Audit Exemption-FOZL - International Accounting & Advisory Firm

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Audit Exemption

The following companies are exempted from financial statement audits if they meet the specific requirements of the Singapore Companies Act. However, they are still required to prepare financial statements (and consolidated financial statements, if applicable) that comply with the Companies Act and IFRS. In order to reduce the institutional burden on small companies and to move towards a risk-based regime, the concept of small companies and their exemption from audit requirements were introduced in amendments to the Companies Act.

The new audit exemption regime applies to Singapore companies incorporated after 1 July 2015 or with a financial year later than 1 July 2015. Under the new regulations, a company is defined as a “small company” and is exempt from audit if it meets the following conditions:

a) was a private company during the financial year, and
b) For the previous two financial years, at least two of the following three conditions have been met:
1. Total annual turnover of less than S$10 million.
2. Total assets of less than S$10 million
3. Fewer than 50 employees

In the case of companies belonging to a group of companies:

a) The company must meet the requirements of a “small company”.

b) The entire group of companies must be a “small group company” (a “small group company” must likewise meet any two of the three conditions in the definition of “small company”) in order to meet the audit exemption requirement.

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