Audit

An audit is the annual examination of a company’s accounting records, to ensure that they are free from misstatements.

“Small companies” are exempted from having their financial statements audited.
If the following conditions are met, a company qualifies as a small company:
(a) It is a private company in the relevant financial year; and
(b) It satisfies at least 2 out of the following 3 criteria for the past two consecutive financial years:
- Total annual revenue ≤ USD 10 million
- Total assets ≤ USD 10 million
- Number of employees ≤ 50 people
For companies that are part of a group, the following conditions must be met to qualify for audit exemption:
(a) The individual company must qualify as a small company; and
(b) The entire group must qualify as a “small group”.

For a group to be considered a small one, it must meet at least 2 out of 3 quantitative criteria of the comprehensive basis of accounting, for the past two consecutive financial years.

If a company qualifies as a small company, it will continue to be a small company in the subsequent financial years until it is disqualified.

A company will be disqualified as a small company if:
(a) It ceases to be a private company at any point of time during a financial year;
or 
(b) It fails to meet at least 2 out of the 3 quantitative criteria for the most recent two consecutive financial years.

If a group qualifies as a small group, it will remain a small group in the subsequent financial years, until it fails to meet at least 2 out of the 3 quantitative criteria for the past two consecutive financial years.

For more information regarding audits, please visit the ACRA website.

Every company must appoint an auditor within 3 months of its incorporation, unless it is exempted from audit requirements under the relevant provisions of the Companies Act.