The Companies Commission of Malaysia (SSM) had increased the minimum audit exemption threshold to income of RM1 million from original figure of RM300,000. The exemption is a continuous effort to take away certain compliance procedure that small companies did get some cost savings. The benefit of having audited financial statements are :

• Improved credibility
• Improved efficiency
• Exposing fraud
• Ensure regulartory compliance

Having known the benefit you need now to consider the following before decide to drop the audit :

• If you want to grow your business surely you want to have verified records to facilitate planning.
• You need audited accounts to ask for credit facility, for government grant, participate in government tenders.
• You need reliable financial information to make planning and decisions.
• The auditors will have reservation on opening balance once subjected to audit after few years without audit. Reservation means a doubts in your financial statements may not good to third parties.
• If you to want exit or joint venture or merger surely the reliable financial statements must be those have been audited.
• The laws mainly Companies Act and Income Tax Act change every year definitely have heavy penalty on non compliance that will be the full responsibility of company and directors.

In the first place the exemption give cost savings but that may be too small compared with problems you will have to face if your accounts are not audited.