In Singapore, the directors of the company are required to appoint an auditor within 3 months of its incorporation unless it is exempted from audit.
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Who are the Approved Auditors?
The accounting firms or public accountants must be registered and approved by the Accounting and Corporate Regulatory Authority (ACRA) before they can be appointed to audit the company’s financial statements. The auditors are responsible to conduct the audit in accordance with the Singapore Standards on Auditing (SSA) and other regulations to provide an audit opinion on the financial statements.
The shareholders of the company shall review, approve the auditors’ report and decide if they would like to re-appoint the auditors during the Annual General Meeting (AGM).
Audit Exemption Criteria
From July 1st 2015, a Singapore company can be exempted from having its accounts being audited if it qualifies as a small company.
A company is considered small if it fulfills the following conditions:
• It is a private company all through the financial year (i.e., a limited liability company in which the shares are held by less than 50 persons and are not available to the general public)
• It meets at least two of three following criteria for immediate past two consecutive financial years:
1. Total annual revenue of not more than SGD 10 million
2. Total assets of not more than SGD 10 million
3. Number of employees of not more than 50
Additionally, if a small company is part of a group, then all its entities (including foreign ones) must fulfill the above thresholds on a consolidated basis in order to benefit from the exemption.
Please note that if a company is not private anymore, then it cannot be exempted from audit for the current financial year.
Newly Incorporated Companies
A newly incorporated company can be considered a small company if it is private and meets the aforementioned conditions in its first or second financial year-end after incorporation.
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