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Tax Relief and Exemption for Businesses in 2022

bajet 2022

Tax Relief and Exemption for Businesses in 2022

Malaysia has always been known for providing a variety of tax incentives to different types of businesses.

 

Similarly, in its 2022 budget, Malaysia has announced many incentives to support companies and boost their post-pandemic growth. The overall worth of the 2022 budget is around 333.2 billion ringgits.

 

According to official sources, the budget’s goal is to build resilience in the economic sector and promote economic recovery to ensure companies can get back to their optimum working conditions after the pandemic.

 

Malaysia’s finance minister has also announced that the government is expecting the economy to grow between 5.5% to 6.5% in 2022.

 

Following are the major tax incentives in Malaysia as part of the 2022 budget.

1. Extension in SST Exemption

The vehicles sales tax exemption or SST was scheduled to end on 31st December 2021. However, according to the new measures, it has been extended to 30th June 2022.

 

100% exemption is given to the locally assembled vehicles, while fully imported vehicles will get 50% exemption. Furthermore, the local electric vehicle industry is also getting a 100% exemption to promote the development of electric vehicles.

 

KWSP

2. EPF Contribution

The finance minister has announced that the Employee Provident Fund will increase the period to minimize the EPF contribution rate from 11% to 9% till June 2022.

 

This measure aims to increase the amount of money given to the people.

RM2 billion has been allocated for this highly popular initiative.

3. Real Property Gains Tax

According to the 2022 Budget, real property gain tax will not be imposed on property disposals by citizens, foreigners, or permanent residents from the sixth year onwards.

 

As a result, the RPGT rate for property disposal in the 6th year is significantly reduced from 5% and 10% to 0% from 1st January 2022.   

 

The purpose of this measure is to support the real estate industry and give it much-needed support after the COVID-19 pandemic.

 

It is highly expected that the new tax incentives in Malaysia will play an integral role in the economic recovery and help overall economic conditions to improve for the people.

4. Income Tax Reliefs

The new budget also provides the following incentives to people in the next few years.

  • Significant extension of the special individual income tax relief of up to RM 2,500 on buying mobiles, laptops, and tablets till 31st December 2022.
  • The scope of individual income tax relief for health screening expenditure is increased to cover the expenses of mental health consulting services.
  • Individuals can also claim an extension in the individual income tax relief of up to RM3,000 for the payment of kindergarten charges until 2023.
  • Special individual income tax relief for local tourism expenses up to RM1,000 has also been extended till 2022.
  • People who purchase and install electric vehicle charging facilities can claim income tax relief of up to RM2,500.

5. PTPTN Payments

The government is offering a discount on the PTPTN payments from 1st November 2021 to 31st April 2022 for the following conditions:

  • 15% off for those individuals who want to make a full settlement.
  • 12% off for those who want to settle at least 50% of the loan balance.
  • 10% off for the individuals who are making repayment via scheduled salary deduction.
ptptn

According to the latest guidelines, borrowers can apply online to make the payment via salary deduction.

The discounts provided by the government will be reflected in the borrower’s loan account at the end of each month. These statements can be reviewed from the 7th of the next month.

6. Tax Incentives for SMEs

The Malaysian government has announced several tax incentives for businesses and SMEs. Companies should consider getting in touch with a professional accounting firm in Malaysia to get familiar with these incentives and apply for them.

 

For instance, the government is offering a total of RM40 billion under the Semarak Niaga program through direct loans, regular financing, and equity injections. Similarly, there are many micro-credit schemes offered by authorities like Bank Negara Malaysia and Bank Rakyat.

All In All

These initiatives show that you can apply for many different types of tax incentives in Malaysia.

 

It is highly expected that the government will start offering even more incentives in the future to support businesses and boost the overall economic recovery.

 

It is always a good idea for businesses to rely on professional accounting firms in Malaysia to get help from professionals in applying for relevant tax incentives and successfully obtain them.

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Short Term Vs. Long Term HR Strategy to Achieve Your Business Goals

short-term-long-term

Short Term Vs. Long Term HR Strategy to Achieve Your Business Goals

The payroll and HR services are highly important in setting realistic business goals for business success in the short and long term.


The HR employees address a variety of issues in a business. However, to fully understand how HR works, you should be familiar with the major differences between short and long-term HR strategies to ensure the implementation of suitable strategies to get the best results.


First of all, let’s understand what an HR strategy is.

What is an HR Strategy?

An HR strategy can be defined as a comprehensive plan, which allows the human capital management of a company to meet its goals.


The purpose of an HR strategy is to deal with a variety of aspects of hiring, onboarding, compensation, and employees’ skills development. Specific business goals play an integral role in setting the short and long-term HR strategy.


While you may only wish to build generic HR strategies to deal with a variety of challenges, you’ll profit from distinguishing between short-term and long-term issues, as well as their corresponding tactics.


Short-term HR strategies assist in the resolution of short-term challenges, while long-term HR strategies address long-term concerns—they’re not always convertible, and various situations need different responses.


HR personnel might perceive difficulties in two ways when they divide HR problems and solutions into short-term and long-term categories. As a result, HR personnel will be able to prioritize what has to be addressed immediately and what can wait.


Otherwise, brainstorming may become overwhelming, making it difficult to prioritize which issues to address first. As a result, you’ll be able to keep your HR department better organized and ensure that you’re meeting deadlines.

Flipping of wooden cube block for change short term to long term

Short-Term HR Strategy

The purpose of the short-term HR strategies is to keep the HR department informed about all existing HR duties while focusing on solving more pressing HR issues. There are many different short-term HR problems that can occur on a regular basis.

 

For instance, missing the deadline to file taxes, not submitting the required papers, and other such errors are part of the short-term HR strategies. Short-term HR approaches may assist in reducing some of the long-term consequences that can result in further complications.

 

Short-term HR strategies are related to the cash flow, organization budget, savings, stock investment, communication, and overall daily routines.

Long-Term HR Strategy

The goal of a long-term HR strategy is to prepare for potential problems that may or may not arise in the future.

 

It is important to have a reliable long-term HR strategy because it deals with addressing a wide range of potential issues and provides solutions in advance. Generally, the timeframe of a long-term HR strategy varies over a few months or even multiple years.

 

For instance, a long-term HR strategy also plays an integral role in resolving the issue of a high staff turnover rate.

 

Companies that have a plan in place to fill the positions on time do much better than organizations that do not plan for such situations in advance. Hence, a long-term HR strategy involves setting up a reliable employee recruitment policy.

 

Moreover, long-term HR strategy is typically associated with the overall sales, brand awareness, SEO, public reputation, and overall media presence of the organization.

 

Many companies also choose to trust professional accounting firms in Malaysia to fulfil this important process of designing short- and long-term HR strategies.

Connecting last jigsaw puzzle piece.

Generally, the two major differences between short- and long-term HR strategies are:

Scope

Every short-term goal should be related to a long-term goal in an ideal condition.

However, there are many instances in which daily changes to the companies and business goals result in drastic changes to the working procedures, meaning the scope of short-term planning can change compared to long-term planning.

Execution

The execution of the short-term plan depends on whether the current operations are playing their role in the completion of the projects.

 

On the other hand, the execution of long-term plans depends on whether

In Summary

In short, both short- and long-term HR strategies are important to ensure the success of the company.

 

Business owners and managers should focus on making suitable strategies or using professional payroll and HR services from accounting firms in Malaysia to ensure the right kind of strategies are implemented for the short- and long-term success of the company.

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How to Design and Implement a More Effective HR Process

human resources concept diagram

How to Design and Implement a More Effective HR Process

It takes a significant amount of time and energy to develop a successful human resource strategy. At the same time, it is important to focus on payroll and HR services because they are the centre of all strategic business decisions.

 

Important factors, like whether you want to raise your profit margin, grow your business, company, or implement modern tools and technology, are affected by the quality of HR.

 

HR plans are usually implemented and altered once a year to keep up with the rest of the company and the overall industry standards. It is highly useful in keeping the company’s goals and standards with industry developments.

 

Accounting firms in Malaysia also help companies in implementing reliable HR strategies to get the desired results.

 

This article aims to help you design and implement effective payroll and HR services so that you can get maximum benefits from them.

1. Consider Business Goals and Requirements

The HR strategies must be designed and implemented according to the company’s goals. Hence, the very first step is to ensure you consider the business goals while designing the payroll and HR services.

 

Business plans will almost certainly concentrate on generating income from outside sources, while HR strategies will consider what the company requires to achieve these objectives. Simply said, if your staff isn’t cared for, you won’t be able to do anything.

 

To establish a successful HR strategy, you must be 100 percent clear on the company objectives; employees need clarity to know what they’re working for and may feel inspired and gratified by having a clear focus.

 

Make it very clear what you expect from your employees and how they contribute to your overall objectives.

2. Importance of Collaboration

Running a successful business can be a challenging task, so you will need the help of professionals and other resources like accounting firms in Malaysia. In addition, the goal of an efficient HR department is to serve as a support system for all other departments of the organization.

 

Therefore, every part of the company should fully participate in implementing effective payroll and HR services.

Understanding The Role Of A Company Secretary In Malaysia-03

3. Compensation Model

Different types of companies can have various types of compensation models. You can rely on professional accounting services in Malaysia to decide the right kind of compensation system for your organization.

 

First and foremost, if you recruit qualified staff, you should pay them more than the average. You want to keep these employees and pay them appropriately since they will offer the greatest value to your organization.

 

Various studies prove that well-compensated employees are much more productive in the work environment.

 

Paying individuals more than the market rate has certain drawbacks. For example, it inhibits poor workers from leaving. However, if you’re constantly employing world-class performers, you’ll need to pay them more than the average to retain them.

 

This kind of compensation package might include monetary remuneration, as well as employee benefits. Market trends in your industry, as well as neighbouring disciplines, must be followed. Accounting firms in Malaysia can typically help companies keep up with these industry standards.

4. Communication

It is important for the majority of the employees to be familiar with how payroll and HR services work.

 

Company owners and managers should focus on training employees to let them know the business goals and turn them into business ambassadors to support the company’s vision.

 

It is always a good idea to design a thorough manual or a video presentation to communicate your agenda to a wide range of people in an organization.

Eight Main Roles of Human Resource-2

5. Regular Assessment

It’s critical to frequently evaluate progress to keep on track and guarantee you’re staying on track with your company objectives. Look back at how you arrived at each step and if any obstacles needed to be handled, in addition to noting what went well.

 

In this way, you will also be able to predict future challenges and implement suitable strategies to resolve them.

In Closing

The bottom line is that designing and implementing effective payroll and HR services is the result of multiple factors. You should follow the techniques discussed above to achieve good results.

 

Another reliable way of getting the best HR services is by hiring a professional accounting firm in Malaysia who’s familiar with the best HR practices and influence your entire business so that you can meet your business goals and make it a huge success in the long run.

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8 Ways to Handle a Business Audit Like a Pro

Audit concept on a computer display

8 Ways to Handle a Business Audit Like a Pro

There is no doubt that preparing for an audit can be a highly complex and challenging procedure because you have to look after many different factors.

 

However, you can make this process much easier and quicker by planning in advance and following some important strategies to handle every business audit like a pro. 

 

Generally, if you rely on a professional audit firm in Malaysia, you will be in a very good position to get through an audit.

 

However, you should also have strong internal working procedures to avoid any issues during an audit.

 

Following are the top eight ways of surviving an audit:

1. Planning

Spend more time preparing for the audit, being accessible during audit fieldwork, and communicating with everyone engaged in the audit process both before and after the year-end closure.

 

Stress and frustration may be reduced with proper preparation and clear expectations. You should treat audit preparation as an essential activity to stay ahead.

 

It will help you in cutting down the time it takes to prepare for the audit on an annual basis. Furthermore, you should also focus on keeping a channel of communication open between the business and the external auditors throughout the year.

 

As a result, there will be fewer surprises, and the organization can make the required preparations or modifications.

2. Implement Modern Accounting Standards

The audit of your company may be impacted by changing accounting standards.  Companies should keep up with the modern standards to handle or monitor data in a different manner.

 

Moreover, you also need to consider whether accounting professionals require any extra training or knowledge to apply the new standards.

 

If you outsource accounting services in Malaysia, you will not have to worry about implementing these changes yourself as professionals will handle them.

3. Scheduling

Examine the auditors’ list of work documents and schedules, clarifying any desired information as necessary.


Assign each task on the list to a dedicated individual and set a deadline for completion. Make sure you leave enough time to go through your schedule and make any required adjustments.


When feasible, start with the most difficult, complicated, or time-consuming sections. Generally, you should provide the drafts of the financial documents to the auditor early in the audit process.

How to Determine the Value of a Business-1

4. Organize Data

Create a collection of audit protocols that the right employees can access in future years.

 

To make it simpler to organize and retrieve schedules, consider establishing subfolders for major accounting cycles or groups, such as income, sales, and receivables, costs and payables, assets, capital assets, loans, and so on.

5. Self-Assessment

After all year-end closing entries have been completed, examine schedules and work papers to confirm that amounts accord or reconcile with the trial balance.

 

Self-assessment is highly important to examine the overall health of your business. Moreover, you should get help from an audit firm in Malaysia to ensure the implementation of the best accounting and audit standards.

6. Ensure Availability

Avoid booking vacation time for important workers during the audit and reschedule or postpone non-critical meetings for finance and accounting professionals who are closely engaged with the audit.

 

Although the auditors will have requested most of the schedules and work papers prior to the commencement of audit fieldwork, be aware that the auditors will continue to require more material, like any supporting financial records during an audit. 

filing tax

7. Use Past Results

Examine any previous year’s audit modifications, internal management suggestions, or difficulties observed during previous audits. These may serve as a starting point for self-reflection to guarantee that similar problems do not arise again.

 

You can also discuss such issues with professionals from an audit firm in Malaysia to bring maximum improvement to your organization.

8. Result Evaluation

You should maintain regular communication with the auditors during an audit until the final audit report is issued.

 

If the auditor wants to schedule a meeting or attend a meeting of the board of directors, you should make sure that you offer all the relevant information to the auditors to prevent any delays.

 

In a Nutshell

These are some of the most important strategies that every company should implement to get through the audits in a reliable and efficient manner.

 

As a result, companies will not run into legal issues with the authorities and can function smoothly by fulfilling the audit requirements.

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Avoid These Accounting Mistakes When Starting Your Own Business

checking accounting mistake

Avoid These Accounting Mistakes When Starting Your Own Business

Establishing and managing an entire business by yourself can be challenging as you have to look after many different factors during this process. In order to make your business successful, it is highly important to implement reliable and effective strategies for running a business smoothly. At the same time, it is important to be familiar with the common mistakes you can make while starting a business.

 

In this post, we are pleased to discuss the top accounting mistakes to avoid to ensure the short and long-term success of your business.

Mistake #1 - Starting with Lack of Capital

You should avoid starting a company in Malaysia with inadequate funding. Proper capital flow guarantees that the company runs smoothly from the beginning to the end of its journey. Nowadays, we frequently witness a variety of potential businesses go bankrupt while still in the early stages of development, which is really detrimental to the owners and the employees. 

 

One of the main causes for these failures is that business owners start and complete the Malaysian company registration process without considering their financial circumstances. Therefore, it is important to establish and follow budget constraints right from the beginning of the company.

Mistake #2 - Choosing the Wrong Type of Business

As an entrepreneur, you might have a lot of different ideas about providing certain products and services to the customers. However, if you target various types of products, it is possible that you might ignore the significance of choosing the right type of business. 

 

However, it is essential for entrepreneurs to determine what type of business interests them and what type of business they want to establish. The most crucial element for any entrepreneur or businessperson is to create what you enjoy.

 

You must know what type of product you are producing or selling and whether or not these products are appropriate or acknowledged in the environment. In most situations, business owners overlook the aspect of a product that customers like.

 

People’s preferences are a key aspect in making a profit in a company. It is not enough to design a product that is of personal interest in order to start a business. It is critical to understand that your own interests and the environment are inextricably linked.

doing accounting works at home

Mistake #3 – Setting Unrealistic Goals

It is important to aspire for company success at all times. A goal is the most important aspect of every company. The most significant thing that pushes a team to strive for success is the business’s goals; it encourages the team to establish goals, aim high, and profit.  

 

The failure to create goals can lead to a lack of consistency in a business, leading to a lack of desire to start or maintain a business. You should ensure that you set realistic and achievable goals for your business. 

Mistake #4 – Lack of Documentation

For audit reasons, taxpayers are obligated by law to save all relevant papers and information from their tax returns for seven years. These dated documents, on the other hand, are known to have gone lost for a variety of reasons, including improper handover between arriving and exiting employees, disorganized accounting, and so on.

 

When taxpayers fail to present needed supporting papers when issues are asked, the tax authorities can take strict action against the companies. Therefore, it is always a good idea to use professional accounting services in Malaysia that can create and record all types of relevant documents and financial records.

doing accounting works at home

Mistake #5 – Keeping the Same Account for Personal and Business Use

Ideally, personal bank accounts should never be used for business purposes. However, it is common among business owners, especially sole owners and self-employed, to use the same bank account for personal and business reasons.

 

This results in a lack of records of business transactions, and the accountants and auditors will find it difficult to segregate transactions while compiling financial reports for the company. It can lead to various errors in financial reporting.

In a Nutshell

These are some of the many common accounting mistakes that various businesses tend to make, especially in their first few years of starting out in the business world. The good thing is that companies have the option of hiring professional accounting firms in Malaysia.


These professionals provide reliable accounting services and help a company get through the Malaysian company registration process and also avoid various accounting mistakes and errors to ensure the success of the business.


For more information, feel free to get in touch with us.

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Sustainability Reporting Framework That Benefits Your Organization

checking Sustainability Report in office

Sustainability Reporting Framework That Benefits Your Organization

Businesses can make their working procedures and operations more sustainable by setting a set of realistic goals, assessing performance regularly, and ensuring proper management via certain policies. The first step is to determine which sustainability reporting structure will be used to get the best results.

 

The primary goal of sustainability reporting frameworks is to translate theoretical problems and goals into practical actions. By revealing both good and negative impacts on the Earth, society, and economy, sustainability reporting can assist your company in setting priorities to achieve social and environmental impact goals.

 

Therefore, in this post, we will be discussing the various sustainability reporting frameworks that can benefit your organization to a great extent. Accounting firms in Malaysia can help organizations choose a suitable framework, but it is important to be familiar with the different standards to have the essential knowledge about this critical issue. 

1. International organization for standardization (ISO)

ISO is a global non-governmental organization. Its members contain 164 national standards Group. ISO 14001 is one of the most significant standards of ISO. It deals with the international standards to establish requirements of a successful environmental management system.

 

The good thing about this standard is that it does not impose any general environmental performance standards on all types of organizations. Instead, ISO 14001 is a reliable sustainability reporting standard that a company can follow to ensure it is having a positive impact on the environment. 

2. Global reporting initiative (GRI)

GRI is one of the most respected organizations all over the world. It adopted the concept of sustainability reporting in 1997. The purpose of the GRI Sustainability Reporting Standards (GRI Standards) is to provide a reliable reporting framework to companies to reveal their positive, as well as negative impact on the economy, society, and the environment.

 

These standards contain well-researched metrics that companies can use to evaluate their performance. Unlike other frameworks, GRI Standards also focus on helping organizations navigate the sustainability reporting process. As a result, companies can also use GRI Standards to determine the key issues and address them.

 

As the name suggests, Global Standards are designed to be applied to all types of organizations in any part of the world. This is the main reason why a large number of businesses, both small and large, use GRI Standards for sustainability reporting. The indicators used by GRI are also used by various other 

sustainability reporting frameworks, so it is possible to compare their results.

wall board in office

3. Principles for responsible investments (PRI)

PRI is one of the most popular proponents of making sure investments are responsible and good for the environment. These principles evaluate the investment consequences of environmental, social, and corporate governance to provide maximum support to investors who want to consider these factors before making any investment. PRI is supported by the United Nations, which shows its credibility and significance in sustainability reporting frameworks.

 

The significance of PRI has greatly increased in the last few years because more and more consumers are also now pushing organizations to make eco-friendly decisions and investments. As a result, PRI plays an important role in encouraging investors to use their investments responsibly so that the investments lead to a better environment, society, and economy.

4. Sustainability accounting standards board (SASB)

SASB was founded in 2011 to specifically develop sustainability standards and research for investors. It is an independent nonprofit organization that wants to implement the best sustainability standards all over the world. It operates with the goal of encouraging public companies to be transparent and disclose their important information to provide relevant and credible data that can positively influence the financial decisions of investors.

 

It is one of the most comprehensive sustainability reporting standards that help companies and investors determine the financial impacts of sustainability. Generally, companies and professionals, like accounting firms in Malaysia, use SABS and GRI as a reliable framework for sustainability reporting.

 

In 2020, SASB and GRI also announced a collaboration to develop a fair, transparent, and trustful environment for the reporting companies. Such collaborations are expected to increase due to the rising significance of sustainability reporting.

writing at the Sustainability Reporting

All in All

These are the top four sustainability reporting frameworks helping organizations worldwide to meet sustainability reporting requirements. Choosing a suitable framework can vary from company to company. If you are confused between the different frameworks, you can also consider hiring accounting services in Malaysia and contacting the professionals to ensure you are making a smart decision.

 

For more information, feel free to get in touch with us.

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How Does Transfer Pricing Documentation Help Your Organization?

transfer pricing statement

How Does Transfer Pricing Documentation Help Your Organization?

Multinational enterprises have to consider many different aspects of running a successful organization due to the complexity of rules and regulations in different organizations.Creating a transfer pricing document and dealing with the transfer pricing compliance requirements is one of these major challenges because transfer pricing documentation can be a tricky concept in global filing requirements.

 

The transfer pricing rules are triggered when there are transactions between related persons or parties, one of whom has authority over the other or a third-party business.

 

In such situations, a transfer pricing document is needed to show that the multinational companies comply with the local tax regulations and also decrease the risk of double taxation.If a company does not have relevant transfer pricing documents, it can result in legal action, fines, and penalties.

 

In this post, you will get to know the various ways that transfer pricing documentation helps your organization and the best practices to adopt in this process to ensure maximum compliance.

Meet OECD Goals

A well-organized transfer pricing document is necessary to meet the following three major goals of OECD:

  1. Transfer pricing ensures that taxpayers comply with the transfer pricing requirements to establish prices and appropriate conditions for transactions between the related parties. Moreover, the transfer pricing document also reveals the income made from transactions between associated parties in the tax returns. The overall benefit of the transfer pricing documentation process is that it creates a culture of compliance in multinational organizations.
  2. Tax authorities and various administrators rely on the transfer pricing document of the companies to get necessary information about conducting transfer pricing risk assessment. As a result, the tax authorities can get a reliable summary of the activities and risks of a multinational organization and perform the necessary corrective actions.
  3. Tax authorities also use the information contained in the transfer pricing document to implement suitable auditing processes in a multinational enterprise. Such companies have to go through the audit of the transfer pricing practices of different entities, so it is important to implement the best transfer pricing documentation. If the authorities determine that there is a risk involved in the transfer pricing, the document will be used to get the overall risk assessment.
chart illustration

Reliable Strategies to Meet Transfer Pricing Documentation Requirements

The specific transfer pricing documentation requirements can vary from country to country. However, there are certain common strategies that you can use to ensure maximum compliance with transfer pricing in Malaysia, as well as other countries.

1. Proper Resource Allocation

The primary goal of creating a comprehensive transfer pricing document is to make sure you do not face disputes with the tax authorities. However, you should complete the transfer pricing documentation process without spending too much money and time on meeting the tax obligations. It is important to properly allocate the required resources and get

 

Therefore, it is a good idea for companies to outsource their audit processes to a professional audit firm so that only experienced and professional individuals work on accounting and auditing as per the industry standards.

2. Establish Industry Standards

A company’s transfer pricing documentation practices should be aligned with the requirements and expectations of the tax authorities.

 

Therefore, a company should also focus on implementing the best industry standards in the company because these standards ensure that both local and international tax authorities are satisfied with the official records being created and managed in multinational organizations.

3. Transparency

Transparency is the key to creating a reliable transfer pricing document that will be accepted by authorities all over the world. At the same time, organizations should also avoid adding unnecessary details and analysis of the business and the market because giving out too much information can also get you in trouble with the tax authorities.

 

Generally, you should be open and transparent without providing details that are not even asked by the authorities. Each word of the official reports and transfer pricing document is important because it will be part of the official record, and tax authorities can raise questions about any aspect of the business during an audit.

share chart

In Closing

The strategies discussed in this post can certainly help you in getting through the process of transfer pricing documentation and meet the legal requirements. 


However, keep in mind that ensuring maximum compliance with the transfer pricing requirements can be a highly challenging task, even for the most well-established multinational organizations.


You can make this process much easier and more efficient by relying on the experts and hiring professional services that can handle transfer pricing in Malaysia to get the best results.


For more information, feel free to get in touch with us.

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How Should Businesses Prepare for a Successful Audit?

businesswoman smelling in office

How Should Businesses Prepare for a Successful Audit?

Going through an audit can be a challenging task for all types of companies. However, you should keep in mind that audits do not have to be an overwhelming experience, especially if you are prepared for a successful audit with the help of a professional audit firm in Malaysia.

 

It is important to note that the audit experience of every company is different due to the various types and scales of businesses. Nevertheless, the purpose of this post is to thoroughly discuss how businesses should prepare to conduct successful and efficient audits to get the best results.

 

1. Get Familiar with the Audit Standards

The goal of an audit is to evaluate the company’s performance against external industry standards. Hence, it is important for you to thoroughly understand the standard you will be compared to. It will also help you to determine the approach the external auditors will take to audit your business.

 

Furthermore, the audit standards are also implemented to establish the scope of various types of audits. A typical mistake many companies make is assuming that an audit means evaluating each aspect of a business. However, generally, that is not the case because an audit can be limited to a specific department of the company as well.

2. Streamline Internal Audit Processes

It is important to establish reliable internal audit processes with the help of professionals and experts like an audit and accounting firm in Malaysia. The purpose of internal audits is to bridge the gaps that can later cause an issue for authorities.

 

Companies can save significant money and time by implementing efficient controls and taking corrective actions when an internal audit shows a discrepancy.

3. Rely on Experts

Audit and accounting measures can be quite complicated, especially for new businesses. It is difficult for business owners and managers to focus on such processes because they already have to focus on other core business activities.

 

Therefore, it is a good idea for companies to outsource their audit processes to a professional audit firm so that only experienced and professional individuals work on accounting and auditing as per the industry standards.

auditor is checking the statement

4. Create Proper Documentation

Having reliable internal audit procedures is important, but they’ll be useless if you have not created any documentation for them. In addition, there is a very high chance that the external auditors will ask for supporting documentation during the audits to examine your accounting records, policy documents, and financial statements. 

 

It is always a good idea to create a list of documents related to your business’s internal control structure and contact a reliable accounting firm in Malaysia that can help you in document creation and management. Proper documentation is the key to a successful audit, and the best documents can be created by the experts.

5. Update Accounting Standards

Audit and accounting standards change quickly, and such changes can affect your organization to a great extent. Therefore, it is important to get familiar with any new accounting standards and also track the changes being made to the accounting systems. Make sure that you implement the best industry standards to make the auditing process smoother and quicker.

 

You should also remember that any changes made to the internal accounting and audit practices should be made clear to the employees. Companies might have to hold regular training sessions to ensure all employees are working as per the best standards. It also includes correcting your past mistakes that might have been pointed out in the audits.

old businessman looking at screen.jpg

6. Be Proactive

It is important to be proactive in audits and impress the authorities by providing them with comprehensive records. You should talk to the experts and professional audit firms so that you are already familiar with the requirements and expectations of the auditors.

 

There should be complete transparency between the company and auditors to avoid unnecessary delays and get the best results.

In Closing

The bottom line is that audit planning itself can be a difficult process, but the good thing is that there are numerous modern resources and reliable audit and accounting firms in Malaysia that provide reliable guidance to get through the audits.


You can rely on the professionals because they have experience helping various types of businesses go through numerous audits. Ultimately, professional audit firms implement the best industry standards and ensure maximum compliance to help businesses get prepared for successful audits.


For more information, feel free to get in touch with us.

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Malaysia to Follow the Global Standard of Sustainability Reporting

global standard of sustainability

Malaysia to Follow the Global Standard of Sustainability Reporting

Since 2016, all of the public listed companies in Malaysia have to perform sustainability reporting according to the law. However, there is still a lot of room for improvement in this area as many organizations are not paying attention to the quality of reporting.


A major concern about sustainability reporting is that a lot of companies can’t enhance the quality due to a lack of formal standards. Furthermore, companies have to evaluate various aspects like management areas and compliance to ensure the implementation of the best sustainability reporting standards.


As a common solution to these issues, Malaysia has started to follow the global standards of sustainability reporting to ensure the effectiveness of sustainability regulations and reports, leading to better transparency and accountability.

Significance of International Standards

The need for sustainability reporting has greatly improved in the last few years. A lot of emphasis is placed on the economic, environmental, and social effects of the company standards. In order to ensure maximum transparency, the implementation of international standards is essential.

 

Moreover, stakeholders in companies are now paying more attention to how enterprises impact the economy, nature, and community and how companies respond to sustainability problems and financial difficulties that affect their long-term survival and profitability.

Managing Material Sustainability

Material sustainability management should be suitable for purpose and, when feasible, connected with current organizational techniques and procedures, as well as international standards.

Organization rules and strategies typically govern decisions that affect the entire organization.

However, it is extremely important to use international standards and systems to resolve sustainability-related issues and create a well-organized report.

Attract More Customers

Implementing international sustainability standards will ultimately improve the quality of sustainability reporting and help companies in Malaysia to bring global leaders in sustainability. It can even take the companies to new heights of success.

As the importance of sustainability grows, a company that recognizes the potential and has the capacity to innovate will be able to expand through new goods, services, and consumers. In addition, the launch of sustainable products and services might help the company carve out a unique market.

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Risk Management by Following Global Standards

Global standards pay special attention to risk management and the relationship between risk management and sustainability reporting. Accounting firms in Malaysia can also help organizations to follow these standards and enhance the quality of their sustainability reporting practices. Some of the ways in which risk management becomes easier are:

a. Mitigate Sustainability-Related Risks

Businesses are becoming increasingly vulnerable to environmental and social changes, such as population expansion, climate change, harsh weather, or strikes resulting from hazardous working conditions, which can result in losses or expenses (e.g. disruptions to production).

As a result, if an organization recognizes and manages sustainability-related risks early on, it will be better positioned to prevent and mitigate the costs associated with these risks. In addition, non-financial hazards are increasingly being recognized by businesses as having a direct or indirect financial impact.

b. Minimizing the Cost of Capital

Investors prefer companies that exhibit effective risk management and sustainability reporting practices because it increases business value and reduces risk, leading to a lower cost of capital. This is because risk premiums are added to financing cost for companies with dubious environmental or social policies.

c. Better Productivity

Implementing global standards of sustainability reporting provides a unique opportunity to the employees to enhance their ability to hire and retain the best people in the company. It will lead to a significant increase in employees’ loyalty and better productivity.

Furthermore, better branding and recognition will lead to more value in demand in the future.

However, it is crucial for organizations to focus on the risks associated with every aspect of a business, like sourcing raw material, energy usage, water usage, and many other factors that have to be discussed in sustainability reporting.

Global Standard of Sustainability Reporting

In Closing

There is no doubt that sustainability reporting is the need of the hour. Stakeholders, investors, consumers, and the general public expect companies to follow reliable standards and provide sustainable products and services.

 

Such standards bring much-needed transparency and uniformity in the process of sustainability reporting.

 

The good thing is that once a company decides to fully follow these standards, the process to implement these standards can become quite easy by starting from the top.

 

There are many authorities and resources available to facilitate companies in understanding and implementing the best standards of sustainability reporting.

 

Moreover, companies can also get help from professional accounting firms in Malaysia to ensure maximum productivity.

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How Does Sustainability Benefit an Organization?

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How Does Sustainability Benefit an Organization?

The significance of sustainability reporting has greatly increased in the last few years because more and more consumers are now looking for organizations, products, and services that positively impact society.


Moreover, international laws are also making it compulsory for companies to have maximum transparency about sustainability reporting.


It is important for the corporate world to fulfil the rising demand for sustainable products and services and reduce energy usage and other such resources.

Accounting services in Malaysia are also available to help the companies comply with the international standards of sustainability reporting.


In this post, you will learn about the numerous benefits of sustainability reporting for organizations:

Benefits of Sustainability Reporting

The purpose of a sustainability report is to provide thorough information about an organization’s overall social, environmental, and economic performance.

 

It is also useful in determining whether the company is meeting its goals for human development. A reliable and well-organized sustainability report is highly beneficial in convincing investors and stakeholders about the significance of the organization.

 

In this era, everyone is talking about climate change and how it is adversely affecting the planet. A sustainability report provides an opportunity for companies to tell how they can tackle climate issues and implement sustainable services.

 

The following benefits of sustainability reporting further enhance the significance of eco-friendly and sustainable practices:

1. Motivates Employees

When the employees know that they are working in a company that is conscious of the environment and the community, it gives them a sense of pride and encouragement to keep working for the betterment of the firm.

 

It also helps organizations in building loyalty among the staff. However, you should also keep in mind that the overall quality and content of the sustainability report also matter a lot.

Therefore, companies should hire professional accounting services in Malaysia for this purpose so that a well-organized report is created by professionals.

2. Credibility

Meeting sustainability goals and contributing back to society significantly boosts the popularity and credibility of the companies. Nowadays, the public is very quick to bring attention to sustainability issues on social media platforms.

Therefore, companies that implement sustainable practices can expect to enjoy publicity and a positive image.

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3. Sustainability Leader

Organizations that make the extra effort to resolve environmental issues are called sustainability leaders in the corporate sector. It is also increasing their public recognition.

It shows that implementing sustainable practices and releasing a sustainability report is not only helpful in contributing back to society but also attracts more people.

A competent organization focuses on understanding the various nuances of environmental issues. As a result, companies should comply with the standards to become a reputable name in the corporate sector.

4. Attracts Investors

Stakeholder trust is strengthened through credible sustainability reporting. Sustainability licenses and recognitions are granted to organizations that provide sustainability statistics. This improves a company’s image.


Investors increasingly demand companies provide a sustainability report that details their efforts. Different parties and investors can recognize a company’s actual worth. It also provides them with an overview of the company’s extrinsic and intrinsic assets.

5. Use Sustainability as a Business Opportunity

Similar to a yearly monetary report, a sustainability report assists a company in identifying cost reductions. It stresses the relationship between the company’s non-financial and financial success.

 

The report’s release has an impact on corporate policy, business strategies, and long-term management strategy. Processes are optimized, which improves the efficiency of the business.

The sustainability report assists in benchmarking performance in terms of regulations, quality standards, cooperative efforts, conventions, standards, and compliance requirements.

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6. Better Risk Management

It’s worth noting that risk and sustainability are often considered simultaneously because sustainability, in broad, strategic terms, refers to achieving company resilience, as well as a chance to improve communication and trust.

Sustainability influences a company’s future operational environment and brand reputation while also enhancing its durability and efficacy.

Furthermore, sustainability reporting has become an important tool for better visibility, with modern businesses increasingly experiencing environmental and social risks, which emerge over a longer time, are largely outside the company’s control, and often impact the firm on different dimensions, in addition to standard risks.

All In All

All of these various benefits of sustainability reporting make it clear that companies have a lot to gain by focusing on sustainable practices. They can also contact accounting services in Malaysia to get help in complying with the rules and regulations related to sustainable reporting.

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