Introduction
When Can a Singapore Company Be Exempt from Audit and What It Means is a common question for founders and small-business directors. The audit requirement affects reporting, compliance costs and how financial information is relied upon by banks, investors and regulators.
This article explains the general rules on when a Singapore company can be exempt from a statutory audit under the Companies Act, what that exemption means in practice, and the steps companies should take to remain compliant. It also outlines how Raffles Corporate Services can assist with filings, compliance and accounting support.
Who this applies to
This guidance is aimed at:
- Directors and shareholders of private companies incorporated in Singapore.
- Small groups and single-entity businesses considering whether they qualify for audit relief.
- Company secretaries, accounting officers and those responsible for corporate compliance.
Key rules and requirements in Singapore
In Singapore, a private company may be exempt from a statutory audit in limited circumstances. The Companies Act and ACRA guidance set the framework, supplemented by tax rules from IRAS and sometimes requirements from other regulators.
Key points to understand:
- Eligibility relates mainly to the company’s legal form (private company) and size. Small companies and qualifying small groups may be eligible for audit exemption.
- Meeting the quantitative thresholds (commonly referred to as the “small company” or “small group” tests) is central. Typically these tests compare figures such as revenue, total assets and number of employees for the relevant financial year.
- Certain companies cannot claim audit exemption, including entities that are regulated to require audits (for example, some financial institutions), public companies and companies that are part of arrangements requiring audited accounts.
- Audit exemption does not remove the obligation to prepare proper financial statements, keep accounting records, or to meet corporate tax filing obligations with IRAS (for example, filing Form C or Form C-S where eligible via IRAS myTax Portal).
- Dormant companies may also be eligible for simplified reporting in some cases, but directors must confirm dormancy consistent with Companies Act definitions and record keeping requirements.
Requirements may change, so always check the latest guidance from ACRA, IRAS or MOM, or consult a professional adviser.
Step-by-step process
If you think your company may be exempt from audit, follow a clear process to confirm and document the position.
- Step 1 — Confirm company type: Check that the entity is a private company and not subject to specific sectoral audit requirements.
- Step 2 — Assess size and tests: Compare your company’s revenue, total assets and number of employees against the thresholds for the relevant financial year. Consider group aggregation if the company forms part of a group.
- Step 3 — Consider other legal requirements: Ensure there are no contractual or regulatory obligations requiring an audit (lender covenants, grant conditions, or licences may require audited accounts).
- Step 4 — Prepare board documentation: Directors should document the eligibility assessment and resolutions. Maintain minutes and supporting schedule of figures.
- Step 5 — Inform stakeholders: Notify shareholders, lenders or other stakeholders if they have a right to request an audit, or if you previously reported audited accounts and will be changing practice.
- Step 6 — Maintain proper records: Continue to prepare financial statements and retain accounting records and supporting documents in case of future audit requests or IRAS queries.
- Step 7 — File required returns: Continue to meet ACRA filing obligations via the ACRA BizFile+ portal and tax filings via IRAS myTax Portal. Audit exemption does not replace these obligations.
Common mistakes to avoid
- Assuming exemption applies automatically without documenting the eligibility assessment and board approvals.
- Failing to consider group consolidation rules — a parent or group entity may affect whether the company qualifies as a “small group” or loses exemption.
- Overlooking other statutory or contractual audit requirements (e.g. certain licences, funding agreements, or investor terms).
- Neglecting ongoing record-keeping and internal controls because there is no audit — good governance still requires accurate records.
- Not reassessing eligibility when turnover, assets or headcount increase during the next financial year.
Practical examples
Example 1 — Single small company
A private company with revenue of S$800,000, total assets of S$600,000 and 4 employees may meet the small company tests and be exempt from audit. Directors should document the assessment and keep financial statements for stakeholders and IRAS.
Example 2 — Small group
If a holding group with three subsidiaries has consolidated revenue and assets below the thresholds and total employees under the limit, the group may qualify for small group exemption. Group consolidation rules apply and must be assessed carefully.
Example 3 — Dormant company
A company with no business transactions during the financial year that meets the Companies Act definition of dormant may be eligible for simplified reporting or audit relief, but directors must confirm dormancy and keep evidence.
How a corporate secretary can help
A corporate secretary and corporate services provider can help by:
- Assessing eligibility against Companies Act and ACRA guidance and advising on group treatment.
- Preparing board and shareholder minutes, resolutions and supporting schedules to document the decision not to have an audit.
- Lodging statutory filings on ACRA BizFile+ and coordinating with auditors or accountants if an audit or voluntary review is later required.
- Assisting with accounting, payroll (including CPF compliance) and tax liaison via IRAS myTax Portal to ensure corporate tax, GST and payroll obligations are met.
Raffles Corporate Services can assist with compliance filings, accounting, tax and payroll support to help maintain the appropriate documentation and filings.
Frequently Asked Questions
Can any private company in Singapore claim audit exemption?
No. Only private companies that meet the specific eligibility conditions (for example, qualifying as a small company or small group under the Companies Act rules) may claim audit exemption. Entities subject to other regulatory or contractual audit requirements are excluded.
If my company is exempt from audit, do we still file tax returns with IRAS?
Yes. Audit exemption does not remove the company’s obligation to file corporate tax returns with IRAS. Depending on circumstances, your company may be eligible to file a simplified return (Form C-S) but you should confirm eligibility and keep proper records accessible for tax review.
What should we do if the company grows and no longer meets the thresholds?
If the company exceeds the thresholds in a subsequent financial year, it should reassess its audit position promptly and arrange for an audit if required. Directors should document the change in circumstances and take steps to appoint auditors where necessary.
Can shareholders force an audit even if the company qualifies for exemption?
Shareholders with appropriate rights in the constitution or under the Companies Act may be able to require an audit. Check your company’s constitution and seek professional advice if there is a dispute.
Key takeaways
- Audit exemption in Singapore is limited to eligible private companies or small groups meeting the relevant size tests under the Companies Act.
- Exemption does not remove obligations to prepare financial statements, keep accounting records, or to file tax and statutory returns via IRAS myTax Portal and ACRA BizFile+.
- Document the eligibility assessment, board resolutions and supporting schedules to demonstrate good governance.
- Reassess eligibility annually, and consider regulatory, contractual and stakeholder requirements that may still require audits.
- Raffles Corporate Services can help with compliance, filings, accounting, tax and payroll support to manage the practical steps and documentation.
Contact and next steps
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
Disclaimer: This does not constitute legal advice. If you require legal advice, please contact a lawyer.