Voluntary Audits in Singapore: Why More SMEs Are Choosing Proactive Compliance
In Singapore, financial audits are typically associated with statutory requirements — where companies are legally obligated to undergo an audit based on revenue or asset thresholds. However, a growing number of small and medium-sized enterprises (SMEs) are now choosing to conduct voluntary audits, even when not legally required.
This strategic move goes beyond compliance — it strengthens credibility, builds investor trust, and prepares businesses for future growth.
In this article, we explore the key reasons why voluntary audits are on the rise among SMEs in Singapore, and how they can add tangible value to your business.
What Is a Voluntary Audit?
A voluntary audit is a financial statement audit initiated by a company even though it is not mandated under the Singapore Companies Act. These are typically undertaken by companies that:
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Do not exceed the small company exemption criteria
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Operate in industries where financial transparency is valued
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Are preparing for significant changes such as investment, expansion, or sale
Who Qualifies for Audit Exemption in Singapore?
Under the Companies Act, a private company qualifies as a small company and is exempt from audit if it meets at least two out of the following three criteria for the past two financial years:
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Total revenue ≤ SGD 10 million
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Total assets ≤ SGD 10 million
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Number of employees ≤ 50
Even if exempted, many SMEs still opt for an audit — and for good reason.
Why SMEs Choose Voluntary Audits in Singapore
1. Enhancing Credibility with Banks and Investors
Voluntarily audited financial statements provide greater assurance to banks, investors, and government agencies. When applying for loans, grants, or seeking equity funding, having independently verified financials strengthens your standing.
2. Grant Application Readiness
Many government grants in Singapore, such as the Enterprise Development Grant (EDG) and Market Readiness Assistance (MRA), require applicants to submit audited or well-maintained financial statements. A voluntary audit ensures your company is grant-ready — with no last-minute financial scrambling.
3. Improving Internal Controls and Governance
An audit is not just about numbers — it often uncovers internal control weaknesses or accounting gaps that management may not be aware of. Voluntary audits help SMEs tighten processes, improve governance, and reduce the risk of fraud or regulatory breaches.
4. Preparing for Business Expansion or Exit
Whether you’re planning to expand into overseas markets, onboard new shareholders, or eventually sell the business, clean and audited accounts are critical. Buyers and partners often demand historical audited financials during valuation or due diligence stages.
5. Meeting Shareholder or Investor Expectations
In some cases, minority shareholders or external investors may require an audit as part of the shareholder agreement, even if the company is exempt. Voluntary audits foster transparency and reduce potential disputes among stakeholders.
Voluntary vs. Statutory Audits: What’s the Difference?
A voluntary audit is initiated by choice, whereas a statutory audit is a legal requirement for companies that exceed the audit exemption thresholds. The scope of a statutory audit is fully governed by financial reporting standards, while a voluntary audit may offer more flexibility, though it still adheres to professional audit guidelines. Importantly, both provide assurance — but a voluntary audit reflects proactive business management rather than regulatory obligation.
When Should You Consider a Voluntary Audit?
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Your SME is applying for grants that require audited statements
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You’re preparing for an investment round or loan application
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You plan to expand overseas or enter into joint ventures
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You’re reviewing your company’s internal controls or processes
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Your investors or shareholders request greater transparency
How USAFE Supports Voluntary Audits
At USAFE, we understand the strategic value of voluntary audits. Our team works closely with SMEs to:
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Conduct independent audits aligned with ACRA and IRAS standards
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Identify internal control weaknesses and suggest improvements
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Prepare financial statements for funding, grant, or M&A purposes
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Advise on audit-readiness and documentation best practices
We also provide proactive support beyond the audit itself — helping SMEs build sustainable compliance and reporting structures.
Final Thoughts: Voluntary Audit as a Strategic Investment
Choosing to undergo a voluntary audit demonstrates maturity, forward planning, and financial transparency. In today’s business landscape, these traits are increasingly important for credibility and growth.
If your business is aiming to expand, raise funds, or access government support, a voluntary audit can be the foundation of trust and readiness.
Thinking of doing a voluntary audit?
Talk to the team at USAFE to explore how an independent audit can strengthen your business and support your next strategic milestone.
Disclaimer: This article is for informational purposes only and does not constitute any professional advice. Feel free to contact us to consult with our professional advisors team for personalized advice and guidance.
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