Singapore Company Auditing
In Singapore, not all companies are required to have their financial statements audited. There's a concept of a "small company" that qualifies for an audit exemption.
Audit Exemption Criteria
A company is exempt from audit if it meets at least two of the following three criteria for the immediate past two financial years:
Total annual revenue of S$10 million or less
Total assets of S$10 million or less
Number of employees of 50 or less
Who Needs an Audit
Companies that don't meet the exemption criteria above are required to appoint a public accountant registered with the Accounting and Corporate Regulatory Authority (ACRA) to audit their financial statements annually.
Additional Points
Even exempt companies must still prepare and file their annual financial statements.
ACRA may conduct spot checks on any company's financials.
Shareholders with 5% or more voting rights can request an audit even for exempt companies.
Here's some more information on Singapore company auditing:
Types of Audits
Statutory Audit: This is the most common type of audit required for companies that don't qualify for exemption. It's an independent review of a company's financial statements to ensure they comply with accounting standards and fairly represent the company's financial position.
Internal Audit: This is an optional audit conducted by a company's internal audit department. It focuses on evaluating internal controls, risk management practices, and adherence to company policies and procedures.
Tax Audit: This is conducted by the Inland Revenue Authority of Singapore (IRAS) to verify a company's tax filings and calculations.
Choosing an Auditor
Look for a public accountant registered with ACRA who specializes in your industry and company size.
Consider the auditor's experience, reputation, and fees.
Get references and check their qualifications.
The Audit Process
The auditor will plan the audit scope and procedures.
They will request access to the company's accounting records, financial statements, and other relevant documents.
The auditor will perform tests and procedures to assess the accuracy and completeness of the financial statements.
They will communicate any findings and recommendations to the company's management.
The audit report will be issued, expressing an opinion on whether the financial statements are fair and accurate.
Additional Considerations
The cost of an audit can vary depending on the company's size, complexity, and chosen auditor.
Even exempt companies may benefit from a voluntary audit for increased transparency and stakeholder confidence.
Resources
For more information on Singapore company auditing, you can refer to the Accounting and Corporate Regulatory Authority (ACRA) website: ACRA Singapore Audit Exemption
Accounting and Corporate Regulatory Authority (ACRA): ACRA Singapore Audit Exemption
Institute of Singapore Chartered Accountants (ISCA): ISCA Singapore https://isca.org.sg/
Sources
How Bestar can Help
Bestar can play a vital role in a company's financial health and well-being in several ways:
Ensuring Accuracy and Transparency:
Statutory Audits: Bestar provides independent verification of a company's financial statements. This assures investors, creditors, and other stakeholders that the financial information is reliable and presented fairly.
Error Detection: Through testing and analysis, Bestar can identify errors or misstatements in financial records. Early detection can prevent problems from snowballing and allows for corrective measures.
Risk Management and Internal Controls:
Risk Assessment: Bestar can help assess the risks faced by a company, such as fraud, waste, or inefficiency. This awareness allows management to put safeguards in place to mitigate these risks.
Internal Controls Evaluation: A strong internal control system helps ensure adherence to policies, safeguards assets, and promotes accurate financial reporting. Bestar can evaluate the effectiveness of these controls and recommend improvements.
Improved Decision-Making:
Financial Insights: Beyond just compliance, Bestar can provide valuable insights and recommendations based on our analysis of financial data. This can help management make informed decisions about resource allocation, investments, and overall business strategy.
Additional Benefits:
Increased Credibility: Having a clean audit report from a reputable auditor can enhance a company's credibility and attract investors and business partners.
Fraud Deterrence: The knowledge that an audit will be conducted can deter fraudulent activities within a company.
Bestar performs statutory audits required by regulations or for public companies. We have no vested interest in the company and provide an objective assessment.
By leveraging Bestar's expertise, companies can gain valuable insights, improve financial practices, and make informed decisions that contribute to long-term success.
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