{"id":13010,"date":"2025-02-10T13:53:11","date_gmt":"2025-02-10T05:53:11","guid":{"rendered":"https:\/\/dollarsandsense.sg\/business\/?p=13010"},"modified":"2025-02-10T13:53:11","modified_gmt":"2025-02-10T05:53:11","slug":"why-do-some-companies-require-audit-in-singapore-while-others-dont","status":"publish","type":"post","link":"https:\/\/dollarsandsense.sg\/business\/why-do-some-companies-require-audit-in-singapore-while-others-dont\/","title":{"rendered":"Why Do Some Companies Require Audit In Singapore While Others Don\u2019t?"},"content":{"rendered":"\n

Singapore is globally-renowned for its ease of doing business and light-touch regulation when it comes to letting businesses grow.<\/p>\n\n\n\n

Many large global businesses set up regional headquarters in the city-state to take advantage of its skilled workforce, geographical location, and favourable regulatory policies. The same also applies to businesses of all sizes.<\/p>\n\n\n\n

Yet while it\u2019s common practice worldwide for large businesses to be audited on an annual \u2013 or even quarterly \u2013 basis, the same might not be true for small businesses. 
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So, in Singapore, why is it the case that some companies require audits and others don\u2019t? <\/p>\n\n\n\n

Read Also: Guide To Corporate Tax Rates Around The World<\/a><\/em><\/strong><\/p>\n\n\n\n

Small Companies In Singapore Exempt<\/strong><\/h3>\n\n\n\n

First, we should establish what an audit is. An audit is the official inspection of a company\u2019s accounts and it\u2019s typically done by an independent body to ensure impartiality and proper verification of recordkeeping.<\/p>\n\n\n\n

In Singapore, only public accountants or accounting firms registered and approved by the Accounting and Corporate Regulatory Authority (ACRA) are eligible to carry out company audits.<\/p>\n\n\n\n

However, there is one exception to this rule and that\u2019s small companies. Indeed, ACRA implemented this exception in an official exemption that applied for financial years after the change in law (1 July 2015). This was part of the Companies (Amendment) Act of 2014.<\/p>\n\n\n\n

The act was passed to help encourage smaller companies to prosper and not be weighed down by audit expectations \u2013 which can sometimes overwhelm smaller companies who may not have the resources, such as industry knowledge or manpower, to carry out a full audit.\u00a0<\/p>\n\n\n\n

Read Also: Singapore Companies Act: What Business Owners Need To Know When Starting A Company<\/a><\/em><\/strong><\/p>\n\n\n\n

Key Changes To Audit Exemption<\/strong><\/h3>\n\n\n\n

Prior to 1 July 2015, a company was exempted from having its accounts audited if it was an exempt private company with annual revenue of S$5 million or less.<\/p>\n\n\n\n

However, that was replaced by a new \u201csmall company\u201d concept that determines exemption from statutory audit. The key changes includes the fact that a company no longer needed to be an exempt private company to be exempted from audit.<\/p>\n\n\n\n

A small company, therefore, qualifies as such if it:<\/p>\n\n\n\n