Understanding Unaudited Financial Statements

An unaudited financial statement is a financial report that has not undergone the formal verification process by an independent external auditor. In Malaysia, these statements are often prepared for internal use by management or for compliance with regulatory bodies that do not require audited reports for certain types of businesses or under specific circumstances.

 

Purpose and Usage

Unaudited financial statements serve various purposes, including internal budget analysis, interim reporting, and preliminary disclosure to potential investors or lenders. They provide a snapshot of a company’s financial health, allowing stakeholders to make informed decisions without the assurance an audit provides.

 

Regulatory Framework

In Malaysia, small companies meeting specific criteria may be exempt from audit requirements, making unaudited financial statements more common among SMEs. However, these companies must ensure that their financial reporting still complies with Malaysian Financial Reporting Standards (MFRS) and is accurate and truthful.