Co-operatives registered under the Co-operative Societies Act 1993 (Akta Koperasi 1993) sit outside the Companies Act 2016 audit regime that applies to Sdn Bhd and Bhd companies. Instead, co-operative audit is governed by its own statutory framework, administered by Suruhanjaya Koperasi Malaysia (SKM), the Malaysian Co-operative Societies Commission. Because SKM sets both the audit requirement and the Annual General Meeting (AGM) timeline, the two run on a linked clock: the audit has to be substantially complete before the AGM can properly be held.
This guide sets out the statutory audit requirement, who may be appointed as a co-operative's external auditor, how the audit fits into the AGM timeline, what a Board is expected to submit to SKM, and some pitfalls that recur in practice. It reflects the Co-operative Societies Act 1993, the Co-operative Societies Regulations 2010 (Peraturan-Peraturan Koperasi 2010), and SKM's published garis panduan (guidelines), including GP14 (AGM management) and GP26 (approved auditors), current as at the date below.
The statutory audit requirement under the Co-operative Societies Act 1993
Section 60(1) of the Act requires every registered co-operative to have its accounts audited at least once in each financial year, either by an auditor approved by SKM under section 61, or by an SKM officer. In practice, the great majority of co-operatives engage an approved external auditor rather than relying on an SKM-conducted audit.
Section 63 sets out what the auditor is statutorily required to do when auditing a co-operative's accounts. In summary, the auditor must:
- examine and audit the co-operative's accounts and relevant records;
- report to SKM and to the co-operative on any irregularity disclosed by the examination and audit;
- audit and report on the financial statements submitted by the co-operative after the close of the financial year;
- state whether, in the auditor's opinion, the financial statements give a true and fair view of the co-operative's financial transactions and state of affairs, and report any other matter the auditor considers should be reported;
- report whether proper accounting and other records have been kept, and whether receipts, expenditure, investments, and the acquisition and disposal of assets during the year comply with the Act, the regulations, and the co-operative's by-laws; and
- where relevant, examine and report on outstanding debts and on the valuation of the co-operative's assets and liabilities.
An auditor is expected to plan and perform the audit in accordance with applicable auditing standards and to obtain reasonable assurance that the financial statements are free from material misstatement, whether from error or fraud. Non-compliance with section 63 is an offence: on conviction, an auditor is liable to a fine not exceeding RM200,000, imprisonment not exceeding one year, or both. This is a materially different (and, on the maximum fine, higher) exposure than the equivalent obligations under the Companies Act 2016, which is one reason co-operative audit engagement letters and working papers need to be built around the Act 502 framework specifically, not adapted casually from a company audit template.
It is worth distinguishing the external audit under section 60/61 from the co-operative's own Internal Audit Committee (Jawatankuasa Audit Dalaman, JAD), which is a separate requirement under section 42A of the Act. The Board must establish a JAD of not less than three and not more than five members, and the co-operative's by-laws (commonly by-law 57) typically require the JAD to review the co-operative's accounting records at intervals of not more than three months and to report irregularities to the Board without delay. The JAD does not replace the external audit — the two functions are complementary, and SKM's GP27 (governance guideline) expects both to operate as part of the co-operative's governance structure.
Who may audit a co-operative, and how auditors are appointed
Only an auditor approved by SKM under section 61(1)(a) of the Act may be engaged to audit a co-operative's accounts (alongside the SKM-officer route under section 60(1)(b), which is not typically the co-operative's choice to make). SKM's current guideline on this, GP26 (effective 1 September 2024, issued under section 86B), sets out the eligibility criteria and the categories of approval.
To be approved as a co-operative auditor, an individual must, among other requirements set out in GP26:
- be a Malaysian citizen or permanent resident;
- hold a valid membership certificate and practising certificate from the Malaysian Institute of Accountants (MIA) or the Institute of Cooperative & Management Auditors (ICMA);
- be registered with the Audit Oversight Board (AOB) where applicable;
- have at least three years' audit experience in Malaysia;
- not have been convicted or compounded for an offence under the Act, the Companies Act 2016, or any offence involving fraud or dishonesty; not be an undischarged bankrupt; and be free of pending disciplinary action by MIA, ICMA, or AOB.
Approval is granted for one year at a time, with renewal applications due at least 60 days before the current approval expires. GP26 also sets four categories of approved auditor (A to D), which determine the type and number of co-operatives an auditor may take on, based on whether the auditor is AOB-registered, MIA- or ICMA-qualified, and whether the firm has a branch office meeting SKM's staffing threshold. A further safeguard in GP26 limits an approved auditor to no more than six consecutive years auditing the same co-operative, with a two-year cooling-off period before the auditor may resume that co-operative's audit — a rotation rule that goes further than the equivalent expectation for many other Malaysian audit engagements.
The appointment itself is a decision for the co-operative's members, not the Board alone. Co-operative by-laws typically require the AGM to approve a panel of not fewer than two SKM-approved auditors from which the Board selects the auditor for the year (reflecting Regulation 14(1)(h) of the Co-operative Societies Regulations 2010 and the equivalent by-law provision). Once appointed, the auditor must submit a copy of the letter of appointment to SKM's relevant state branch, and that letter of appointment should set out the audit objective, scope, the respective responsibilities of the co-operative and the auditor, the reports to be issued, and the appointment period and audit fee.
How the audit fits into the AGM timeline
The AGM cycle for a Malaysian co-operative runs on statutory deadlines that place the audit squarely on the critical path.
AGM deadline. A co-operative's Annual General Meeting (or, where the co-operative uses a representative AGM structure, the annual representative meeting) must be held not later than six months after the close of its financial year, as set out in the co-operative's by-laws made under the Act. This is the anchor date that every other deadline works backwards from.
Audit turnaround. Regulation 29(6) of the Co-operative Societies Regulations 2010 requires the audit to be completed within two months of the auditor receiving the co-operative's financial statements. The auditor must then submit the signed audit report and management letter, on the firm's official letterhead, no later than 30 days after completing the audit. In practice, this means the co-operative's bookkeeping and draft financial statements need to reach the auditor with enough runway before the AGM date to allow for the two-month audit window plus the 30-day reporting window, on top of the notice periods below.
Circulation before the AGM. Under section 59 of the Act, the audited financial statements must be tabled at the AGM. The financial report must be sent to members at least 15 days, and to SKM at least 30 days, before the AGM. SKM's GP14 (AGM management guideline) reinforces this: the annual report book — which must include the audited financial statements, the Board's statutory report, and the Internal Audit Committee's report — together with the AGM notice, must reach members at least 15 days before the meeting, and a copy of the notice must be sent to SKM under section 41 of the Act.
Working backwards. Put together, a co-operative with a 31 December financial year end and a target AGM in June needs its accounting records substantially finalised well before year end plus two months, so the auditor has the full audit window, the 30-day audit reporting window, and the 15/30-day pre-AGM circulation windows all inside the six-month statutory ceiling. Co-operatives that leave bookkeeping until close to year end routinely find there is not enough runway left for a properly conducted audit before the AGM deadline — a scheduling problem, not usually an audit-quality problem, but one that falls on the Board to manage.
Submission to SKM
Several submissions to SKM sit around the AGM and audit cycle:
- the audited financial report, at least 30 days before the AGM (section 59(2));
- a copy of the AGM notice, under section 41 of the Act;
- a list of Board members elected or re-elected at the AGM, not later than 15 days after the AGM, under paragraph 14(1)(a) of the Act;
- the AGM minutes, verified by the co-operative's minutes verification committee, not later than 30 days after the AGM, under paragraph 14(1)(b) of the Act; and
- the auditor's own update of the audited co-operative's status in SKM's online auditor system, under section 85A(1), which the auditor (not the co-operative) is responsible for.
Where SKM's review of the audited accounts identifies a matter with a financial effect, section 59(2A) requires the co-operative to adjust for it and disclose it clearly in the following year's audited accounts, with the Board reporting on those adjustments in its statutory report under section 59(3)(g). This is a distinctive feature of the co-operative regime: SKM's observations on one year's audited accounts can flow through into next year's statutory reporting obligations, which is a reason to close out any SKM correspondence promptly rather than let it carry over unresolved.
Common pitfalls
Appointing an unapproved or lapsed auditor. SKM's approval of an auditor lasts one year and must be renewed; a co-operative that continues with an auditor whose SKM approval has lapsed, or that fails to have the AGM approve a panel of at least two SKM-approved auditors as required by the by-laws, creates an appointment problem that surfaces only when the audited accounts are queried.
Leaving bookkeeping too late. Because the audit clock (Regulation 29(6)) only starts once the auditor actually receives the financial statements, a co-operative that delivers late-prepared or incomplete records compresses its own runway to the AGM deadline. This is the most frequent cause of AGMs being rescheduled or of co-operatives seeking SKM's consent to a later meeting.
Treating the Internal Audit Committee as optional or inactive. The JAD's quarterly review function under the by-laws is a Board governance requirement in its own right, separate from the external audit, and SKM's GP27 governance guideline expects the two functions to work together, not for one to substitute for the other.
Missing the post-AGM submission windows. The 15-day (Board list) and 30-day (minutes) submission deadlines after the AGM are easy to overlook once the meeting itself is over, but they are separate statutory obligations under paragraph 14(1) of the Act.
Assuming a company-audit approach transfers directly. Co-operative audit sits under a different Act, different regulator, different auditor-approval regime, and a different offence and penalty structure to a Companies Act 2016 audit. Firms and preparers who only work with company audits can miss co-operative-specific requirements such as the SKM auditor-panel approval, the six-year rotation limit, or the section 59(2A) carry-forward adjustment mechanism.
How Saifudin & Co helps
Saifudin & Co (SNCO) is a Malaysian chartered accounting firm registered with the Malaysian Institute of Accountants. Alongside our audit work for companies under the Companies Act 2016, our team has experience conducting audits for co-operative societies under the Co-operative Societies Act 1993, working within SKM's audit and AGM framework described above.
For co-operative Boards and Internal Audit Committees, we support the audit and AGM cycle by planning the audit around the co-operative's financial year end and AGM date, preparing audited financial statements and the auditor's report in the form required under section 63 of the Act, and helping the Board keep track of the SKM submission deadlines that sit around the AGM. For audit engagements, we maintain independence in accordance with the MIA By-Laws (On Professional Ethics, Conduct and Practice).
If your co-operative's financial year end is approaching and you would like to discuss the audit and AGM timeline, request a consultation with our audit and assurance team.
Last updated: July 2026
Sources: Co-operative Societies Act 1993 (Akta Koperasi 1993) [Act 502]; Co-operative Societies Regulations 2010 (Peraturan-Peraturan Koperasi 2010); Suruhanjaya Koperasi Malaysia, GP14: Garis Panduan Pengurusan Mesyuarat Agung Tahunan Koperasi; Suruhanjaya Koperasi Malaysia, GP26: Garis Panduan Juruaudit Yang Diberi Kelulusan Mengaudit Di Bawah Seksyen 61 Akta Koperasi 1993 (issued 1 September 2024); skm.gov.my — Garis Panduan.