Audit Exemption in Singapore: Audit Requirements, Eligibility & Small Company Criteria

Audit exemption in Singapore allows eligible private companies to avoid a statutory audit of their financial statements. Small companies may qualify based on their annual revenue, total assets and number of employees.

However, not every business is exempt. Larger private companies, public companies and certain companies within a group may still need an audit. The audit requirement in Singapore depends on the company’s size, type, financial position and group structure.

Understanding these rules helps businesses stay compliant and manage audit costs. It also reduces the risk of missed obligations or reporting delays. Since revenue, assets, employee numbers and business structures can change, companies should review their audit eligibility each year and prepare early if an audit is required.

What Is Audit Exemption in Singapore?

An audit exemption means a company does not need a formal external review of its accounts. The Singapore Companies Act grants this relief to qualifying small businesses.

To claim this exemption, a firm must meet specific financial limits. It must also have unanimous agreement from all shareholders. Audit requirement in Singapore still applies to larger companies or those with dissenting owners.

Audit Requirements in Singapore

A statutory audit in Singapore is an independent review of a company’s financial statements by an appointed auditor. It provides greater confidence that the financial information is properly reported. A statutory audit checks a company’s financial statements and helps ensure they meet Singapore’s reporting requirements.

Which Companies Require an Audit?

Not every company can claim audit exemption in Singapore. Companies that do not meet the exemption criteria generally need to have their financial statements audited.

• Larger private companies that do not qualify as small companies
• Public companies, unless another exemption applies
• Certain regulated companies with specific audit obligations
• Group companies that fail to meet the required exemption criteria

Which Companies May Qualify for Audit Exemption?

Private companies may qualify for the small company audit exemption if they meet the required conditions. Under the ACRA audit exemption criteria, they generally need to meet at least two of these three size tests:

• Annual revenue of S$10 million or less
• Total assets of S$10 million or less
• 50 or fewer employees

Companies within a group must also consider the relevant small group criteria when checking their eligibility.

Why Check Audit Requirements Each Year?

A company’s audit status can change as the business grows or its structure changes. Reviewing audit eligibility in Singapore each year helps identify new obligations before financial reporting begins.

• Revenue or total assets may increase
• Employee numbers may change
• Group structure or ownership may change
• The company may no longer meet the exemption criteria

An annual review helps businesses stay compliant, plan for audit costs and avoid delays in financial reporting.

Small Company Criteria for Audit Exemption

To qualify as a small company, a business must:

• Be a private company throughout the financial year.
• Meet at least two of the following criteria for the past two consecutive financial years:

– Annual revenue of S$10 million or less

– Total assets of S$10 million or less

– No more than 50 employees

If a company meets these conditions, it can benefit from audit exemption, reducing compliance costs and allowing a smoother financial reporting process.

Group Company Audit Exemption Criteria

If a holding company or subsidiary is part of a group, the entire group must qualify as a small group to be exempt from audits. A group qualifies as a small group if, for the past two consecutive years, it meets at least two of the following criteria:

• Consolidated revenue of S$10 million or less
• Consolidated total assets of S$10 million or less
• Total number of employees across the group is 50 or fewer

Each company within the group must qualify individually and collectively. If the group exceeds these limits, an audit is required for financial transparency.

Audit Requirements for Different Types of Companies

The audit requirement in Singapore varies based on a company’s type, size and structure. Some companies may qualify for an exemption, while others need a statutory audit.

Small Private Company

A small private company may qualify for audit exemption in Singapore if it meets the required eligibility criteria. An audit exempt company in Singapore should consider at least two of the three small company size tests.

Large Private Company

A large private company that does not meet the small company criteria generally requires a statutory audit. Companies should review their financial figures each year as the business grows.

Public Company

Public companies generally require a statutory audit in Singapore, as the small company exemption applies to private companies. Other exemptions may apply in specific circumstances.

Subsidiary

A subsidiary must consider both its own position and its wider group when checking audit eligibility. Both must meet the relevant criteria for the small company exemption to apply.

Dormant Company

A dormant company may qualify for a separate audit exemption if it meets the required conditions. However, dormant status does not automatically remove all accounting and reporting duties.

Audit Exemption vs Statutory Audit

Audit exemption in Singapore and statutory audit have different requirements, costs and business benefits. The table below shows the key differences and what they may mean for a company.