What is an audit exemption?↓

Companies that are exempted from audit requirements are not required to have their accounts audited. Instead, they prepare unaudited accounts (also known as a compilation report) for purposes of annual general meetings (AGMs) and filing with ACRA as well as Inland Revenue Authority of Singapore (IRAS). If the Company chooses to have the accounts audited, it will then submit the audited accounts together with the auditor’s report.

What types of companies are exempted from audit?↓

With effect from 1 July 2015, a new small company concept was introduced for exemption from statutory audit. A company qualifies as a small company if it is a private company and meets at least 2 of 3 of the following criteria for immediate past 2 financial years:

(a) Total annual revenue of not more than S$10 million;

(b) Total assets of not more than S$10 million;

(c) Number of employees not more than 50.

For a company which is part of a group:

The company must qualify as a small company; and Entire group must be a “small group” to qualify for the audit exemption. For a group to be a small group, it must meet at least 2 of the 3 quantitative criteria on a consolidated basis for the immediate past two consecutive financial years.

Where a company has qualified as a small company, it continues to be a small company for subsequent financial years until it is disqualified. A small company is disqualified if:

(a) it ceases to be a private company at any time during a financial year; or

(b) it does not meet at least 2 of the 3 the quantitative criteria for the immediate past two consecutive financial years.

Where a group has qualified as a small group, it continues to be a small group for subsequent financial years until it does not meet at least 2 of the 3 the past two consecutive financial years.