What Accounting Standards Should Singapore Company Audit Reports Follow? Detailed Explanation

Singapore, as an international financial center, has attracted numerous multinational and local companies to establish branches or headquarters there. With the increasing intensity of economic activities, the compliance and transparency of audit reports have become a crucial part of corporate operations. According to Singapore Financial Reporting Standards SFRS and International Financial Reporting Standards IFRS, companies must follow a series of strict regulations when preparing and disclosing financial statements.

In recent years, with changes in the global economic environment and enhanced regulatory requirements, the demands for corporate audit reports in Singapore have become stricter. In 2025, the Accounting and Corporate Regulatory Authority ACRA of Singapore issued a series of updated policies, further clarifying how companies should comply with relevant accounting standards in financial reporting. The Inland Revenue Authority of Singapore IRAS has also intensified its review of corporate tax compliance, emphasizing the authenticity and accuracy of financial information.

First, audit reports of Singapore companies must be prepared in accordance with Singapore Financial Reporting Standards SFRS. SFRS is formulated and published by the Accounting Standards Council ASC of Singapore, which is largely consistent with IFRS but has been appropriately adjusted based on local conditions. For listed companies, IFRS must be fully applied. For non-listed companies, they may choose between SFRS or IFRS, but consistency must be maintained.

Second, the preparation of audit reports must be carried out by qualified chartered accountants CA or auditors. According to ACRA regulations, all institutions providing audit services must obtain the appropriate license, and auditors must maintain independence to avoid conflicts of interest. In 2025, ACRA strengthened its review of auditor independence, particularly focusing on whether audit firms can remain objective and impartial when providing consulting services to the same client.

Additionally, Singapore companies must comply with relevant provisions of the Companies Act. This law sets clear requirements for financial reporting, shareholder equity, and board responsibilities. For example, companies must submit annual financial statements each year, accompanied by an audit opinion from an auditor. Failure to submit as required or making false statements may result in fines or even revocation of the business license.

In recent years, Singapore has continuously promoted corporate transparency and digital transformation. In 2025, ACRA introduced the e-Submission System, requiring all companies to submit financial reports and audit results through this platform. This initiative not only improved the efficiency of information processing but also enhanced the real-time monitoring capabilities of regulatory authorities over corporate financial conditions. ACRA also encouraged companies to adopt blockchain technology for data storage and sharing, to improve the security and traceability of financial data.

In practice, many Singapore companies choose to hire professional accounting firms to assist with audit work. These firms usually have extensive experience and can help companies understand complex accounting standards and ensure that reports meet the latest regulatory requirements. For example, the Big Four accounting firms-Deloitte, PwC, EY, and KPMG-all have branches in Singapore, offering comprehensive financial advisory and audit services to local businesses.

It is worth noting that although Singapore's accounting standards are aligned with international practices, there are still some unique aspects in certain areas. For instance, SFRS may differ slightly from IFRS in areas such as revenue recognition, asset impairment, and lease accounting. When choosing applicable standards, companies should carefully consider their business models and industry characteristics, and seek professional advice if necessary.

With the rise of ESG Environmental, Social, and Governance concepts, more and more Singapore companies are incorporating sustainability reports into their financial disclosures. Although it is not yet mandatory for all companies to disclose ESG information, ACRA and IRAS have repeatedly called on companies to enhance their social responsibility awareness and encourage voluntary disclosure of related information. This trend indicates that future audit reports may place greater emphasis on a company's long-term value and social impact.

In conclusion, the preparation and disclosure of audit reports for Singapore companies must strictly follow SFRS and IFRS, while complying with the Companies Act and other regulatory requirements. Companies should pay attention to the authenticity and transparency of financial information, choose professional audit institutions, and actively respond to regulatory changes. As Singapore continues to optimize its business environment, companies must constantly improve their compliance levels to remain competitive in the market.