In Singapore, every registered company is required to file financial statements and have their statements and accounting records officially audited every year, unless they are exempted from audit. Companies who need to comply with auditing standards must use a public accountant registered with the Accounting and Corporate Regulatory Authority (ACRA) in order to for the audits to be approved – and so companies often choose between either a top-tier, mid-tier or small audit firm to do their audits, depending on their business needs.
Singapore’s push to support its vibrant business landscape and nurture the growth of more Small and Medium Enterprises (SMEs) brought about a change in the Companies Act on 1 July 2015, allowing small companies to be exempted from auditing under certain criteria. Before the change took place, only exempt private companies with yearly revenue of not exceeding S$5 million were exempted from auditing.
The small company audit exemption is more inclusive of a wider group of company stakeholders, like customers, employees and creditors, who are interested in the company’s financial statements – and, best of all, reduces compliance costs for these smaller companies. This means that if your company meets the criteria for a small company in Singapore, you will save the time and money that is required for audits!
If your company is a private company in that financial year, it qualifies as a small company if it meets at least two of the three criteria for the immediate past two consecutive years:
If your company meets the criteria of being a small company but is part of a group, the entire group must be considered a ‘small group’ in order for your company to qualify for audit exemption. For a group to be considered a ‘small group’, it has to meet at least two of the three criteria for the immediate preceding two consecutive years:
As long as your business meets these criteria, your small company will be exempted from audits. If you have trouble determining whether or not your company qualifies for audit exemption because of more complicated issues, you might consider consulting an audit firm in Singapore to help you to determine your eligibility so that you are not guilty of an offence and/or not liable to a fine for not complying with the statutory requirements!
Whether or not your company is exempt from audit requirements, you still have to comply with other ongoing statutory requirements like filing financial statements, keeping proper accounting records, and be prepared for shareholders who hold 5% or more of voting rights to request for audited accounts. Regular spot-checks by ACRA will still be conducted on your financial statements, and in the event that your company is caught up with any legal issues, ACRA will also appoint an auditor to audit your company.
In any case, your company should be prepared with accurate financial statements and accounting books – either your employees should be equipped with the knowledge to carry out the accounting and bookkeeping procedures, or you can outsource to a reliable audit firm in Singapore who can take care of your compliance tasks for you with experience and expertise. Apart from helping you to comply with auditing standards, audit firms help you to achieve accuracy in your financial statements that help with confident and precise decision-making for your company in the long run!
Not sure if your company is exempt from auditing in Singapore, or simply need expert auditing services for your business? Nexia TS is a leading audit firm in Singapore with 27 years of experience in assurance and business services for small and medium enterprises. Get in touch with us to achieve workable solutions for your company, here.
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