When the audit of business account is done by?
A private limited company is the most suitable form of business structure in Singapore. It provides benefits such as limited liability, tax savings, and simple compliance obligations. The Companies Act in Singapore has recently introduced the concept of “small company” that exempts private limited companies that fulfill certain criteria from the requirement of the annual audit. This helps the company reduce its compliance costs as well as its overall regulatory burden. In this article we explain the private limited company audit requirements for Singapore. Show
The New Audit Exemption Criteria in SingaporeThe Singapore Companies Act states that every company must get its financial statements and accounting records audited by an auditor on an annual basis unless the company meets the Singapore audit exemption requirement. The Companies Act was amended in 2014 to update the audit exemption criteria for companies and introduced the concept of a “small company”. A company that qualifies as a small company is not required to appoint an auditor and have its accounts audited. The Amended Act was made effective starting from July 1, 2015. A company is considered to be a small company if it fulfils at least two out of the following three conditions:
Besides private companies, group companies (holding and subsidiary companies) can also avail the Singapore audit exemption if they qualify as a small group per the criteria described below. Private Limited Company Audit Requirement DiagramGroup Company Audit RequirementA group company is defined as a holding company and its subsidiaries that together form a group due to a common source of control. A group company will be exempt from the annual audit of its accounts if the holding and all subsidiary companies individually:
To qualify as a “small group”, the group (comprising of all the companies) must fulfil two out of the following three conditions in the immediate two preceding financial years:
In other words, this means that to qualify for the audit exemption criteria, the individual subsidiary companies as well as the holding company, as a group, must fulfil the eligibility criteria of a small company. Have questions? Need a consultation? Easy incorporation without any surprisesI'd always heard that company set up in Singapore was easy but I didn't expect it to be that easy. The team at CorporateServices.com made it all come together without any surprises; from the initial quote to checking of paperwork to actual incorporation, they managed it all with finesse. The icing on the cake was their prompt and professional assistance for opening the corporate bank account. Change in Company Audit StatusOnce a company acquires the “small company” status, it continues to enjoy the audit exemption benefit unless the company is disqualified. Disqualification of a company occurs if the company:
Read our survey: Is Singapore the right place to operate your business? Prior Criteria for Audit ExemptionPrior to the Amendment Act 2014, an Exempt Private Company with an annual turnover less than or equal to S$ 5 Million was exempt from having its accounts audited. An Exempt Private Company is a company that has less than 20 shareholders and no corporate shareholders. Pursuant to the 2014 Amendment, the criteria has changed. Now, any company defined as a “small company” will be eligible for audit exemption. Frequently Asked Questions and AnswersIf my company is exempt from audit, am I still required to prepare and file my annual accounts? Yes, you are still required to prepare and file your unaudited annual financial statements. Among other things, your company's annual financial statements are the main basis for calculating and preparing your corporate tax return. The only difference is that if your company is exempt from audit, you are not required to appoint an audit firm and get your accounts officially audited. My company qualifies as a small company and therefore exempt from audit requirement. Can you handle the bookkeeping and tax filing for my business? We offer the full spectrum of accounting and tax filings services regardless if your company is exempt from audit or not. When an audit is required, we will liaise with the appointed audit firm to get the audit completed in an efficient and stress-free manner for you. Contact us today if you need help or need to register a company in Singapore. Transitional ProvisionsA company incorporated before the changes in the Act can also avail the audit exemption if the company fulfils two out of the three qualifying criteria of a small company. Specifically, a company incorporated before July 1, 2015 can qualify as a small company if:
The following table explains the transitional provisions:
The transitional provisions are applicable only for the first two years from the change in this law. SummaryThe amendment to audit exemption criteria further simplifies the compliance obligations for small companies. More companies including subsidiaries of foreign companies that meet the 'small company' definition will not be eligible for the audit exemption. Singapore is a very attractive choice for setting up a base for your business. The country promotes some of the best business-friendly policies in the world making it easy to plant roots for your business and thrive. It is a world-class economy full of opportunities for people with innovative ideas and the drive to create a successful business. Why SingaporeRecently, CorporateServices.com conducted a survey of startup founders from five countries. To assess global sentiment about Singapore’s attractiveness as a startup location, the survey assessed Singapore on metrics considered important by entrepreneurs. Read our report for more details.
Who can audit a business?An external audit is performed by a third party, like an insurance company, local tax agency, or the IRS. External auditors must follow auditing standards known as generally accepted auditing standards (GAAS).
Who audits the account of the company?Pursuant to Section 19(1) of Comptroller and Auditor-General's Duties, Powers and Conditions of Service Act, 1971, audit of the accounts of Government companies is conducted by the Comptroller and Auditor General (C&AG) in accordance with the provisions of the Companies Act, 1956, the Auditor (Chartered Accountant) of ...
When should an audit be conducted?Audits should usually be scheduled at least once per year and should cover all of the activities you undertake – especially if they are relevant to your Management System. Depending on the process being audited, it may be necessary to change this frequency.
Who is responsible for audited financial statements?. 03 The financial statements are management's responsibility. The auditor's responsibility is to express an opinion on the financial statements.
|