What is a statutory audit?
A licensed auditor examines the financial statements under auditing standards and gives an opinion on whether they present fairly, in all material respects, the financial position and results under the financial reporting standards that apply to the entity. The auditor’s report is a required part of the financial-statement filing with the DBD.
Partnerships and other entity types may be subject to different rules — please check your case with the MMN team.
- MMN audits non-listed companies — for example SMEs, family businesses and group subsidiaries.
- Audits of listed companies, or of companies applying to list, must be performed by an SEC-approved auditor. In those cases MMN works with partner audit firms and can support the company as its IPO-readiness advisor.
- An auditor must be independent under the professional code of ethics. MMN applies the applicable independence prohibitions and evaluates threats and safeguards; services are not combined where prohibited or where threats cannot be reduced to an acceptable level.
Companies that need financial statements people can rely on
SMEs & family businesses
Limited companies that want an annual auditor who understands the business, communicates clearly and plans the work around the shareholders’ meeting deadline.
Foreign-owned companies & group subsidiaries
Companies that report to shareholders or a parent company and need audited financial statements on schedule.
Foreign company guide →Growing companies
Companies that use audited financial statements with banks, investors or regulators and want to raise the quality of their accounting information.
Growth Accounting →How MMN can help
Annual statutory audit
An audit and opinion on the annual financial statements by a licensed auditor, for the shareholders’ meeting and the DBD filing.
Interim reviews
Reviews of interim financial statements when shareholders, a parent company or other users need reviewed information.
Agreed-upon procedures
Specific procedures on an agreed scope — for example particular transactions or balances where users want extra comfort.
Internal control observations
Where applicable, a summary of internal control observations noted during the audit, with recommendations management can act on.
Internal audit →From planning to the auditor’s report
Planning
Understand the business and its risks, set the audit approach, and agree the timetable and document list.
Fieldwork
Test transactions and balances, send confirmations and attend stock counts where relevant.
Findings & discussion
Discuss proposed adjustments and observations with management before reporting, so there are no surprises.
Reporting
Issue the auditor’s report, ready for the shareholders’ meeting and the DBD filing, with a management letter on internal-control observations where applicable.
Documents that keep the audit moving
The list below is a general example; the MMN team will send a list tailored to your business at the planning stage.
- Trial balance and general ledger at the year-end
- Bank statements and bank reconciliations
- Fixed-asset register and depreciation schedules
- Receivable, payable and inventory listings, including count results
- Key contracts, meeting minutes and the company affidavit
- Tax returns filed during the year, such as PP.30, PND.1, PND.3, PND.53 and PND.51
From year-end to filing
Close the books & count
Close the year, count inventory and assets, and prepare the agreed documents.
Shareholders approve the statements
Audited financial statements must go to the shareholders’ meeting for approval within 4 months of the year-end, so the audit should be finished before then.
File PND.50
File the annual corporate income tax return within 150 days of the year-end.
File with the DBD
File the financial statements with the DBD within 1 month of the date the shareholders’ meeting approves them.
Frequently asked questions
Does every limited company need its financial statements audited?
Yes. A limited company’s annual financial statements must be audited, with an opinion, by a licensed auditor before they are approved by the shareholders’ meeting and filed with the DBD. Partnerships and other entity types may be subject to different rules — please check your case with the MMN team.
How long does an audit take?
It depends on the size and complexity of the business and how ready the accounting records are. Plan before the year-end so the audit can be completed ahead of the shareholders’ meeting, which must be held within 4 months of the year-end.
Can MMN audit a listed company or a company preparing to list?
MMN audits non-listed companies. Audits of listed companies, and of the financial statements used for a listing application, must be performed by an SEC-approved auditor — in those cases MMN works with partner audit firms and can support the company as its IPO-readiness advisor.
Can MMN both keep our books and audit them?
An auditor must be independent under the professional code of ethics. MMN applies the applicable independence prohibitions and evaluates threats and safeguards; services are not combined where prohibited or where threats cannot be reduced to an acceptable level.
Plan this year’s audit now
Tell us about your business, your year-end and your shareholders’ meeting date, and we will help plan an audit that finishes on time.
Book a meetingThis page is general information for education only — not professional advice for any specific case. Laws and deadlines may change; please check the current requirements with the DBD and the Revenue Department, or consult MMN before acting.