Introduction
Deciding how to appoint company auditors is a common compliance question for private companies in Singapore. This article, “How to Appoint Company Auditors: Thresholds, Obligations and Waivers”, explains the key thresholds for audit exemption, statutory obligations when appointing an auditor, and practical steps for making filings with ACRA.
The article is intended to guide directors, company secretaries and business owners through the Companies Act requirements, ACRA and IRAS expectations, and common commercial considerations.
Who this applies to
This guidance applies to private companies incorporated in Singapore, including startups, small and medium enterprises, holding companies and groups. It is relevant to:
- Directors and company secretaries responsible for statutory compliance.
- Shareholders considering whether the company needs an auditor.
- Financial officers preparing statutory accounts and tax returns for IRAS.
Key rules and requirements in Singapore
Under the Companies Act and ACRA practice, there are three main points to consider when appointing company auditors in Singapore.
1. Who must have an auditor
Generally, private companies are required to have their financial statements audited unless they qualify for an audit exemption. However, certain companies are not eligible for exemption and must appoint a registered public accountant (an auditor).
2. Audit exemption thresholds
Audit exemptions in Singapore apply to private companies that meet the definition of an exempt private company and qualify as a small company or a small group under statutory thresholds. The small company criteria use quantitative tests; commonly used thresholds are two out of three of the following:
- Annual revenue not more than S$10 million.
- Total assets not more than S$10 million.
- Number of employees not more than 50.
Where a group is involved, the consolidated figures for the group are used. Companies should confirm the precise timing and eligibility rules with ACRA, as there are procedural and timing considerations when claiming an exemption.
3. Other reasons you may still need audited accounts
- Lenders, investors or grant providers commonly require audited accounts as a condition of finance or support.
- Companies claiming certain tax incentives or reliefs with IRAS may need audited financial statements.
- Companies that are not exempt (for example, companies with corporate shareholders that are not exempt private companies) must appoint an auditor.
Step-by-step process
Below are practical steps to appoint an auditor or to claim an audit exemption for your company in Singapore.
Step 1: Determine exemption eligibility
- Confirm whether your company is an exempt private company (EPC) — typically a private company with no corporate shareholder and limited number of members — and whether it meets the small company or small group thresholds on the relevant basis.
- Check whether the company is dormant for the period; dormant companies may qualify for audit relief but tax and accounting records must still be maintained.
Step 2: If an auditor is required, identify qualified auditors
- Auditors must be registered public accountants with ACRA.
- Obtain written consent from the proposed auditor to act before formal appointment.
Step 3: Make the appointment at the appropriate time
- For newly incorporated companies, appoint an auditor within three months of incorporation unless exempt.
- Normally the appointment is made at the annual general meeting (AGM) or by written resolution if permitted.
- Ensure directors’ and shareholders’ minutes record the appointment and that the auditor’s consent is retained in company records.
Step 4: File with ACRA and keep records
- File auditor appointment and cessation forms via the ACRA BizFile+ portal as required.
- Maintain accounting records, financial statements (signed by directors) and auditor correspondence for statutory retention periods.
Step 5: Prepare for the audit or exemption declaration
- If audited, engage with the auditor on the Financial Year End timetable, audit scope and required schedules.
- If claiming exemption, prepare management accounts and statutory financial statements and ensure directors sign off on the financial statements and file annual returns on time via BizFile+. Tax filings still need to be submitted to IRAS through the myTax Portal.
Common mistakes to avoid
- Assuming audit exemption without checking the exempt private company status or the quantitative thresholds.
- Failing to obtain an auditor’s written consent before appointment.
- Missing the three‑month appointment window for newly incorporated companies.
- Not filing auditor appointment/cessation notifications on ACRA BizFile+ promptly.
- Overlooking lender or investor covenants that require audited reports despite an exemption.
- Neglecting to prepare statutory financial statements and retain accounting records even when exempt from audit.
Practical examples
Example 1 — Small SaaS startup: A private company with annual revenue of S$800,000, total assets S$120,000 and 8 employees may meet two of the three small company criteria and, if an exempt private company, could be eligible for audit exemption. However, if the company seeks venture capital, the investor may require audited accounts.
Example 2 — Group holding company: A holding company with subsidiaries must consider consolidated figures. If the consolidated revenue exceeds the thresholds, the group will not qualify as a small group and an audit may be required.
Example 3 — Dormant company: A company that has been dormant during the financial year may qualify for audit relief, but directors must still prepare and keep accounting records and check IRAS requirements for tax filing.
How a corporate secretary can help
A corporate secretary plays a central role in managing auditor appointments and compliance with the Companies Act and ACRA requirements. Typical support includes:
- Advising on whether the company qualifies for audit exemption and documenting the decision.
- Preparing board and shareholder resolutions to appoint or remove auditors, and obtaining the auditor’s written consent.
- Filing appointment and cessation forms on ACRA BizFile+ and maintaining statutory registers.
- Coordinating with auditors on audit timelines, Financial Year End planning and the submission of financial statements to IRAS via the myTax Portal.
- Assisting with related compliance matters such as Payroll, CPF contributions, GST filings and Employment Act obligations where relevant.
Raffles Corporate Services can assist discreetly with filings, compliance, accounting, tax and payroll support if required.
Frequently Asked Questions
Do all private companies need to appoint an auditor?
Not always. Private companies that qualify as exempt private companies and meet the small company or small group thresholds may be exempt from audit. Companies that do not meet the criteria, or that have other reasons (investor or lender requirements), must appoint a registered public accountant.
When must an auditor be appointed after incorporation?
As a general rule, a company should appoint an auditor within three months of incorporation unless it is eligible for an audit exemption. Directors should ensure the appointment is documented and filed on ACRA BizFile+ as required.
Can a company change auditors during the year?
Yes. Auditor resignations or removals must be handled in accordance with the Companies Act and the terms of engagement. Notices and filings via ACRA BizFile+ are required, and the company should ensure continuity of audit work where necessary.
Will IRAS accept unaudited accounts if the company is audit-exempt?
IRAS accepts tax submissions from audit-exempt companies but may request additional information or audited accounts in specific cases (for example, where tax incentives are claimed or where IRAS requires verification). It is important to maintain clear management accounts and supporting records.
Key takeaways
- Determine whether your company is an exempt private company and whether it meets small company/group thresholds before assuming audit exemption.
- Appoint an auditor within statutory timeframes if the company is not exempt; obtain written consent and file with ACRA BizFile+.
- Maintain statutory financial statements and accounting records even when exempt from audit.
- Commercial requirements (lenders, investors, tax incentives) may still require audited accounts despite statutory exemptions.
- Engage a corporate secretary or professional adviser to manage resolutions, filings and ongoing compliance.
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
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.