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Accounting

SECTION 243: INTERPRETATION


For the purposes of this Division-
“approved accounting standards” has the meaning assigned to it in section 2 of the Financial Reporting Act 1997,

“subsidiary” except for section 246 has the meaning assigned to it in the approved accounting standards issued by the Malaysian Accounting Standards Board established under the Financial Reporting Act 1997.


SECTION 244: COMPLIANCE WITH APPROVED ACCOUNTING STANDARDS.

The approved accounting standards shall apply to the financial statements of a company or the consolidated financial statements of a holding company if, at the time when the financial statements or consolidated financial statements are made out, the approved accounting standards-

(a) Apply in relation to the financial year of the company or the holding company to which the financial statements or consolidated financial statement relate

(b) Are relevant to those financial statements or consolidated financial statements.

(2) Without prejudice to the generality of the provisions of this Subdivision, the directors of a company shall ensure that the financial statements of the company and, if the company is a holding company for which consolidated financial statements of the company are made out in accordance with the applicable approved accounting standards and shall –

(a) In the case of a public company, be circulated to its members and laid before the company at its annual general meeting

(b) In the case of a private company, be circulated to its members or laid before the company at a meeting of members.

(3) Notwithstanding subsection (2), the directors of a company or holding company shall not be required to ensure that the financial statements or consolidated financial statements, as the case may be, are prepared in accordance with the approved accounting standard would not give a true and fair view-

(a) Of the matters required under section 249 to be dealt with in the financial statements or consolidated financial statements

(b) Of the results of the business and the state of affairs of the company and, if applicable, of all the companies the affairs of which are dealt with in the consolidated financial statements.

(4) If the financial statements of a company or consolidated financial statements of holding company are not prepared in accordance with a particular approved accounting standard under subsection (3) the directors of the company shall-

(a) Disclose by way of a note on the financial statements the reason for not making out the financial statements or consolidated financial statements in accordance with the approved accounting standard

(b) Give particulars in the note of the quantified financial effect on the financial statements or consolidated financial statements if the relevant approved accounting standards was complied with.

(5) Notwithstanding anything in this Act, if financial statements are required to be prepared for or lodged with the authorities referred to in section 26D of the Financial Reporting Act 1997, those financial statements shall be prepared in accordance with the approved accounting standards subject to any specifications, guidelines or regulations as may be issued by the authorities.

(6) The information in the accounts or consolidated accounts of persons reporting to the authorities as referred to in section 26D of the Financial Reporting Act 1997 shall be deemed to have complied with the requirements of this Division if the financial statements are made out in accordance with that law.

(7) If a conflict or inconsistency arises between the provisions of an applicable approved accounting standard and this Act in their respective applications to the financial statements of a company or consolidated financial statements of a holding company, the provisions of the applicable approved accounting standard shall prevail.


SECTION 245: ACCOUNTS TO BE KEPT.

(1) A company, the directors and managers of a company shall-

(a) Cause to be kept the accounting and other records to sufficiently explain the transactions and financial position of the company and enable true and fair profit and loss accounts and balance sheets and any documents required to be attached thereto to be prepared.

(b) Cause the accounting and other records to be kept in a manner as to enable the accounting and other records to be and properly audited.

(2) A company, the directors and managers of a company shall cause appropriate entries to be made in the accounting and other records within sixty days of the completion of the transactions to which the entries relate.

(3) The company shall retain the records referred to in subsection (1) for seven years after the completion of the transactions or operations to which the entries relate.

(4) The records referred to in subsection (1) shall be kept at the registered office of the company or at such other place as the directors think fit, and shall at all times be open for inspection by the directors at all times.

(5) Notwithstanding subsection (4), the accounting and other records of operations outside Malaysia may be kept by the company at a place outside Malaysia provided that such accounting and other records shall be sent to and kept at a place in Malaysia and be
made available for inspection by the directors at all times.

(6) The accounting and other records referred to in subsection (5) shall include such statements and returns with respect to the business dealt with in the records so kept as to enable the preparation of true and fair financial statements and any documents
required to be attached to the financial statement.

(7) If any accounting and other records are kept at a place outside Malaysia under subsection (4) or (5), the Registrar may require the company to produce those records at a place in Malaysia or determine the type and manner of the records to be kept in Malaysia.

(8) The Court may, in any particular case, order that the accounting and other records of a company be open to inspection by an approved company auditor acting for a director, subject to a written undertaking given to the Court that information acquired by the auditor during his inspection shall not be disclosed by him except to that director.

(9) The company and every officer who contravene this section commit an offence and shall, on conviction, be liable to a fine not exceeding five hundred thousand ringgit or to imprisonment for a term not exceeding three years or to both.


SECTION 248: DIRECTORS SHALL PREPARE FINANCIAL STATEMENTS.

(1) The directors of every company shall prepare financial statements-

(a) Within eighteen months from the date of its incorporation

(b) Subsequently, within six months of its financial year end.

(2) The financial statements referred to in subsection (1) shall be duly audited before the financial statements are sent to every member under section 257 and laid before an annual general meeting under section 340.

(3) Any director of the company who contravenes this section commits an offence and shall, on conviction, be liable to a fine not exceeding five hundred thousand ringgit or imprisonment for a term not exceeding one year or both,

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