Understanding Audit Exemption Criteria in Singapore
Effective Date: The audit exemption applies to financial years starting from July 1, 2015, onwards.
Qualification Criteria
Previously, companies were exempted from audit if they were exempt private companies with annual revenue of $5 million or less. However, a new criterion is being introduced, known as the small company concept. Under this concept, companies no longer need to be exempt private companies to qualify for audit exemption.
A company qualifies as a small company if:
(a) it is a private company in the financial year in question; and
(b) it meets at least 2 out of 3 of the following criteria for the immediate past two consecutive financial years:
- total annual revenue ≤ $10 million;
- total assets ≤ $10 million;
- number of employees ≤ 50.
For companies within a “Group“:
(a) the company must qualify as a small company; and
(b) the entire group must be considered a “small group” to qualify for audit exemption.
To be classified as a small group, the group must meet at least 2 out of the 3 quantitative criteria on a consolidated basis for the immediate past two consecutive financial years.
Once qualified as a small company or small group, the status continues until the company or group is disqualified. Disqualification occurs if:
(a) the company ceases to be a private company at any time during a financial year; or
(b) the company fails to meet at least 2 out of 3 quantitative criteria for the immediate past two consecutive financial years.
Transitional Provisions for Existing Companies
An existing company can qualify as a “small company” if it is a private company and meets the quantitative criteria in the first or second financial year commencing on or after the date of commencement of the “small company” criteria.
USAFE’s Commitment
USAFE is dedicated to simplifying processes for our clients, allowing them to concentrate on their core operations. Our firm specializes in handling all aspects of corporate requirements, ensuring seamless compliance and accuracy in financial reporting. Besides, whether it’s conducting the audit, preparing relevant documentation, or liaising with regulatory authorities, we take care of it all. Moreover, we provide ongoing support and guidance to help clients navigate the regulatory landscape and optimize their financial reporting practices. Therefore, with our commitment to excellence, clients can trust in USAFE to deliver reliable services and support their long-term success.
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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