Audit Requirement – Singapore

Audit Requirement – Singapore
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In Singapore, companies are generally required to undergo an annual audit of their financial statements. The audit requirement is outlined in the Companies Act and is enforced by the Accounting and Corporate Regulatory Authority (ACRA). Here are the key points regarding the audit requirement for companies in Singapore:

### 1. **Audit Exemption Criteria:**

1. **Small Companies:**
– Small companies are exempt from the statutory audit requirement. To qualify as a small company, a company must meet at least two of the following criteria:
– Total annual revenue not exceeding SGD 10 million.
– Total assets not exceeding SGD 10 million.
– Employ an average of fewer than 50 employees.

2. **Dormant Companies:**
– Dormant companies (those that have not commenced any business activity) are exempt from audit requirements.

### 2. **Statutory Audit for Other Companies:**

1. **Requirement:**
– Companies that do not meet the criteria for audit exemption are required to appoint an auditor to conduct a statutory audit of their financial statements.

2. **Timing:**
– The audit must be conducted annually, and the audited financial statements must be presented at the company’s annual general meeting (AGM).

### 3. **Appointment of Auditors:**

1. **AGM Appointment:**
– Auditors are appointed at the AGM by the shareholders of the company.

2. **ACRA Approval:**
– ACRA must approve the appointment of auditors within three months of the company’s AGM.

3. **Rotation of Auditors:**
– Public companies and certain private companies may be subject to auditor rotation requirements.

### 4. **Audit Report:**

1. **Audit Findings:**
– The auditor prepares an audit report that includes their opinion on the fairness of the company’s financial statements.

2. **Submission to ACRA:**
– The audited financial statements, together with the auditor’s report, must be filed with ACRA within one month from the date of the AGM.

### 5. **Penalties for Non-Compliance:**

1. **Late Filing Penalties:**
– Failure to file the audited financial statements within the specified timeframe may result in penalties.

2. **Deregistration:**
– ACRA has the authority to deregister companies that do not comply with the filing requirements.

### 6. **Exemptions for Certain Companies:**

1. **Exemption Application:**
– Certain private companies may apply to ACRA for exemptions from specific requirements, including the filing of financial statements.

2. **Criteria:**
– ACRA assesses exemption applications based on criteria such as solvency, total assets, and number of shareholders.

### 7. **Professional Advice:**

1. **Consultation:**
– Companies should seek professional advice to determine their specific audit requirements and eligibility for exemptions.

2. **Compliance Assistance:**
– Professional auditors and accounting firms can assist companies in meeting their compliance obligations and provide guidance on audit-related matters.

### Important Note:

Regulatory requirements and criteria for audit exemption may be subject to changes, and it’s essential for companies to refer to the latest information provided by ACRA or seek professional advice for accurate and up-to-date guidance.

This information is based on regulations as of my knowledge cutoff in January 2022, and there may have been changes since then. Always refer to the latest guidelines and regulations provided by relevant authorities for the most accurate and current information.

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