Want to Start a Company in Singapore? These Accounting and Audit Requirements You Must Know!

What You Must Know About Accounting and Auditing Requirements When Registering a Company in Singapore

In recent years, as the global business environment continues to evolve, more and more small and medium-sized enterprises SMEs and entrepreneurs have chosen to register companies in Singapore. As one of Asia’s most competitive business hubs, Singapore has attracted a large number of international investors due to its low tax rates, efficient services, stable financial environment, and robust legal system.

However, company registration is only the first step. What truly determines a company’s long-term and stable operation is compliant financial management and standardized accounting and auditing procedures. According to the requirements of the Accounting and Corporate Regulatory Authority ACRA, all companies registered in Singapore must comply with the relevant provisions of the Companies Act and the Income Tax Act, and carry out proper bookkeeping and annual audits. This means that regardless of a company’s size or whether it is profitable, it must fulfill its financial compliance obligations.

1. Bookkeeping The Foundation of Business Operations

In Singapore, corporate bookkeeping typically includes daily financial record-keeping, tax filings, and the preparation of financial statements. These seemingly basic financial tasks are, in fact, the barometer of business operations. They not only affect a company’s ability to accurately understand its financial position, but also directly impact the smooth execution of tax reporting and audit processes.

Recently, the Inland Revenue Authority of Singapore IRAS issued an update emphasizing that all businesses must ensure the authenticity and completeness of their financial data. This means that companies must retain complete transaction records during the bookkeeping process, including invoices, bank statements, contracts, and other original documents. These materials are not only important for internal management but also serve as the basis for tax authorities to verify a company’s tax compliance.

With the popularity of digital management, more and more Singaporean companies are using accounting software for financial processing. While this improves efficiency to some extent, it also places higher demands on the professional capabilities of financial personnel. Choosing the right accounting software, entering data correctly, and generating reports in a timely manner are all key elements of compliant business operations.

2. Auditing A Compliance Health Check for Your Business

According to Section 205 of the Singapore Companies Act, all qualifying companies must undergo an annual financial audit and submit audited financial statements to ACRA. Qualifying generally refers to whether a company is classified as an Exempt Private Company or a Small Company.

In 2025, Singapore updated the definition of a small company. Under the new criteria, a company may be classified as a small company if, in each of the past two financial years, its annual revenue does not exceed S$10 million, total assets do not exceed S$10 million, and it employs no more than 50 people. This classification exempts such companies from the annual audit requirement.

This policy undoubtedly reduces compliance burdens for SMEs and reflects support for startups. However, it’s important to note that even if a company qualifies for audit exemption, there are still situations where an audit may be required. For example, if a company plans to apply for a bank loan, introduce external investors, or prepare for listing, relevant institutions often require audited financial statements.

Even if audit exemption is available, companies should still maintain good financial records in preparation for unexpected needs.

3. Professional Services The Safety Belt for Compliance

For most entrepreneurs, bookkeeping and auditing are not their areas of expertise. Therefore, choosing a professional and reliable accounting firm or financial advisory service has become the top choice for many business owners in Singapore.

According to the 2025 Singapore SME Financial Services Market Report, over 70% of SMEs in Singapore outsource their financial management to professional institutions. This not only helps reduce operational costs but also ensures the professionalism and compliance of financial work.

When selecting a financial service provider, companies should focus on the following key points

1. Whether the provider holds qualifications recognized by ACRA and the Institute of Singapore Chartered Accountants ISCA;

2. Whether it has extensive industry experience and successful service cases;

3. Whether it can offer customized financial solutions tailored to the company’s development at different stages.

With the advancement of digital transformation, more financial service providers are offering value-added services such as cloud-based bookkeeping, automated report generation, and tax planning. The introduction of these technologies not only enhances service efficiency but also brings greater convenience to business financial management.

4. Common Misconceptions and Recommendations

Although Singapore’s financial regulatory system is relatively mature, many companies still fall into common misconceptions in practice. For example, some believe that if a company has no actual business operations, bookkeeping is unnecessary. Others mistakenly think that once the annual filing is completed, everything is settled.

These misconceptions often lead to risks such as fines or being placed on regulatory blacklists. To avoid these issues, it is recommended that companies establish standardized financial systems from the outset and receive regular professional training. At the same time, they should closely monitor policy updates issued by ACRA and IRAS to ensure ongoing compliance.

Conclusion

Registering a company in Singapore means entering a highly efficient, transparent, and well-regulated business environment. In this environment, compliant bookkeeping and auditing are not only legal obligations but also the cornerstone of sustainable business development. Only by valuing financial management can a company stand firm in the fiercely competitive market.