An audit is the examination of records held by an individual, business, organisation or government entity by a third party, to ensure that records are true and accurate. In Singapore, all companies must have their financial statements audited on a regular basis (unless exempted) to check for discrepancies or misstatements and ensure that all company finances are handled responsibly. These statements include records regarding investment returns, income or profit, expenses and other relevant financial information. In this article, we share the essential requirements and process for conducting an audit for your company in Singapore:
Does my company have to be audited?
All companies in Singapore have to be audited regularly unless they are exempted from an audit by the Small Company or Small Group criteria. You can read more about audit exemption in Singapore in our blog, ‘Audit Exemption for Companies in Singapore’, to check if your company can be exempted from audit.
Appointing a company auditor
Companies have to appoint a company auditor within three months of incorporation in Singapore unless they are exempted from audit requirements, and for audits to be approved, only public accountants or accounting firms registered with the Accounting and Corporate Regulatory Authority (ACRA) are able to conduct these audits.
After the auditor has been appointed, they will remain in office until the conclusion of the company’s upcoming Annual General Meeting (AGM). This means that if your company is newly incorporated, the auditor will remain in office until your company’s first AGM, upon which you will have to appoint a new auditor or reappoint the same auditor. This newly appointed auditor will then hold office from the conclusion of the current AGM until the conclusion company’s subsequent AGM, and so on and so forth.
Annual General Meetings are to be held once every year, either within four months from the company’s Financial Year-End (FYE) for public listed companies or within six months from the company’s FYE for any other companies. The FYE of a company is to be determined upon incorporation and is commonly chosen to fall on 31 March, 30 June, 30 September or 31 December, depending on which chosen date will allow the company to receive better tax incentives.
In short, your company should determine a Financial Year-End upon incorporation, which will then decide the date of the company’s Annual General Meeting. An auditor should also be appointed within three months from the date of incorporation; after which, your company will either have to reappoint or newly appoint the auditor during the company’s next AGM.
Presenting audit reports
Every year, during the company’s AGM, the directors of the company are required to lay the company’s financial statements and other relevant documents before the shareholders, including:
The role of the auditor is to evaluate these financial statements, ensure that the company is compliant with the Financial Reporting Standards of Singapore, and report on whether the company’s financial statements provide a true and fair view of the company’s performance. The auditor’s independent audit reports should be attached to or endorsed upon these financial statements and be presented together during the company’s AGM.
Benefits of Auditing
Apart from fulfilling compliance requirements, audits help a company to provide reliable information to investors and shareholders to earn trust and drive business decisions. Regular audits also present insightful and timely views to directors, allowing them to make smart and informed decisions for the company, driving the company’s financial growth. Engage a trusted audit firm in Singapore to do more than just comply with statutory requirements but give valuable headway to your business.
Nexia TS is a leading accounting firm in Singapore that uses a robust auditing process to add value to your business. Through trusted assurance of your financial statements, control and reporting, we increase the confidence of investors and spur profit-driven growth for your company. Get in touch with us to engage our best assurance and auditing services, today.
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