What are audit obligations for companies in Singapore?

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.

• Who are the Approved Auditors?
• Audit Exemption Criteria
• Singapore Standards on Auditing

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.

Singapore Standards on Auditing

The Singapore Standards on Auditing (SSAs) are crucial guidelines established by the Accounting Standards Council (ASC) and the Institute of Singapore Chartered Accountants (ISCA). These standards provide auditors with a comprehensive framework for conducting audits of high quality, ensuring consistency, reliability, and transparency throughout the auditing process.

Covering various aspects such as risk assessment, audit planning, evidence gathering, materiality, and reporting requirements, the SSAs closely align with international auditing standards. This alignment reinforces Singapore’s standing as a dependable financial hub and facilitates seamless cross-border investments.

Adherence to the SSAs is enforced through routine quality control reviews and inspections, promoting ongoing enhancement and preserving the integrity of financial reporting.

The SSAs serve as a cornerstone for the auditing profession, offering clear guidance and best practices for conducting thorough and effective audits.

By adhering to these standards, auditors play a pivotal role in maintaining a robust auditing environment that safeguards stakeholders’ interests and instills confidence in Singapore’s business community. The SSAs underscore Singapore’s dedication to maintaining high auditing standards and provide auditors with a solid framework for conducting audits with professional diligence, ensuring the trustworthiness and credibility of financial statements.