# The Audit Request List, and How to Be Ready for It

> A prepared-by-client checklist for a Malaysian statutory audit, organised by cycle, with the assertion each item is there to support and the three items that reliably blow the deadline.

- Category: audit
- Language: en
- Status: published
- Updated: 2026-07-20
- Canonical: https://negaraku.md/en/audit/audit-preparation-checklist

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The request list looks like an administrative document. It is not. It is the audit
plan, translated into things you have to produce, and every line on it exists to
support one specific claim the financial statements are making.

Once you can see which claim, you stop arguing about documents and start supplying
the ones that actually work.

## The six assertions everything maps to

| Assertion | The claim being tested | Typical evidence |
| --- | --- | --- |
| **Existence** | The asset or transaction is real | Physical inspection, third-party confirmation |
| **Completeness** | Nothing has been left out | Search for unrecorded liabilities, supplier statements, reconciliations |
| **Valuation** | The amount is right | Costing, ageing, impairment and recoverability analysis |
| **Rights and obligations** | The company owns it, or owes it | Title documents, agreements, charge register |
| **Cut-off** | It belongs in this period | Transactions either side of the year end |
| **Presentation and disclosure** | It is described correctly in the notes | Related-party analysis, commitments, contingencies |

Completeness is the hard one, because your own records cannot prove it. That is why
the auditor keeps asking for things generated outside the company.

## Before anything else — the three that blow deadlines

**1. Intercompany balances that do not agree.** Every intercompany balance has a
mirror in another entity's ledger. If they differ by so much as a cheque in transit,
consolidation cannot proceed and the elimination will not clear. Reconcile them
with the counterparty and get the counterparty to sign the reconciliation, before
fieldwork. In a group with a foreign subsidiary, allow for time zones and different
closing calendars.

**2. Related parties that were never identified.** MFRS 124 fails at the
identification stage, not the disclosure stage. Build the list from the source: the
register of directors, the register of members, directors' declarations of
interest, and a direct conversation with the shareholders about what else they own.
A company controlled by a director's spouse is a related party. So is one
controlled by a shareholder's adult child. Arm's length pricing does not remove the
disclosure.

**3. Director's account movements with no support.** A director's current account
that moves through the year with nothing but journal entries behind it will be
questioned as a matter of course. What is needed is authorisation — board minutes,
loan agreements where relevant, evidence of what the payment was for, and the tax
treatment considered. This is simultaneously an audit issue, a disclosure issue and
a tax issue, and it produces more late adjustments than any other single item.

## The checklist, by cycle

### General ledger and statutory records

| Item | Assertion served |
| --- | --- |
| Final trial balance, locked, agreeing to the draft financial statements | All |
| Prior year signed financial statements and audit adjustments | Opening balances |
| General ledger detail and journal listing for the year, including all manual journals | Completeness, occurrence |
| Minutes of directors and members meetings for the whole year and up to the report date | Rights, subsequent events, disclosure |
| Register of members, register of directors, register of charges, beneficial ownership register | Rights, presentation |
| Constitution and any amendments | Presentation |

Statutory registers get treated as company secretarial housekeeping. In an audit
they are evidence, and s.266(2)(b) requires the auditor to form an opinion on
whether **proper accounting and other records, including registers**, have been
kept as the Act requires.

### Revenue and receivables

| Item | Assertion served |
| --- | --- |
| Aged receivables listing agreeing to the ledger control account | Existence, valuation |
| Sales invoices and delivery documents for the last and first two weeks either side of year end | Cut-off |
| Credit notes issued after year end | Occurrence, valuation |
| Expected credit loss computation and its basis | Valuation |
| Receipts after year end, matched to year-end balances | Existence, valuation |
| Signed authorities for customer confirmation requests | Existence |

### Purchases and payables

| Item | Assertion served |
| --- | --- |
| Aged payables listing agreeing to the ledger | Completeness |
| Supplier statements for the largest balances, reconciled | Completeness |
| Payments made after year end with the invoice they settled | Completeness, cut-off |
| Goods received notes either side of year end | Cut-off |
| Accrual schedule with the basis for each accrual | Completeness, valuation |

### Inventory

| Item | Assertion served |
| --- | --- |
| Written count instructions, issued before the count | Existence |
| Final count sheets, signed and pre-numbered | Existence |
| Costing basis and a sample of cost build-ups | Valuation |
| Net realisable value analysis, selling prices after year end | Valuation |
| Slow-moving and obsolescence analysis with the provision policy | Valuation |
| Goods in transit, consignment and third-party locations | Existence, rights |

### Fixed assets

| Item | Assertion served |
| --- | --- |
| Fixed asset register reconciled to the ledger | Existence, completeness |
| Invoices for additions and evidence of disposals | Rights, occurrence |
| Depreciation computation and policy | Valuation |
| Title documents, and hire purchase or lease agreements | Rights |
| Impairment indicators considered, in writing | Valuation |

### Cash and borrowings

| Item | Assertion served |
| --- | --- |
| Bank reconciliations for every account, including dormant ones | Existence, completeness |
| Signed bank confirmation authorities, issued in week one | Existence, rights |
| Loan and facility agreements, including covenants | Presentation, going concern |
| Charges registered with SSM, agreed to the register of charges | Rights, disclosure |
| Repayment schedules split between current and non-current | Presentation |

### Payroll and statutory deductions

| Item | Assertion served |
| --- | --- |
| Payroll summary reconciled to the ledger | Accuracy |
| EPF, SOCSO, EIS and PCB remittance evidence reconciled to the payroll | Completeness |
| Directors remuneration analysis, split by category | Disclosure |
| Leave, bonus and other provision computations | Completeness, valuation |

### Tax

| Item | Assertion served |
| --- | --- |
| Prior year tax computation and the assessment or notice received | Valuation |
| Current year draft computation with the deferred tax working | Valuation, presentation |
| CP204 and CP204A filings with the payment record | Completeness |
| Capital allowance schedule agreed to the fixed asset register | Valuation |

### Related parties and disclosure

| Item | Assertion served |
| --- | --- |
| Complete related-party listing with the basis of the relationship | Completeness, disclosure |
| Transactions and balances with each, and the pricing basis | Disclosure |
| Key management personnel compensation, by category | Disclosure |
| Directors declarations of interest under s.221 | Completeness |
| Commitments, guarantees and contingent liabilities | Disclosure |
| Solicitors details for confirmation requests | Completeness |

### For the close

| Item | Assertion served |
| --- | --- |
| Board paper on going concern, with the cash flow forecast behind it | Going concern |
| Events after the reporting period, with the treatment applied to each | Subsequent events |
| Draft directors report covering the Fifth Schedule requirements | Presentation |
| Signed management representation letter, dated no later than the report date | Evidence, ISA 580 |

## Things that are not on the list but should be

**A locked trial balance.** Every movement after fieldwork starts invalidates work
already done. Agree a lock date and hold it.

**One point of contact.** Audit queries routed through several people produce
inconsistent answers, and inconsistent answers produce more queries.

**A shared query log.** Open point, owner, date raised, date cleared. Most audit
delay is not difficulty; it is queries sitting unanswered in an inbox.

**Last year's audit adjustments, actually posted.** Adjustments agreed at the
clearance meeting and never booked reappear as prior-year differences, and the same
conversation happens twice.

## The statutory floor underneath all of this

Section 245 of the Companies Act 2016 requires accounting and other records that
sufficiently explain the transactions and financial position, kept so they can be
**conveniently and properly audited**. Two clocks inside it are frequently missed:
entries within **60 days** of the completion of the transaction, and retention for
**seven years**. Contravention carries a fine up to **RM500,000** or three years
imprisonment, on the company and every officer.

None of that depends on there being an audit. It is the reason a company that took
audit exemption still has to keep the same records.

## Common mistakes

- **Producing documents instead of reconciliations.** A ledger printout is not a
  reconciliation and does not answer a completeness question.
- **Leaving bank and solicitor confirmations to the auditor's follow-up.** You
  cannot speed them up in week six.
- **Identifying related parties from the ledger.** They are identified from the
  registers and from the shareholders, then traced to the ledger.
- **Treating the director's account as a plug.** It is the first place a reviewer
  looks.
- **Moving the trial balance during fieldwork.**
- **Preparing the going concern paper after the auditor asks for it**, which is the
  point at which it stops looking like the board's own assessment.
- **Assuming the auditor will draft the disclosure notes.** Preparing the financial
  statements is the directors' duty under s.244 and s.248, whoever types them.

## What's next

The adjustments that come out of this process do not stop at the financial
statements — audited profit is the starting point for the tax computation, and a
late adjustment moves the tax number too.

## Sources

- Companies Act 2016 (Act 777), reprint as at 1 August 2022 — https://www.ssm.com.my/Pages/Legal_Framework/Document/Companies%20Act%202016_Akta%20777_BI%20(1.8.2022).pdf (SSM)
- AAPG 1 — Auditors report on financial statements prepared in accordance with the MFRS framework and Companies Act 2016 — https://mia.org.my/wp-content/uploads/2022/06/MIA_Audit_and_Assurance_Practice_Guide_AAPG_1-1.pdf (MIA)
- Malaysian Accounting Standards Board — approved accounting standards — https://www.masb.org.my/pages.php?id=19 (MASB)
- ISA 580, Written Representations — https://mia.org.my/box/2022/04/ISA_580.pdf (MIA)

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License: CC BY-SA 4.0