9,950
Above 10,000,001 Negotiable
i) The above prescribed rates are the minimum audit fees applicable for draft accounts submitted for audit with proper schedules. members may charge higher audit fees having considered the degree of internal control, complexity of transactions, consolidation, requirements, circulation of the audit reports, level of services, grade of staff, etc.
ii) For draft accounts submitted without proper schedules and therefore requiring a member firm to utilise more skill and knowledge as well as time spent on the assignment, the member firm should advise the client that higher audit fees may be charged for such audit assignments.
iii) For the purpose of this schedule, 'gross assets' shall mean include total fixed and current assets excluding intangible assets, if any, of an organisation as appearing on the balance sheet thereof the year under audit.
iv) For the purpose of this schedule, 'gross turnover' shall mean and include :
(a) total amount of sales including all other income and earning for the year in the case of al manufacturing and trading organisations :
(b) Total gross premium income including all other income and earnings for the year in the case of all insurance organisations :
(c) total amount of interest, discount, commission, exchange brokerage and all other income and earnings for the year in the case of banks and other financial institutions:
(d) total amount of commission including all other income and earning for the year in the case of travel agencies, indentors, brokers and other organisations running on commission earnings basis:
(e) Total receipts/ bills accounted for and all other income and earnings for the year in the case of construction companies and other organisations not covered under (a) to (d) above.
v. Dormant companies are companies having no tangible assets or operations.
vi. Notwithstanding the minimum audit fees stated in the above prescribed rates of audit fees, members are allowed to exercise discretion in allowing abatement on the said prescribed fees in certain special cases subject to the following floor limit :-
(a) the audit fees charged to a particular client organisation should not be below a percentage of the total operational expenditure of the said organisations as follows:
Up to RM50,000 2%
RM50,001 - RM200,000 1%
RM200,001-RM1,000,000 0.5%
RM1,000,001 - RM2,000,000 0.2%
Above RM2,000,001 0.1%
Total operating expenditure excludes direct costs of sales but includes all expenses charges against gross profit to arrive at net profit before tax.
(b) In the transitional period of the first three years, member firms may charge an existing client audit fees lower than the prescribed minimum audit fees of the following basic :-
1st year - 150% of the previous year
2nd year - 150% of the new audit fees of the 1st year
3rd year - 150% of the new audit fees of the 2nd year
Note : Members who charge audit fees below the prescribed minimum fee will be considered to have in fringed Paragraph 11-5 of the Institute's By-Laws (On Professional Conduct and Ethics).
