What is audit exemption in Singapore?
Private companies that qualify as “small companies” are exempt from statutory audit under the Singapore Companies Act.
This means:
– No requirement to appoint an auditor
– No requirement to prepare audited financial statements
– Financial statements must still be prepared in accordance with SFRS/FRS
Small Company Test
A private company qualifies if it meets at least 2 out of the following 3 criteria:
– Annual revenue ≤ S$10 million
– Total assets ≤ S$10 million
– Number of employees ≤ 50
Group Companies
If part of a group:
– The individual company must qualify
– The entire group must qualify on a consolidated basis
Two-Year Rule
If a company fails the test for 2 consecutive years, audit becomes mandatory from the third year.
Practical Examples
Example 1: Typical SME – Audit Exempt
Revenue: S$3.2m | Assets: S$2.1m | Employees: 18
Example 2: Startup with Funding – Audit Exempt
Revenue: S$900k | Assets: S$12m | Employees: 14
Example 3: Fast-Growing Company – Audit Required
Revenue: S$12m | Assets: S$11m | Employees: 38
Example 4: Subsidiary of Large Group – Audit Required
SG entity small but group exceeds thresholds
Voluntary Audit
Even if exempt, audits may be required by banks, investors, or grant authorities.