Survival Strategies for S$10M Revenue Companies Under Singapore's Audit Regime

Translation

In the current global economic environment marked by increasing uncertainty, businesses are facing increasingly complex challenges. This is especially true in Singapore-a country highly dependent on foreign trade and with an economic structure dominated by small and medium-sized enterprises SMEs. For companies with annual revenues reaching tens of millions of Singapore dollars, how to maintain stable growth under a strict auditing regime has become a focal point for industry players.

Singapore is renowned worldwide for its transparent and efficient financial regulatory system, and its auditing framework reflects similarly high standards and rigorous requirements. According to regulations set by the Accounting and Corporate Regulatory Authority ACRA, all registered companies must submit annual financial reports as required under the Companies Act and undergo independent audits. For enterprises with annual revenues exceeding S$10 million, compliance pressure becomes particularly significant. While these companies enjoy greater market opportunities, they also bear heavier compliance obligations.

1. Challenges from Rising Compliance Costs

In recent years, with the strengthening of global anti-money laundering AML and know-your-customer KYC policies, audit standards in Singapore have continued to rise. In early 2025, the Monetary Authority of Singapore MAS issued new regulations requiring all financial institutions and large enterprises to strengthen internal control processes and conduct more stringent due diligence on third-party service providers. While this move has enhanced overall financial system stability, it has also increased operational costs-particularly for mid-sized firms undergoing rapid expansion.

The full implementation of International Standards on Auditing ISA in Singapore has further complicated financial reporting. For instance, the adoption of IFRS 15 Revenue from Contracts with Customers and IFRS 16 Leases requires companies to disclose significantly more information in their financial statements. This places higher demands not only on the expertise of internal finance teams but also on the coordination with external audit firms.

2. Digital Transformation A Key Strategy to Address Audit Pressures

Faced with increasingly demanding audit requirements, more and more Singaporean companies are turning to technology to enhance financial efficiency and compliance capabilities. Cloud-based accounting platforms such as Xero and QuickBooks have already gained widespread adoption locally, enabling automated bookkeeping, real-time data updates, and risk alerts. These tools help reduce human error and provide auditors with traceable data trails.

At the same time, some leading companies are adopting artificial intelligence AI and blockchain technologies to streamline audit procedures. For example, Ernst Young EY has partnered with several Singaporean firms to develop blockchain-based smart contract systems that automatically verify transaction records, thereby improving audit efficiency and reducing manual intervention.

3. Building Professional Teams and Strengthening External Collaboration

Beyond technological solutions, cultivating a finance and audit team with international experience and professional competence is critical for sustaining growth among companies with revenue in the tens of millions. Many firms are now hiring auditors or consultants with backgrounds in the Big Four accounting firms to assist in developing compliance strategies and identifying potential risks in advance.

Collaboration between companies and external audit firms is also evolving. Previously, audits were often seen as an annual routine task. Today, however, more companies prefer to establish long-term partnerships with audit firms, adopting a strategic advisory model. This approach not only enhances audit quality but also enables companies to receive more forward-looking financial insights.

4. Flexible Business Restructuring to Avoid Risk Concentration

To better adapt to the pressures of the audit regime, some companies are restructuring their business models to diversify risk. For example, separating core operations from ancillary activities by establishing multiple subsidiaries instead of operating as a single legal entity can effectively isolate legal liabilities and allow for more precise financial management across different business units.

Additionally, export-oriented companies are actively expanding into regional markets to reduce overreliance on specific countries or customer segments. Such a diversified strategy not only strengthens resilience against external shocks but also lays a solid foundation for future financing and potential stock market listings.

Conclusion

In today’s increasingly complex global economic landscape, Singaporean companies with annual revenues exceeding S$10 million must address audit-related challenges through coordinated efforts in compliance, technology, and management. Only by continuously refining internal governance structures, proactively embracing digital transformation, and maintaining strong partnerships with professional service providers can these firms thrive in Singapore’s highly regulated business environment.