Auditing Services in Singapore

Businesses establishing a company in Singapore need to conduct an audit report if the company has annual revenue or assets of over 10 million SGD. Therefore, auditing services become a useful tool to help businesses optimize management processes, fully meeting the legal requirements of the Singapore government.

In the article below, GLA will share:

• Regulations, requirements and standards on auditing for Singapore companies.
• The importance of auditing Singapore company financial statements. 

1. What is auditing service?

Auditing is the professional examination of a business's financial information, records, and processes. Typically performed by qualified auditors, auditing helps businesses maintain accuracy and compliance with regulations, while providing assurance to entrepreneurs and investors that the business is viable.

What is statutory audit in Singapore?

For Enterprises, it is mandatory to appoint an auditor within 3 months from the date of registration or Singapore company registration. Enterprises are exempted from audit according to regulations s205B and 205C of the company law exempt from audit requirements.

Under the Companies Act in Singapore, companies are required to undergo an annual audit. The audit must be conducted by the Accounting and Corporate Regulatory Authority of Singapore (Accounting and Corporate Regulatory Authority (“ACRA”)). The audit must ensure independence and compliance with Singapore Standards on Auditing (SSAs).

Financial report must be duly audited at least 14 days prior to presentation at the annual meeting of shareholders.

In the case of audited financial statements less than 14 days unless the audit notice is received before the company at the annual shareholders' meeting less than 14 days. As required by this section and the audit report as required must be attached or certified on those financial statements.

GLA provides auditing services including:

• Compliance audit.
• Internal audit.
• Financial statement audit.

2. Auditing regulations in Singapore

Not all companies in Singapore are required to conduct year-end audits. Therefore, businesses need to first understand the audit process issued by the Accounting and Corporate Regulatory Authority of Singapore (ACRA).

Under the Companies Act (Amendment Phase 1) 2014 which came into effect on 01 July 07, the Accounting and Corporate Regulatory Authority of Singapore (ACRA) has issued new regulations for companies exempted from audit.

2.1 What is the concept of small company when talking about Singapore auditing?

“Small company” is a new concept issued by ACRA (Accounting and Corporate Regulatory Authority of Singapore) to consider as an audit-exempt company. It also replaces the regulation on audit-exempt companies with a turnover of less than S$5 million per annum and no more than 20 shareholders and no legal entity.

If a business meets the conditions of a “small company”, it will be considered for audit exemption, to help small businesses reduce the burden of annual audit costs.

2.2 What types of companies in Singapore are exempted from audit under the new ACRA regulations?

Companies (with fiscal year from 01/07/2015 onwards) are considered Exemption from audit if meeting the conditions of being a small company down here:

• The company must be a private company with a fiscal year from 01/07/2015
• Achieve 2 out of 3 conditions in 2 fiscal years
  • Total annual turnover below S$10 million.
  • Total assets under S$10 million.
  • Total company employees under 50 people.

For a group company to be considered a small company. The following conditions must be met: 

• The company must qualify as a small company from an independent perspective.
• The group should be considered a small group: meeting 2 out of 3 criteria on a consolidated basis for 2 consecutive years:
  • Total annual turnover below S$10 million.
  • Total assets under S$10 million.
  • Total company employees under 50 people.

An inactive company will be exempted from audit if:

• inactive since inception.
• It has been inactive since the end of the previous financial year.

For companies established before July 01, 07:

If companies meet the criteria to become small companies in fiscal year 2015 or fiscal year 2016, they will be exempted from audit.

3. Auditing standards in Singapore

The conduct of audits and the standards for auditors are specifically prescribed in the Singapore Standards on Auditing (SSAs).

In addition, auditors need to comply with accounting standards to ensure that financial statements are presented fully, reasonably and in accordance with regulations.

Doing business in Singapore requires strict adherence to specific accounting standards, issued by the Singapore Accounting Standards Council (ASC). The two main standards include:

• Singapore Financial Reporting Standards (SFRS): Based on the core principles of International Financial Reporting Standards (IFRS). This is the official standard for the majority of Enterprises in Singapore, ensuring transparency and uniformity in the presentation of financial information.
• Singapore Financial Reporting Standards for Small Entities (SFRS for Small Entities): Structure based on IFRS for SMEs.
• This standard provides simpler regulations, suitable for smaller-sized Enterprises, helping to reduce the burden of complying with accounting regulations.

The choice of SFRS or SFRS for SMEs depends on the size, type and operating status of each Enterprise. However, both standards aim at the common goal of ensuring the truthfulness, fairness and comparability of financial information, contributing to promoting a transparent and trustworthy business environment in Singapore.

With a team of auditors with many years of professional experience, GLA is confident in providing Singaporean businesses with the best support in choosing auditing standards in Singapore.

4. Why is auditing important?

Auditing plays an important role in improving the quality and reliability of a company's financial disclosure to investors, because:

• Ensure transparency of data and compliance with bookkeeping and reporting in accordance with international accounting standards (IFRS) or Singapore accounting standards (SFRS).
• Detect loopholes and errors in accounting records.
• Quickly detect new issues related to fraudulent data, financial reporting, money laundering (if any) and assess potential risks and risks of material misstatement.
• Auditor's reports bring many benefits to businesses such as improving the reliability of financial data and financial statements. Ensuring that financial statements are presented honestly and fairly, detecting material errors based on the auditor's assessment of evidence collected through the audit process.

Therefore, auditing is an important activity for all businesses and organizations, not only large businesses but also small and medium enterprises. Contact GLA for advice and support on high-quality Singapore corporate auditing services, helping businesses and organizations achieve their business goals.

5. How does GLA support businesses in the process of auditing Singapore companies?

GLA has been working with some of the leading auditing firms in Singapore for many years. Therefore, depending on the needs of the Enterprise, GLA will recommend a suitable auditing firm - depending on the size and complexity of the Enterprise.

Understanding businesses' concerns in accounting and auditing, GLA provides monthly or annual accounting services Singapore, Nominee Director Services in Singapore and other related services to support corporate auditing activities in Singapore, including:

• Advise on auditing regulations in Singapore, including standards on auditing (SSAs), regulations of the Securities and Exchange Commission of Singapore (MAS), etc.
• Review the company's books, accounts and financial situation, then recommend a suitable audit partner to help the business save costs and still deliver quality results.
• Help businesses prepare audit documents, including financial reports, documents, accounting books, etc.
• Answering businesses' questions about the auditing process, helping businesses better understand the process and coordinate better with auditors.

In addition, GLA also provides other support services to Singapore Enterprises during the audit process, including: tax and business accounting consulting, Audit related tax issues, including determination of taxable income, tax deductions, etc. of Singapore Companies

With the support of GLA, Singapore businesses can rest assured that their audit will be conducted professionally and efficiently, helping them achieve their business goals.

6. Frequently asked questions about corporate auditing services in Singapore?

Highlights

• Singapore companies are required to conduct annual audits for companies with annual turnover or corporate assets of over SGD 10 million. 
• Financial statements of Singapore audited companies must comply with international and Singapore financial reporting and auditing standards.
• GLA supports the implementation of Singapore company financial reports to ensure compliance with regulations and financial report auditing requirements.