🇸🇬 Statutory Audit in Singapore: The Definitive Guide to ACRA Compliance and Choosing the Right Audit Firm

🇸🇬 Statutory Audit in Singapore: The Definitive Guide to ACRA Compliance and Choosing the Right Audit Firm | Bestar

Audit & Assurance Singapore Guide

🇸🇬 Statutory Audit in Singapore: The Definitive Guide to ACRA Compliance and Choosing the Right Audit Firm

The annual financial audit is a cornerstone of corporate governance and regulatory compliance in Singapore. Mandated by the Companies Act, the audit process ensures the credibility and fairness of a company's financial reporting.

For business owners—especially those managing fast-growing SMEs—understanding the requirements set by the Accounting and Corporate Regulatory Authority (ACRA) and strategically selecting a reputable audit firm Singapore is crucial for success, cost management, and future growth.

This comprehensive guide breaks down the essential compliance criteria, explains the audit process, and provides a clear framework for selecting an audit partner that drives value beyond simple sign-off.

1. Understanding Singapore's Statutory Audit Requirements

The Mandatory Obligation

Under the Singapore Companies Act, every private company must appoint an auditor within three months of incorporation, and unless specifically exempted, must have its financial statements audited annually. This is known as the Statutory Audit.

The core objective of this audit is for an independent Public Accountant to:

1. Express an opinion on whether the financial statements present a true and fair view of the company's financial position.

   
   

2. Confirm that the statements comply with the Singapore Financial Reporting Standards (SFRS).

The Role of ACRA

ACRA is the primary regulatory body overseeing company registration, financial reporting, and compliance in Singapore. An auditor must be a Public Accountant registered with ACRA. Non-compliance with ACRA’s filing and audit requirements can result in significant penalties, fines, and even prosecution of the company's directors.

2. Key Criteria for Audit Exemption in Singapore

One of the most important compliance areas for SMEs is determining eligibility for the audit exemption, which significantly reduces regulatory burden and cost.

Since 2015, the eligibility framework for private companies is based on the "Small Company" concept.

The Small Company Criteria

A private company is exempt from the statutory audit if it qualifies as a "Small Company." To meet this definition, the company must satisfy at least two of the following three quantitative criteria for the immediate past two consecutive financial years (FYs):

Criterion	Threshold
Total Annual Revenue	S$10 million
Total Assets	S$10 million
Total Number of Employees	50 (full-time employees)

💡 Note for New Companies: A newly incorporated company (or one in its first financial year) may be required to get audited, as it won't have the two consecutive years of historical data to meet the exemption criteria yet.

The Small Group Criteria (For Subsidiaries)

If your company is part of a larger corporate group (a parent company with subsidiaries), the exemption rules become stricter. A subsidiary can only qualify for audit exemption if the entire group qualifies as a "Small Group."

The Small Group must meet at least two of the three quantitative criteria above on a consolidated basis for the immediate past two consecutive FYs.

What is Required if Exempted?

Even if your company qualifies for the audit exemption, the obligation for proper financial oversight does not disappear. You are still required to:

• Prepare Unaudited Financial Statements (UFS): These must still comply with SFRS.

  
  

• Maintain Proper Accounting Records: Directors must ensure books are kept accurately and ready for any potential ACRA or IRAS (Inland Revenue Authority of Singapore) review.

  
  

• File Annual Returns (AR): The UFS must be filed alongside the AR with ACRA within seven months of the company's Financial Year End (FYE).

3. How to Choose the Right Audit Firm in Singapore

Selecting an auditor is a strategic business decision, not just a procurement exercise. A high-quality Audit Firm Singapore provides assurance, mitigates risk, and offers value-added insights.

Here are the critical factors to consider:

A. Professional Credentials and ACRA Approval

• Public Accountant Registration: The firm or individual must be a Public Accountant registered with ACRA. This is the non-negotiable legal baseline.

  
  

• CA (Singapore) Certified: Ensure the audit team consists of qualified Chartered Accountants of Singapore (CA Singapore) who adhere to the highest professional standards.

  
  

• SFRS Expertise: They must have deep knowledge of the latest Singapore Financial Reporting Standards and relevant international standards (IFRS).

B. Industry Experience and Specialisation

The best auditors understand the specific risks and norms of your sector.

Industry	Why Specialisation Matters
Tech/Startups	Expertise in revenue recognition for subscriptions (SaaS) and capitalisation of development costs.
Construction	Knowledge of accounting for long-term projects (percentage-of-completion method) and government tenders.
Trading/Retail	Experience with inventory valuation, foreign currency transactions, and gross turnover audits.

Ask potential firms: Do you have case studies or clients in my specific industry, and are you familiar with its unique compliance challenges?

C. Transparency, Communication, and Value

• Clear Fee Structure: The engagement letter should clearly state the scope, deliverables, and total fees. Avoid firms with unrealistically low initial quotes that may result in high hidden charges later.

  
  

• Proactive Communication: The firm should be highly responsive and able to explain complex accounting matters in a clear, understandable way.

  
  

• Beyond Compliance: A great auditor acts as a business advisor, using the audit process to identify weaknesses in internal controls, recommend process improvements, and highlight potential risks before they escalate.

D. Technology Adoption

In a modern audit, technology is essential. Choose a firm that uses digital tools for:

• Efficient Data Collection: Secure portals for document exchange.

  
  

• Data Analytics: Using software to analyse large data sets, leading to more targeted and efficient audit testing.

  
  

• Seamless Filing: Expertise in the mandatory XBRL (eXtensible Business Reporting Language) filing format for ACRA.

4. The Value of Assurance: More Than Just Compliance

While statutory compliance is the immediate goal, a professional assurance engagement delivers significant strategic value:

• Enhanced Credibility: An independent audit opinion boosts confidence for external stakeholders, including banks, investors, and potential partners. This is crucial when seeking financing or entering joint ventures.

  
  

• Stronger Internal Controls: Auditors often provide management letters outlining weaknesses in your company's financial processes, helping you prevent fraud and errors.

  
  

• Investment Readiness: Having clean, audited accounts is a prerequisite for any due diligence process during a capital raise, merger, or acquisition.

Conclusion and Next Steps

Navigating the regulatory landscape of Audit & Assurance in Singapore is a critical annual task. Whether you qualify for the small company exemption or require a full statutory audit, maintaining accurate financial records and engaging the right partner is paramount.

By choosing an experienced, ACRA-registered audit firm that understands your industry, you ensure compliance, manage risk, and gain valuable business insights that support your company’s long-term growth trajectory in Singapore and beyond.

Ready to ensure your company meets all ACRA requirements and gains strategic insights from your next audit?

Contact our team today for a confidential assessment of your audit needs and a tailored consultation on our financial and statutory compliance services.

The Bestar Advantage: Your Partner for ACRA Compliance & Value-Added Statutory Audit in Singapore

🇸🇬 Statutory Audit in Singapore: The Definitive Guide to ACRA Compliance and Choosing the Right Audit Firm

Navigating Singapore's corporate compliance landscape, particularly the mandatory Statutory Audit, is a critical challenge for businesses, from growing SMEs to complex multinational corporations. While the law mandates an independent audit for non-exempt companies, the value of the process lies in choosing a firm that offers more than just sign-off.

Bestar Singapore, as an ACRA-registered Public Accounting Corporation (PAC), provides comprehensive and integrated audit and assurance services designed to ensure strict ACRA compliance while delivering strategic insights for risk mitigation and business growth.

Here is a breakdown of how Bestar can specifically help your business through the statutory audit process, fulfilling the requirements outlined in the "Definitive Guide to ACRA Compliance."

1. Ensuring Flawless ACRA Statutory Audit Compliance

Bestar's primary function is to act as your registered Public Accountant, ensuring your company adheres to all legal requirements under the Singapore Companies Act and the Accounting and Corporate Regulatory Authority (ACRA).

Compliance Area	How Bestar Helps	The Bestar Advantage
Statutory Audit Execution	Provides an independent audit opinion on whether your financial statements present a true and fair view and comply with the Singapore Financial Reporting Standards (SFRS).	Utilizes an efficient, risk-based methodology to ensure a timely and non-disruptive audit process.
Audit Exemption Eligibility	Conducts a precise assessment to determine if your company (or group) meets the "Small Company" criteria for audit exemption for the required two consecutive financial years.	Offers advisory on proper documentation and record-keeping even if exempt, preparing for potential ACRA reviews.
Filing & Reporting	Manages the preparation and timely submission of audited financial statements, Annual Returns (AR), and other corporate records to ACRA.	Expertise in the mandatory XBRL (eXtensible Business Reporting Language) filing format, ensuring accurate and seamless electronic submissions.
Corporate Governance	Reviews adherence to the Companies Act regarding director duties, internal controls, and corporate secretarial practices that directly impact audit risk.	Integrated Services: Seamlessly coordinates with Bestar's Corporate Secretarial team to ensure consistency and compliance across all regulatory filings.

2. Value-Added Assurance Beyond Compliance

Bestar focuses on turning the audit from a mandatory obligation into a strategic review. The audit process is used as a foundation to assess the health of your operational and financial control environment.

• Risk Mitigation and Internal Controls: Bestar assesses your existing internal controls, identifying weaknesses in your financial systems (e.g., cash management, inventory tracking, accounts receivable). The firm provides actionable recommendations to strengthen these controls, directly helping prevent fraud and financial errors.

  
  

• Operational Efficiency: Insights gathered during the audit can highlight bottlenecks or inefficient processes in your accounting and operations workflow. Bestar advises on best practices for financial management, leveraging their expertise across multiple client industries.

  
  

• Tax Efficiency Coordination: By integrating the audit with Bestar's Tax Advisory services, they can ensure that financial statements are finalised only after considering all legal tax planning opportunities and compliance requirements, leading to maximum tax efficiency.

3. The Comprehensive "Integrated Business Support" Model

What sets Bestar apart as a strategic partner is its ability to offer a full spectrum of professional services under one roof, creating synergy and eliminating the risks associated with using multiple disjointed providers.

Bestar Service Area	Link to Statutory Audit Value	Benefit for Your Business
Accounting & Bookkeeping	Ensures source data is accurate, compliant with SFRS, and audit-ready from day one, significantly reducing audit time and cost.	Cleaner financials mean a faster, less stressful, and more cost-effective audit process.
Corporate Secretarial	Manages key statutory deadlines, resolutions, and corporate changes that must align with the audit and Annual Return filing.	Zero Compliance Gaps between your corporate records, financial statements, and ACRA filings.
Business Advisory	Provides strategic advice based on financial analysis and risk profiling identified during the audit (e.g., due diligence, valuation).	Turns audit findings into strategic growth opportunities and prepared documentation for investors or banks.
Specialised Audits	Offers expertise in highly regulated sectors, such as Fund Management Companies (FMCs), where additional assurance and regulatory returns to the Monetary Authority of Singapore (MAS) are required.	Ensures compliance with specific financial sector regulations, which go beyond standard ACRA compliance.

Partnering with Bestar Singapore means leveraging a team of experienced Chartered Accountants and business advisors who are committed to ensuring your statutory obligations are met accurately, on time, and strategically—allowing you to focus on the core mission of growing your business in Singapore.

Need an ACRA-registered audit firm that delivers both compliance and business insights?

Connect with Bestar Singapore today for a consultation on your statutory audit needs.