Audit Exemption For Singapore Private Limited Companies 2021

January 12, 2021
|In Taxes and Accounting
|By Kevin Yeo

Legislated in Singapore Companies Act, before filing with the Accounting and Corporate Regulatory Authority (ACRA), all private limited companies in Singapore are to prepare their annual financial statements and audit them. However, in certain cases, you can get an audit exemption.

In 2015, the Small Company Concept was legislated. It stipulates that if the private limited company fulfils certain conditions, the company can have an exemption from its accounts being audited.

To qualify as a small company, the private limited company must:

  1. Be a private company in that particular financial year; and
  2. Must meet at least 2 out of the 3 following conditions for the immediate past 2 financial years consecutively:
    1. For total annual revenue, to be not more than S$10 million.
    2. In terms of total assets, not more than S$10 million.
    3. No more than 50 employees in the company.

You will need to fulfil these in order to qualify for an audit exemption if the company is part of a group (i.e. subsidiary or holding company):

  1. The entire ‘group’ of companies must be a ‘small group’;
  2. The company must qualify as a small company.

To qualify as a small group, it must satisfy 2 out of the 3 quantitative conditions, on a consolidated basis for the immediate past two financial years consecutively. If the group has a total of five (5) companies, all of them can exempt themselves from the audit when they satisfy the said conditions.

During a financial year, once the small company is no longer a private company at any point in time, or does not meet 2 out of the 3 quantitative conditions for the past two immediate financial years consecutively, it does not qualify. Henceforth, the company must get an auditor to audit its financial statements.

Do not confuse yourself on audit exemption with filing annual accounts or returns. Exemption from an audit is not the same as exemption from filing annual accounts. Your company still need to prepare and file its unaudited annual financial statements.

If you need assistance with your bookkeeping and tax filing? Talk to us today.

 

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