The auditor is one of the few positions in a Singapore private company where the appointment, removal and remuneration all sit in the Companies Act rather than at the discretion of directors alone. That is by design — auditors act as an independent check on management, and shareholders decide whether that check continues. Directors can propose, but only members can appoint or remove.
This 2026 guide walks through the statutory framework for appointing and removing auditors under the Companies Act 1967, the practical steps involved, and the situations that trip up boards — particularly the “special notice” requirement for removal, which is one of the most commonly overlooked procedural rules in Singapore company law.
The Statutory Framework
The auditor appointment and removal rules for private companies sit in Sections 205 to 207 of the Companies Act 1967:
- Section 205 — Duty to appoint an auditor within 3 months of incorporation, and annually thereafter.
- Section 205AF — Requirements for the auditor (Public Accountant registered under the Accountants Act).
- Section 205C / 205D — Audit exemption for small companies and small groups. See our audit exemption guide.
- Section 206 — Filling casual vacancies in the auditor’s office.
- Section 207 — Removal of auditor by ordinary resolution with special notice.
- Section 205AB — Rights of an auditor to receive notices and make written representations.
Appointment of Auditor
First Auditor — Board Appointment
Under Section 205(2), the directors of a Singapore company must appoint the first auditor within three months of incorporation. The first auditor holds office until the conclusion of the first AGM.
If the directors fail to appoint within 3 months, members can appoint the first auditor by ordinary resolution.
Subsequent Appointments — Members’ Resolution
After the first AGM, auditors are appointed annually by ordinary resolution of the members at each AGM. Under Section 205(4), the auditor holds office from the end of the AGM until the conclusion of the next AGM.
Companies That Dispense With AGMs (Section 175A)
Where a private company dispenses with AGMs under Section 175A, the auditor is deemed re-appointed unless members pass a resolution to the contrary or the auditor gives written notice that they do not wish to be re-appointed.
Auditor Qualifications
Under Section 10 of the Accountants Act, the auditor must be a Public Accountant (or a firm of Public Accountants) registered with the Accounting and Corporate Regulatory Authority (ACRA). Only Public Accountants may issue statutory audit reports on Singapore-incorporated companies.
Removal of Auditor — the Section 207 Procedure
Section 207 governs removal of an auditor before their term expires (i.e., before the next AGM). It is a defined statutory procedure and cannot be bypassed by a simple board resolution.
Step 1 — Special Notice From a Member
A member (or the board through a member) gives special notice of the intention to move a resolution at a members’ meeting to remove the auditor. Special notice must be received by the company at least 28 days before the meeting.
Step 2 — Company Informs the Auditor
On receiving special notice, the company must forthwith send a copy to the auditor. The auditor has the right to make written representations under Section 207(6), which the company must circulate to members.
Step 3 — Meeting Held
At the members’ meeting, an ordinary resolution (simple majority) is passed to remove the auditor. The auditor has the right to speak at the meeting under Section 207(4).
Step 4 — Notification to ACRA
Within 14 days of the resolution being passed, the company files a Notice of Cessation of Auditor with ACRA via BizFile+.
Step 5 — Filling the Vacancy
The same meeting can appoint a new auditor by ordinary resolution, provided the incoming auditor has consented to act. Otherwise the vacancy is treated as a casual vacancy under Section 206 and filled by directors.
Casual Vacancy — Resignation of Auditor
Auditors sometimes resign before the end of their term — because of independence concerns, unpaid fees, or disagreements over accounting treatment. Under Section 205AF and Section 206:
- The auditor’s resignation takes effect only when the auditor gives written notice to the company and ACRA.
- ACRA must consent to the resignation for public interest entities. For private companies, resignation is effective on the auditor’s notice.
- Directors can appoint a replacement auditor to fill the casual vacancy, who then holds office until the next AGM.
- The company must file Notice of Cessation and Appointment via BizFile+ within 14 days.
Auditor Rotation and Independence
Singapore does not currently mandate audit firm rotation for private companies. However, listed companies and PIEs are subject to five-year audit engagement partner rotation under the Singapore Standards on Auditing.
Private companies should still consider independence issues:
- The same public accountant handling both audit and bookkeeping creates a self-review threat.
- Non-audit services (tax, corporate secretarial) offered by the audit firm may compromise independence.
- Familiarity threats build up over long auditor tenure, especially in owner-managed businesses.
Auditor Fees and Their Approval
Auditor remuneration is fixed by whoever appointed the auditor:
- If appointed by directors (first auditor / casual vacancy), directors fix the fee.
- If appointed by members (annual re-appointment), the resolution can either fix the fee or delegate to directors.
Auditor fees must be disclosed in the financial statements under SFRS. Materially increased fees year-on-year should be justified — significant fee jumps can prompt IRAS or ACRA scrutiny.
Common Situations and How to Handle Them
Situation 1 — The Auditor Won’t Sign Off
Where an auditor and management disagree over an accounting treatment or the auditor is unable to obtain sufficient audit evidence, the auditor may issue a modified opinion (qualified, adverse, or disclaimer). Directors cannot force the auditor to sign off. Options:
- Address the underlying issue (usually the preferred route).
- Accept the modified opinion and disclose in financial statements.
- Remove and replace the auditor — but the new auditor will inherit the same issue and is bound by the same standards.
Situation 2 — The Auditor’s Fees Are Too High
Negotiate before the audit starts. Explore alternative firms — most SMEs benefit from quoting the audit annually. Do not switch mid-audit, as the successor auditor must repeat the opening balance work.
Situation 3 — Directors Disagree With Members Over Removal
Under Section 207, the members’ vote is decisive. Directors can propose but not override. Disputes here often signal deeper shareholder tensions — see our Section 216A derivative action guide and Section 216 oppression guide.
Situation 4 — Company Qualifies for Audit Exemption Mid-Year
A company that qualifies for audit exemption can simply not re-appoint the auditor at the next AGM. If the auditor’s term is running, allow it to expire naturally. Or, if the auditor consents, they can resign as a casual vacancy without a replacement being appointed (subject to disclosure).
ACRA Filings on Auditor Changes
Every appointment, cessation and resignation of an auditor must be filed with ACRA within 14 days via BizFile+. Common filings:
- Notice of Appointment of Auditor — after first appointment or replacement.
- Notice of Cessation of Auditor — after removal, resignation or non-reappointment.
- Notice of Resignation of Auditor — where the auditor resigns.
Failure to file promptly attracts ACRA composition fines and is a common finding in ACRA compliance audits.
Frequently Asked Questions
Q: Can the same firm do both the audit and the tax computation?
Yes, but the audit team must be independent of the tax team. Larger firms segregate these engagements; smaller firms need robust independence safeguards.
Q: What is “special notice” and why is 28 days important?
Special notice under Section 185 is a statutory notice period of at least 28 days before the meeting. It ensures the auditor has fair opportunity to make written representations. Skipping it invalidates the removal.
Q: Can our audit exempt company simply “not have an auditor”?
Yes. Companies qualifying for exemption under Section 205C do not need to appoint an auditor at all. The Directors’ Statement in the financial statements must state that the company relies on the exemption.
Q: The auditor resigned three days before signing off — what do we do?
File Notice of Resignation with ACRA within 14 days. Appoint a replacement auditor immediately if the audit is required. Expect the replacement to require additional time to become familiar with the accounts before signing off.
Q: Do we need shareholder approval to appoint a big-four firm as auditor?
Any auditor appointment beyond the first auditor requires an ordinary resolution of members — the size or brand of the firm is irrelevant.
Getting the Audit Relationship Right
The relationship with your auditor is not just a compliance formality. A good auditor catches problems early, provides useful benchmarking against industry peers, and adds credibility when your company approaches banks, investors or acquirers. A bad auditor relationship — whether because of fee disputes, quality issues, or independence concerns — is best resolved through the Section 207 procedure rather than allowed to fester.
Raffles Corporate Services assists Singapore SMEs with auditor appointment procedures, coordinating auditor tenders, filing BizFile+ notifications, and — where a company is transitioning to audit exemption — preparing the disclosures required in the Directors’ Statement.
— The Editorial Team, Raffles Corporate Services