A statutory audit refers to a type of external audit usually conducted annually to meet a specific set of regulations set by the legislation. As the name suggests, statutory audit is compulsory for every company in Singapore unless it is exempted after fulfilling certain criteria.
In Singapore, Accounting and Corporate Regulatory Authority (ACRA) is the authority that oversees the laws and regulations of companies. The process of statutory audit involves examination of all financial data and book of accounts of an organization to ensure their credibility and prevent any misstatement or discrepancies.
Legal Requirements of Statutory Audit in Singapore
In Singapore, it is compulsory for all companies to appoint an auditor within 3 months of their incorporation unless they are exempted from the audit process.
Being exempted from the statutory audit only applies for companies that fall under the category of “Small Company” or “Small Group”.
Small Company Audit Requirements
According to the Singapore Company’s Act, corporations that qualify for the “small company” category must be private companies in the current financial year.
Furthermore, they must meet at least two of the following three criteria within the last two consecutive financial years:
- Total annual revenue of SGD$10 million or less;
- Total assets of SGD$10 million or less; or
- 50 employees or less.
Tianlong Services can help you incorporate a new company or switch your existing Singapore Company today at an affordable cost.
Group Company Audit Requirements
A group company refers to a holding company in addition to its subsidiaries that together form a group due to a common source of control.
According to the Singapore Company’s Act, all corporations that are part of a “small group” must qualify as “small companies” and meet at least two of the three quantitative criteria within the last two consecutive financial years.
A group company will be exempt from the annual audit of its accounts if the holding and all subsidiary companies individually:
- Fulfil at least two of the small company qualifying conditions and
- Belong to a “small group”
To qualify as a “small group”, all the companies the group must fulfil two out of the following three conditions within the last two consecutive financial years:
- Total annual consolidated revenue of SGD$ 10 million or less;
- Total annual consolidated assets of SGD$ 10 million or less;
- The total number of employees of 50 or less.
Change in Company Audit Status
Companies that qualify for the “small company” category usually maintain their characteristic for subsequent financial years until they are disqualified.
When it comes to disqualification, the following criteria must be met by the small company:
- It stops being a private company in the course of a financial year; or
- It fails to meet at least two of the three quantitative criteria within the last two consecutive financial years.
For a group that has qualified for the “small group” category, they usually maintain this characteristic for subsequent financial years until they fail to meet at least two of the three quantitative criteria within the last two consecutive financial years.
Nuts and Bolts for Audit Exempt Companies
Filing Unaudited Annual Financial Statements
It is important to note that even if your company is exempt from statutory audit, you are still required to prepare and file unaudited annual financial statements. The annual financial statements helps to compute and prepare the corporate tax returns of your company. The only difference is that when your company is exempt from audit, you don’t need to appoint an auditor within 3 months of incorporation and your accounts do not undergo official auditing.
Bookkeeping and Tax Filing
If your company qualifies as a “small company” and is exempt from statutory audit, you still have to take care of bookkeeping responsibilities and file your taxes on time. Tianlong Services provides wide-ranging services pertaining to accounting and tax filing irrespective of your exemption status of statutory audit in Singapore. However, if you need audit services in the process, our expert bookkeepers and auditors will act as a go-between with your appointed audit firm to complete the audit efficiently for you.
Why Consider Our Flawless Statutory Audit Services
It is essential to hire a professional firm to handle the nitty gritties of statutory audit for your business. Tianlong Services Pte Ltd has the capacity to review all the financial records of your company since we have experienced auditors who can meticulously check if all prepared documents are in accordance with the Singapore Financial Reporting Standards (SFRS).
Besides sorting out any misrepresentations, misstatements, errors, or discrepancies, the following reasons expound on why you need to hire our statutory auditing services:
- Our high-quality system reflects up-to-date auditing standards for firms in Singapore;
- Our professional team of auditors thrives in increasing your business efficiency;
- We prepare compliant audit reports as per Singapore’s Financial Reporting Standards;
- We offer valuable assistance in monitoring your business ethics to increase overall financial performance.
- Our statutory audit services focus both on examining your financial statements and streamlining your business operations.
Contact us today!