In Singapore, a company qualifies for audit exemption in singapore if it meets at least two of three criteria: annual revenue not exceeding S$10 million, total assets not exceeding S$10 million, and no more than 50 employees. These thresholds apply under the “small company” framework introduced by ACRA. Exempt companies still need to maintain proper financial records but are not required to undergo a statutory audit.
If you are running a private limited company in Singapore, knowing your audit requirement in Singapore is more than simply ensuring compliance – it is a practical choice which impacts your time, cost and administrative workload each financial year. This checklist walks you through what you really need to check, document and confirm before assuming your company qualifies.
What Is Audit Exemption in Singapore?
The Companies Act (Cap. 50) of Singapore was amended in 2014 to introduce the concept of “small company” and allow qualifying private companies to opt out of a statutory audit. Prior to this change, all companies incorporated in Singapore had to audit their accounts annually irrespective of size.
Those that qualify as a small company can file unaudited financial statements, saving time and audit fees, which can be a few thousand dollars to tens of thousands of dollars depending on the complexity of the company.
Eligibility Checklist: Do You Qualify as a Small Company?
A company is a small company under Section 205B of the Companies Act if it is a private company and satisfies at least two of the following three quantitative criteria for the immediately preceding two consecutive financial years:
| Criterion | Threshold | Your Company’s Status |
|---|---|---|
| Annual Revenue | Not more than S$10 million | ☐ Met / ☐ Not Met |
| Total Assets | Not more than S$10 million | ☐ Met / ☐ Not Met |
| Number of Employees | Not more than 50 | ☐ Met / ☐ Not Met |
You must meet at least two out of three criteria. Meeting only one does not qualify your company for exemption.
Checklist Item 1 — Confirm Your Company Is a Private Limited Company
Audit exemption is only available to private companies. If your company is a public company or a subsidiary of a public company then you are not eligible, regardless of your size. Find out the type of your company by checking your company constitution and ACRA BizFile+ registration.
Checklist Item 2 — Review Two Consecutive Financial Years of Data
The small business qualification is not based on one year. You need to meet the criteria for the last two consecutive financial years. A newly incorporated company qualifies if it meets the criterion in its first financial year.
Checklist Item 3 — Check If You Are Part of a Group
This is where a lot of business owners get caught up. If your company is part of a group, it also needs to qualify as a “small group.” A group is small if it satisfies at least two of the three criteria on a consolidated basis for the two most recent financial years. The holding company together with all of its subsidiaries must be private companies.
Records and Documentation Checklist
Qualifying for audit exemption does not mean you can relax your record-keeping. Under the Companies Act, all companies — including exempt ones — must maintain proper accounting records for at least five years.
Use this documentation checklist before each financial year-end:
- General ledger and trial balance up to date
- Bank statements reconciled for all accounts
- Accounts receivable and payable schedules prepared
- Fixed asset register maintained and depreciation calculated
- CPF contributions and payroll records filed correctly
- GST returns filed (if GST-registered)
- Directors’ resolutions and meeting minutes filed
- Unaudited financial statements prepared in accordance with Singapore Financial Reporting Standards (SFRS)
If it applies, your financials still need to be in compliance with SFRS for Small Entities even if you don’t have an auditor reviewing your accounts. Messy books can cause problems with tax assessments, bank loan applications or if ACRA flags your company for review.
Annual Compliance Checklist for Exempt Companies
Audit exemption removes one obligation, but it does not eliminate your annual compliance requirements. Here is what still applies:
Filing with ACRA
- Hold Annual General Meeting (AGM) within six months of financial year-end (or pass a resolution to dispense with AGM for private companies)
- File Annual Return with ACRA within seven months of financial year-end
- Attach unaudited financial statements to the Annual Return
Filing with IRAS
- Submit Estimated Chargeable Income (ECI) within three months of financial year-end
- File corporate income tax return (Form C-S or Form C) by 30 November each year
- Ensure tax computation aligns with your unaudited accounts
When You Lose Audit Exemption Status
Exemption is not forever. If your company fails to meet at least two of the three criteria for two consecutive financial years, it will cease to be a small company. Once you cross the thresholds you are then required to have a statutory audit from the next financial year.
Watch these situations closely:
- Revenue grows past S$10 million due to a major contract win
- A merger or acquisition brings employee headcount above 50
- Your company becomes part of a group that does not qualify as a small group
Common Mistakes Singapore Business Owners Make
Audit exemption is straightforward in theory. In practice, errors are common. Here are the ones that come up repeatedly:
Assuming exemption continues automatically. You need to re-evaluate eligibility every financial year. Many owners assume once exempt, always exempt. That is not how the rule works.
Overlooking the group company rule. Subsidiaries of holding companies often forget to check their group’s consolidated figures. Individual qualification is not enough if you are part of a non-qualifying group.
Submitting incomplete financial statements. Unaudited statements still need to include a profit and loss account, balance sheet, and notes to the accounts. Incomplete submissions can result in ACRA penalties.
Missing the Annual Return deadline. ACRA imposes late filing penalties. In Singapore, private companies that file late face fines starting from S$300 and can escalate depending on the delay period.
Should You Still Consider Voluntary Audit?
Some companies decide to be audited even when they are legally exempt. This is sensible if you are seeking external financing from banks, are preparing for a sale or merger, are onboarding institutional investors or if your company has complex transactions that benefit from third-party verification.
A voluntary audit adds credibility to your financials and can give you an advantage in negotiations or due diligence. It’s worth talking to your corporate secretary or accountant about whether the cost is justified in your situation.
If you’re a Singapore business owner looking for expert guidance to make sense of these requirements, Tn Corporate Management Pte Ltd offers corporate secretarial and accounting services that help companies stay compliant — whether you’re eligible for audit exemption or need to prepare for a statutory audit.
Frequently Asked Questions
Q1: What are the criteria for audit exemption in Singapore?
A company in Singapore is exempt from audit if it is a private company and satisfies at least two out of three criteria, namely, annual revenue not exceeding S$10 million, total assets not exceeding S$10 million, and a headcount of no more than 50 employees, over two consecutive financial years.
Q2: Does audit exemption apply to all Singapore companies?
No. The exemption from audit only applies to private companies that qualify as a “small company” under the Companies Act. The exemption is not available to public companies, companies limited by guarantee or subsidiaries of non-qualifying groups no matter the size of such entities.
Q3: What is the audit requirement in Singapore for companies that do not qualify?
Non-small companies are required to have a statutory audit performed by a registered public accountant each year. The audited financial statements are to be presented to shareholders and filed with ACRA as part of the Annual Return filing.
Q4: Can a newly incorporated company in Singapore claim audit exemption?
A newly incorporated company can be exempt from audit if it meets two or more of the three small company criteria in its first financial year. It doesn’t require two years of data consecutively because at the first evaluation there is no financial history.
