Introduction
Regulatory bodies such as ACRA and IRAS may conduct compliance reviews or audits to verify that companies meet statutory obligations. Preparing for an ACRA or IRAS compliance review or audit reduces disruption and demonstrates good governance.
This article, How to Prepare for an ACRA or IRAS Compliance Review or Audit, explains who this applies to, the key rules and requirements in Singapore, a step-by-step preparation process, common mistakes to avoid, practical examples and how a corporate secretary can help.
Who this applies to
This guidance is relevant to:
- Directors and company officers of Singapore private companies (including subsidiaries of foreign groups).
- Company secretaries and in-house compliance personnel.
- SMEs and new start-ups preparing their first Financial Year End filings.
- Accountants and payroll teams responsible for statutory submissions such as GST, CPF and corporate tax.
Key rules and requirements in Singapore
Regulatory expectations are set by the Companies Act, IRAS practice notes and agency-specific guidance. Important areas include:
- Statutory filings with ACRA via the BizFile+ portal (annual returns, changes to directors, registered office, Constitution updates).
- Corporate tax submissions to IRAS via myTax Portal, including timely filing of Form C-S/C, estimated chargeable income and supporting schedules.
- Accounting records and audit requirements under the Companies Act (audit exemptions apply for qualifying small companies).
- GST registration, filing and documentation where turnover thresholds or taxable supplies trigger obligations.
- Payroll compliance: CPF contributions, timely CPF submissions and record-keeping, plus Employment Act considerations for eligible employees.
- Data protection and records management in line with the PDPA when responding to information requests.
Step-by-step process
Follow a structured approach to prepare for a compliance review or audit. The recommended steps are:
1. Identify scope and timelines
Confirm which regulator (ACRA or IRAS) will conduct the review, the documents requested, the review period (e.g. FY20XX), and deadlines. Early clarification avoids unnecessary work.
2. Assemble a response team
Appoint a project lead (often the company secretary or finance manager) and involve external advisers as needed. Keep a single point of contact for the regulator.
3. Gather core records
Collect essential documents, such as:
- Financial statements, general ledgers and trial balances for the review period.
- Board minutes, directors’ resolutions and share registers.
- GST returns, tax computations, notices of assessment and correspondence with IRAS.
- Payroll records, CPF contribution history and contracts of employment.
- Contracts with customers and suppliers where related-party transactions are involved.
4. Reconcile and validate
Reconcile bank accounts, GST control accounts and payroll ledgers. Validate that figures reported to IRAS and ACRA match underlying records. Resolve discrepancies before engagement with the regulator.
5. Prepare concise explanations
Prepare clear explanations for unusual transactions, prior year adjustments, related-party arrangements and tax positions. Attach supporting documentation and sign-offs from responsible officers.
6. Review governance and controls
Document internal controls over financial reporting, procurement and approvals. Demonstrating governance reduces regulator concerns and may shorten the review.
7. Maintain a response log
Track all submissions, dates of communication, and actions taken. This provides an audit trail and ensures nothing is overlooked.
8. Coordinate and submit
Submit requested documents via the prescribed channels (e.g. ACRA BizFile+ portal, IRAS myTax Portal or email where specified). Retain proof of submission.
9. Implement post-review actions
Address regulator findings promptly. Implement recommended control or filing changes and document remediation steps.
Common mistakes to avoid
- Relying on incomplete or unsupported schedules when responding to queries.
- Delaying responses to regulator enquiries—timeliness demonstrates cooperation.
- Failing to reconcile amounts reported to ACRA and IRAS with accounting records.
- Overlooking payroll and CPF records when reviews focus on labour costs.
- Not documenting explanations or approvals for related-party or non-routine transactions.
- Not seeking professional advice when tax positions are unclear—IRAS enquiries can result in assessments or penalties.
Practical examples
The following examples illustrate common review scenarios and practical responses.
Example 1: Discrepancy in revenue figures
Situation: IRAS queries differences between tax filings and GST returns.
Practical response: Reconcile sales ledgers to GST returns, identify timing differences (e.g. invoices issued close to year end), and provide reconciliations with supporting invoices and bank receipts.
Example 2: Unrecorded director loan
Situation: ACRA requests clarification on director transactions noted during a review of company minutes.
Practical response: Produce board minutes authorising the advance (if any), an agreement or repayment schedule, and evidence of repayment or interest treatment in the accounts. If documentation is missing, prepare a retroactive resolution and confirm disclosure moving forward.
Example 3: GST treatment of mixed supplies
Situation: IRAS questions GST charged on certain bundled services.
Practical response: Prepare a breakdown of each supply, explain the basis for GST treatment with references to IRAS guidance, and provide invoices and contracts that support the tax positions taken. Where uncertainty exists, consider seeking a private ruling from IRAS.
How a corporate secretary can help
A corporate secretary in Singapore plays a crucial role in preparing for compliance reviews. Typical assistance includes:
- Coordinating communications with ACRA and maintaining statutory registers and minutes.
- Ensuring timely filing of annual returns and company changes via the ACRA BizFile+ portal.
- Advising on disclosure obligations under the Companies Act and assisting with board resolutions.
- Working with finance and payroll teams to collate records for IRAS reviews, including GST and CPF documentation.
- Facilitating meetings with external auditors, tax advisers and legal counsel where required.
Raffles Corporate Services can assist with filings, compliance, accounting, tax and payroll support to help you prepare a robust response.
Frequently Asked Questions
How long does an ACRA or IRAS review typically take?
Timelines vary with scope and complexity. A simple documentation request may close in days, while a more detailed tax review can take several months. Prompt and organised responses usually shorten review durations.
Will a review always lead to penalties?
Not necessarily. Many reviews identify minor record-keeping issues or require clarifications. Penalties arise when there is wilful non-compliance, late filings, or understated tax liabilities. Demonstrating cooperation and remedial action can mitigate outcomes.
What records should companies retain?
Companies should retain accounting records, invoices, contracts, minutes, payroll records and statutory registers for the retention periods required by law and as specified by ACRA and IRAS. Records should be readily accessible for review.
Do I need a lawyer or tax adviser during a review?
It depends on the issues raised. For complex tax positions, potential disputes or material regulatory findings, engaging a tax adviser or lawyer is advisable. For routine documentation requests, a corporate secretary and finance team may be sufficient.
Call to action
If you would like to find out more about how Raffles Corporate Services can assist with your company’s compliance and corporate secretarial requirements, please get in touch with the team at [email protected].
Yours sincerely,
The editorial team at Raffles Corporate Services
Key takeaways
- Understand the scope and deadlines of any ACRA or IRAS review at the outset.
- Assemble a response team and centralise document collection early.
- Reconcile and validate figures before submitting to regulators.
- Document explanations, approvals and internal controls to demonstrate good governance.
- Seek professional advice for complex tax positions or material regulatory findings.
Requirements may change, so always check the latest guidance from ACRA, IRAS or MOM, or consult a professional adviser.
Disclaimer: This does not constitute legal advice. If you require legal advice, please contact a lawyer.