In Singapore, certain types of companies are exempted from having their accounts audited. This is known as the audit exemption. This exemption is designed to reduce regulatory costs for smaller companies.
As per the Companies Act, small companies are exempted from having their accounts audited. To qualify as a small company, a company must fulfill at least two of the following criteria for the immediate past two consecutive financial years:
- Total annual revenue of not more than SGD 10 million.
- Total assets of not more than SGD 10 million.
- No more than 50 employees.
In addition to individual small companies, a group of companies can also be considered a small group and thus qualify for audit exemption if it meets the above criteria on a consolidated basis for the past two consecutive financial years.
However, it’s important to note that even if a company is exempt from audit, it is still required to keep proper books of accounts and records. These records should be able to show and explain the company’s transactions, disclose with reasonable accuracy the financial position of the company, and enable preparation of true and fair financial statements.
Also, while exempt from audits, these companies must still prepare unaudited financial statements, also known as director’s reports, for annual general meetings and for filing annual returns.
Please consult with a local accounting or audit firm to fully understand the audit requirements and whether your company qualifies for the audit exemption.