Conditions and Requirements for Company Audit in Singapore A Comprehensive Analysis

The Conditions for Company Audits in Singapore Everything You Need to Know, from Practice to Regulations

In today's globalized economic environment, corporate compliance and transparency have become key concerns for investors, regulatory authorities, and business partners. For companies registered in Singapore, audits are not only a legal requirement but also an important means of enhancing corporate reputation. This article will comprehensively explain the conditions, practical procedures, relevant regulations, and recent news related to company audits in Singapore.

1. Basic Requirements for Company Audits in Singapore

According to the Companies Act of Singapore, all companies registered in Singapore must conduct annual financial statement audits as required. However, not all companies are subject to mandatory audits. Specifically, the following types of companies must undergo mandatory audits

1. Publicly listed companies According to the Securities and Futures Act, the financial statements of all publicly listed companies must be audited by independent accounting firms.

2. Large private companies Under Section 307 of the Companies Act, if a company meets two or more of the following criteria, it must undergo a mandatory audit

Annual turnover exceeding S$5 million;

Total assets exceeding S$2.5 million;

Employee count exceeding 50 people.

3. Financial institutions such as banks and insurance companies These sectors are strictly regulated by the Monetary Authority of Singapore MAS, and their financial statements must be independently audited.

Even if some companies do not meet the above criteria, they may choose to voluntarily undergo an audit to enhance financial transparency and investor confidence.

2. Practical Process of Company Audits in Singapore

The company audit process in Singapore typically includes the following steps

1. Hiring an auditor The company must select an appropriate auditor from ACRA-approved auditing firms. The auditor must be professionally qualified and have no conflicts of interest with the company.

2. Preparing financial statements The company’s management must ensure that the financial statements comply with the requirements of International Financial Reporting Standards IFRS or Singapore Financial Reporting Standards SFRS.

3. Conducting audit procedures The auditor will review the company’s financial records, internal controls, balance sheets, and income statements to ensure their accuracy and authenticity.

4. Issuing the audit report After the audit is completed, the auditor will issue a formal audit report stating whether the financial statements fairly reflect the company’s financial position.

5. Submitting to ACRA For companies that require mandatory audits, the audit report must be submitted to the Accounting and Corporate Regulatory Authority ACRA for record-keeping.

3. Legal Basis for Company Audits in Singapore

The main legal basis for company audits in Singapore is the Companies Act. This law details the requirements for financial reporting and audits. The following regulations also have significant influence on audit activities

International Financial Reporting Standards IFRS Applied to listed companies and certain large enterprises, ensuring comparability and transparency of financial information.

Singapore Financial Reporting Standards SFRS Applied to non-listed companies, providing a unified standard for financial reporting.

Auditor Professional Standards Established by the Institute of Chartered Accountants of Singapore ICAS, these standards regulate the professional behavior and operational procedures of auditors.

In recent years, Singapore has continuously strengthened its regulation of corporate financial transparency. For example, in 2025, the Monetary Authority of Singapore MAS issued a consultation paper on improving the quality of corporate financial reporting, proposing further measures to enhance audit independence in order to prevent financial fraud and misconduct.

4. Recent News and Trends

At the beginning of 2025, a financial fraud case involving several small businesses in Singapore sparked public attention on the audit system. According to The Straits Times, some companies that did not meet the mandatory audit threshold were found to have overstated revenue and hidden debts due to the lack of independent audits. This incident prompted ACRA to strengthen its supervision over small businesses and encourage more companies to voluntarily undergo audits.

With the development of artificial intelligence and big data technology, the audit industry in Singapore is gradually introducing digital tools. For instance, in June 2025, the Accounting and Corporate Regulatory Authority ACRA announced support for using blockchain technology for financial data verification, aiming to improve audit efficiency and data security.

At the same time, global ESG Environmental, Social, and Governance standards are also influencing audit practices in Singapore. More and more companies are incorporating sustainability reports into their audit scope to meet the expectations of investors and society.

5. How to Choose the Right Auditor?

In Singapore, choosing the right auditor is crucial. The following factors should be considered when selecting an auditor

Qualifications and experience Ensure the auditor has a valid professional license and extensive experience in the relevant industry.

Independence The auditor should have no financial or other interests in the company to guarantee the objectivity of the audit results.

Service quality Understand the service level of the auditor through recommendations from peers or customer reviews.

Cost-effectiveness Control audit costs reasonably while ensuring quality.

6. Conclusion

As a major global business center, Singapore attracts numerous multinational and local companies with its strict audit system and high level of corporate transparency. Whether it is a mandatory audit or a voluntary one, it is an essential part of corporate compliance. With the continuous improvement of regulatory policies and technological advancements, the audit industry in Singapore is moving toward greater efficiency, transparency, and intelligence. For companies, understanding and complying with relevant audit conditions and regulations not only helps avoid legal risks but also enhances corporate image and market competitiveness.