Is a Singapore Company Required to Be Audited? Comprehensive Analysis of Facts and Options

Does a Singapore company need an audit? This question may seem simple, but it actually involves many factors. According to the regulations of the Accounting and Corporate Regulatory Authority ACRA of Singapore, different types of companies have different audit requirements. This article will explore in depth whether a Singapore company must undergo an audit, and analyze the reasons and choices behind it, based on recent news.

According to ACRA's latest regulations, a private limited company in Singapore must undergo an annual audit under the following circumstances

1. Annual turnover exceeds 5 million SGD

2. Total assets exceed 5 million SGD

3. Number of employees exceeds 50

If a company meets any of the above conditions, it must hire a registered accounting firm to conduct an annual audit and submit the audit report to ACRA. This regulation will be gradually implemented starting in 2025, aiming to improve financial transparency and boost investor confidence.

For public companies or businesses regulated by supervisory authorities, such as banks and insurance companies, regardless of their size, they must undergo mandatory audits. The financial information of these companies directly affects public interest, making audits an essential part of their operations.

However, for most small private enterprises, audits are not mandatory. This means that if a company does not meet the above three criteria, it can choose not to undergo an audit. But this does not mean that financial health should be ignored-on the contrary, it may require more attention through other means.

In recent years, with Singapore's continuous economic growth, more and more small and medium-sized enterprises have started to pay more attention to financial management. According to a report by The Straits Times in June 2025, over 60% of small and medium-sized enterprises in Singapore said they were considering introducing internal audit mechanisms or hiring external consultants for financial reviews to improve operational efficiency and risk control.

Although our company is currently not required to undergo a mandatory audit, we still choose to have professional accountants review our financial statements annually to ensure the accuracy of our financial data. Said a founder of a Singapore tech startup during an interview.

This trend reflects that even when audits are not legally required, many companies tend to proactively conduct financial reviews to enhance their competitiveness and credibility. Especially in today's uncertain global economic environment, sound financial management and transparent financial reporting have become key to gaining the trust of customers and investors.

At the same time, Singapore is also promoting financial transparency among businesses. In May 2025, ACRA announced that it would strengthen its oversight of financial disclosures, requiring more companies to publicly disclose their financial information, especially regarding related-party transactions and major asset changes. This move not only helps combat financial fraud but also contributes to improving the overall integrity of the market.

It is worth noting that auditing is not just a compliance issue-it is also an important tool for business development. Through audits, companies can identify potential financial loopholes, optimize resource allocation, and improve operational efficiency. For example, some companies discovered unnecessary expenses during audits, leading to cost savings; others improved their internal control processes and enhanced overall management.

Nevertheless, audits are not suitable for all companies. For smaller businesses with relatively simple operations, the cost of an audit may be high, and the actual need may be limited. In such cases, companies can choose to use financial software for daily management or regularly consult accountants for non-audit financial advice.

Overall, whether a Singapore company needs an audit depends on its business size, industry characteristics, and the strategic choices of its management. While mandatory audits apply only to certain companies, more and more businesses are realizing that good financial management and transparent financial reporting are not only necessary for compliance but also essential for long-term development.

Looking ahead, as Singapore's economy continues to grow and international competition intensifies, the demand for financial transparency and compliance is likely to increase. Whether it is mandatory or voluntary, companies should make reasonable choices based on their own situations to ensure they remain competitive in the market.