Most small Singapore companies do not need an audit, but every company still needs to prepare proper financial statements. That is where unaudited financial statements and the compilation report come in. They are the standard way an exempt private company presents its year-end accounts to shareholders, ACRA and IRAS, prepared to a recognised professional standard without the cost and intrusion of a full statutory audit.
This guide explains what unaudited financial statements and compilation reports are, who can rely on them, how they differ from an audit, and what a compliant set contains in 2026. If you first need to check whether you even qualify to skip the audit, read our guide to the small company audit exemption under Section 205C.
What are unaudited financial statements?
Unaudited financial statements are a company’s year-end accounts, the statement of financial position (balance sheet), statement of comprehensive income (profit and loss), statement of changes in equity, cash flow statement and accompanying notes, prepared in accordance with the Singapore Financial Reporting Standards (SFRS), but not subjected to an independent audit. They still have to give a true and fair view; the difference is that no auditor has expressed an opinion on them.
They remain the directors’ responsibility. Audit exemption removes the auditor, not the obligation to keep proper books and prepare accounts that comply with the applicable standards.
What is a compilation report?
A compilation report is a short statement, prepared by a professional accountant, describing the work done in assembling the financial statements from the information the company provided. It is prepared under the Singapore Standard on Related Services (SSRS 4410), the recognised framework for compilation engagements.
Crucially, a compilation is not an assurance engagement. The accountant does not verify the underlying figures, test transactions, or express an opinion on whether the accounts are free from material misstatement. Instead, the accountant applies accounting and financial reporting expertise to present the information in the correct format and standard, and reports that this is what was done. It gives readers comfort that a qualified professional prepared the statements properly, without claiming they have been audited.
Compilation versus audit: the key differences
| Feature | Compilation report | Statutory audit |
|---|---|---|
| Level of assurance | None | Reasonable assurance (an opinion) |
| Standard applied | SSRS 4410 | Singapore Standards on Auditing |
| Testing of transactions | No | Yes |
| Who performs it | Professional accountant | Registered public accountant / audit firm |
| Typical cost | Lower | Higher |
| When required | For companies that qualify for audit exemption | For companies that do not |
Who can use unaudited financial statements?
A private company can dispense with an audit if it qualifies as a small company. Broadly, it must be a private company that meets at least two of three thresholds in each of the last two financial years: total annual revenue of not more than S$10 million, total assets of not more than S$10 million, and not more than 50 employees. Where the company is part of a group, the group must also qualify as a small group on a consolidated basis.
A dormant company generally has an even lighter touch and may be exempt from preparing certain statements altogether, though it must still maintain its records. Companies that fall outside these tests, or that operate in regulated sectors, still need a full audit and cannot rely on a compilation.
What a compliant set of unaudited financial statements contains
A typical set prepared for an exempt private company includes the directors’ statement, the compilation report from the accountant, the statement of financial position, the statement of comprehensive income, the statement of changes in equity, the cash flow statement, and detailed notes to the accounts. The figures must comply with SFRS or, for eligible smaller entities, SFRS for Small Entities.
These statements feed directly into two downstream obligations: the annual filing with ACRA and the corporate income tax return with IRAS. Getting them right the first time saves rework at both ends.
Do you still need to file them?
Yes. Audit exemption does not remove the duty to prepare and, where applicable, file financial statements. Most non-dormant private companies must present accounts to shareholders, file their annual return with ACRA (often in XBRL format), and use the accounts as the basis for the tax computation. Exempt private companies meeting certain conditions may file a simplified declaration of solvency instead of the full accounts, but the accounts must still exist and be available. Keeping your statutory registers current supports a smooth year-end close.
Common pitfalls
The recurring problems we see are treating audit exemption as if it removed the need for proper accounts; using a compilation report where a statutory audit was actually required; preparing accounts that do not follow the correct SFRS framework; and leaving the compilation to the last minute so it delays the annual return and tax filing. A compilation is quicker than an audit, but it is not instant, and it depends entirely on the quality of the underlying bookkeeping.
How Raffles Corporate Services can help
We prepare unaudited financial statements and compilation reports for Singapore SMEs to the SFRS and SSRS 4410 standards, coordinate the directors’ statement and shareholder approval, and carry the figures straight through to your ACRA annual return and IRAS tax filing. Because we handle the bookkeeping, accounts and tax under one roof, the year-end process stays fast and consistent.
For the underlying requirements, see the Companies Act 1967 and ACRA’s financial reporting guidance at acra.gov.sg.
— The Editorial Team, Raffles Corporate Services