Audit Exemption for Private Companies
New audit exemption criteria for private companies wef 1 July 2015
Private companies are exempt from having their statutory financial statements for financial years beginning on or after 1 July 2015 audited if it is a considered as a small company and, if it is a parent or subsidiary company, it is also part of a small group. Under the Companies Act, a company is considered a small company if 2 out of 3 of the following conditions are met for each of the 2 financial years immediately preceding the financial year:
- Turnover does not exceed S$10 million,
- Gross assets do not exceed S$10 million, and
- Company does not have more than 50 employees.
Any 2 out of the above 3 criteria has to be met for both the 2 preceding financial years for a company to be considered as small company and be exempt from auditing requirements. If this condition is not met for any of the 2 previous financial year, the company will not be considered as a small company.
If the Company is part of a group (i.e. it is subsidiary of another corporation) or is itself a parent company (i.e. Company has subsidiary companies), the above thresholds are to be applied on a consolidated basis – i.e. including parent and other group companies – to determine if the company is also part of a small group. Group companies include not just Singapore companies.
This new criteria for audit exemption applies to financial years beginning on or after 1 July 2015 regardless of the financial year end date. The above criteria will apply differently to newly incorporated companies which have yet to reach their third financial year.
This exemption from audit applies to private companies only. As such, public companies (companies limited by guarantee or public companies limited by shares) continue to be required to have their financial statements audited unless they are dormant.
An audit may also be required depending on the company’s requirements – for licensing purposes or if audit of the financial statements are required by the company’s industry regulators.
Contact us if you require the financial statements to be audited or if you require any further clarifications on whether you are required to have your financial statements audited.
We can help you
K E Wee & Associates and its affiliates provide services to address the above company financial reporting and tax compliance requirements. Professional fees are dependent on the scope of volume of work required. These are usually driven by type of industry, business size and complexity. Contact us to discuss our services available for all the above requirements and fees.
We are a firm of Chartered Accountants and Public Accountant that provides audit and assurance services. If you require your financial statements to be audited, contact us to explore how we may provide this service to you.