At Marie J & Co, most of our SME clients want one thing: a clear, defensible way to budget for audit. No guesswork, no surprise add-ons—just a simple, transparent method that matches the reality of your business. This guide shows you how to calculate audit fee in Malaysia, what drives the numbers up or down, and how to prepare so your fee stays efficient.
The simple way to budget (the core formula)
When you strip away the jargon, audit pricing is built on this:
Estimated Hours × Blended Hourly Rate + Out-of-Pocket Costs + Service Tax
- Estimated hours = how much work your audit needs (planning, testing, reviews).
- Blended rate = average of partner/manager/associate time.
- Out-of-pocket = travel, bank confirmations, courier, etc.
- Service tax = applied according to current rules.
Use this as your “sanity check” against any proposal.
What actually drives your audit fee
Think of the fee like a reflection of risk + complexity + logistics. These are the usual levers:
- Size & volume: Revenue, assets, and number of transactions influence sampling and testing hours.
- Complexity of your accounting: Things like multi-element revenue, construction/long contracts, foreign currency, significant estimates (impairment, provisions), and fair value measurements require deeper work.
- Group structure: Subsidiaries or associates mean consolidation procedures and component coordination.
- Quality of your records: Clean, up-to-date ledgers and reconciliations reduce rework; messy books increase testing.
- Internal controls: Documented processes and proper segregation of duties lower audit risk—and often the hours.
- Deadlines & readiness: Tight timelines or frequent last-minute changes pull in senior time and multiple passes.
- On-site logistics: Multiple branches, inventory counts at different locations, or travel days add cost.
- First-year audits & prior-year issues: Year one includes set-up and walkthroughs; unresolved past findings add scope.
A quick step-by-step to estimate your own fee
- Choose your “complexity band”
- Basic: Single Sdn Bhd, one location, clean records, straightforward revenue.
- Moderate: A few tricky areas (e.g., forex, contract assets), or light consolidation.
- Complex: Group audits, regulated industries, heavy estimates, many locations.
- Map hours to that band: Think in ranges (e.g., Basic < Moderate < Complex). If you grew a lot this year, nudge up.
- Pick a realistic blended rate: Smaller firms typically quote a single average rate across the team; specialist work can be higher.
- Add out-of-pocket: Budget a sensible buffer for confirmations, courier, and any travel.
- Apply service tax: Multiply the professional fee (and any taxable disbursements) by the prevailing rate.
That’s it. You now have a defensible ballpark before you even request proposals.
What usually adds to the base quote
- Consolidation or component auditors
- Multiple inventory counts or unusual count dates
- Complex revenue recognition or significant estimates
- Tight lender/statutory deadlines
- Agreed-upon procedures or extra certificates
If any of these apply, expect adjustments—and make sure they’re spelled out in the scope.
How to keep your fee efficient (without cutting corners)
- Close on time: Lock your trial balance and share a clean set of lead schedules.
- PBC list ready: Bank recs, AR/AP aging, FA register, payroll summaries, leases, and key contracts—organised and complete.
- Document judgments: Short memos for revenue policies, impairments, provisions, and leases reduce back-and-forth.
- Single coordinator: One point of contact speeds responses and avoids duplicate questions.
- Agree the calendar early: Interim testing dates, inventory counts, and final sign-off—put it in writing.
- Resolve last year’s findings: Clearing prior issues saves time this year.
Requesting quotes? Use this 10-point brief
To get apples-to-apples proposals, include:
- Company profile (industry, size, locations)
- Group structure (subsidiaries/associates)
- Systems (accounting software, modules, integrations)
- Complexities (forex, long contracts, estimates, related parties)
- Prior-year info (issues/qualifications, fee band if shareable)
- Logistics (inventory sites, travel)
- Timelines (year-end, board/AGM, lender deadlines)
- Deliverables (statutory report + any extras)
- Assumptions (clean TB by date, PBC ready, one review round)
- Pricing breakdown (hours by level, blended rate, out-of-pocket, tax)
FAQs we hear from Malaysian SMEs
Do all Sdn Bhd require an audit?
Most companies do, though certain smaller private companies may qualify for audit exemption subject to current thresholds and conditions. If you’re unsure, ask us to review your latest numbers and structure.
Why is the first-year fee usually higher?
Your auditor needs to learn your business, perform first-time walkthroughs, and establish baselines; fees often stabilise from year two if scope stays the same.
Can better prep really lower my fee?
Yes. Clean schedules, timely answers, and clear memos on tricky areas reduce audit hours—without compromising quality.
Need a clearer number for your business?
Share the 10-point brief and we’ll convert it into a transparent estimate using the formula above—so you can plan your budget with confidence.
Related service: Learn how we handle statutory audits for SMEs on our Statutory Audit page.
