How to Prepare for a Singapore Company Audit Report Key Steps Tips You Need to Know

How to Prepare an Audit Report for a Singapore Company Key Points and Procedures You Need to Know

Running a company in Singapore-whether local or foreign-involves annual legal obligations, including financial audits and submitting reports to relevant authorities. An audit report is not only a financial health check for your business, but also a key document that regulators, investors, and partners rely on to understand your actual operations. For many small and medium-sized enterprises SMEs, preparing a compliant and accurate audit report can be a complex and challenging task.

This article outlines the essential points and procedures for preparing an audit report in Singapore, incorporating recent business developments and regulatory changes.

1. Basic Requirements for an Audit Report

Under the Companies Act and guidelines from the Accounting and Corporate Regulatory Authority ACRA, all companies registered in Singapore are required to undergo a financial audit each fiscal year-unless they qualify for exemption, such as small private companies.

The core components of an audit report include

Financial statements balance sheet, income statement, cash flow statement

Auditor’s opinion

Notes and disclosures

The auditor must express an opinion on whether the financial statements are true, fair, and prepared in accordance with Singapore Financial Reporting Standards SFRS or International Financial Reporting Standards IFRS.

2. Preparations Before the Audit Begins

a. Organize Financial Records

Before the audit starts, ensure all financial documents are complete and accurate. These include

Bank statements

Invoices and receipts

Payroll records

Fixed asset lists

Tax filings

Using accounting software like Xero or QuickBooks can help streamline data management and improve audit efficiency.

b. Reconcile Accounting Records

Perform a full reconciliation of accounts to ensure accuracy. Pay particular attention to areas like accounts receivable, accounts payable, and inventory. Clear any long-standing unsettled accounts in advance.

c. Communicate with Your Auditor

Choosing the right audit firm is crucial. Start early communication with your auditor to understand their process and required documents. With rising compliance standards in Singapore, many companies now prefer working with experienced local audit firms to ensure a smoother process.

3. Overview of the Audit Process

a. Initial Assessment and Planning

Auditors will evaluate your business model, financial structure, and internal controls to develop an audit plan. This includes testing your financial systems to identify any risk of material misstatement.

b. On-site Audit and Document Review

Auditors will conduct on-site inspections, including checking source documents, verifying assets, and confirming bank balances. While remote audits have become more common due to digital transformation, key steps still require physical verification.

c. Issuance of the Audit Report

After the audit, the auditor will issue a report. The possible outcomes include

Unmodified clean opinion - the best result, indicating financial statements are fairly presented

Modified opinions qualified, adverse, or disclaimer of opinion

4. Submission and Post-Audit Matters

a. Submitting to ACRA and IRAS

Once the audit is complete, the company must submit the audited financial statements and Annual Return to ACRA within 7 months after the Annual General Meeting AGM. At the same time, audited financial reports must also be submitted to the Inland Revenue Authority of Singapore IRAS as part of tax filings.

b. Addressing Audit Findings

If the report includes a qualified, adverse, or disclaimer opinion, company management should investigate the root causes and take corrective actions. In recent years, Singapore regulators have increased their focus on financial transparency-negative audit opinions can affect credit ratings and access to financing.

5. Recent Trends and Recommendations

Singapore continues to strengthen corporate compliance and transparency. For example, in 2025, ACRA enhanced its scrutiny of submitted financial statements, and some companies were required to redo their audits due to non-compliance.

With the growing importance of ESG Environmental, Social, and Governance reporting, investors are increasingly looking at non-financial disclosures. Companies should consider integrating ESG-related information into their audit reports.

Here are some recommendations

Plan your audit timeline early to avoid last-minute stress

Choose a reputable and experienced audit firm

Strengthen internal financial controls to improve data accuracy

Stay updated on regulatory changes and adjust compliance strategies accordingly

Conclusion

Preparing a compliant and accurate audit report is not only a legal obligation but also a foundation for building trust and unlocking business opportunities. With proper planning, thorough preparation, and professional collaboration, companies can smoothly complete the audit process and lay a solid groundwork for future growth.