The Companies Act (the Act) was amended in 2003 to exempt certain companies from the audit requirements. Exempt private companies whose accounting year commencing from 15 May 2003 and with an annual revenue of $2.5 million (S$5 million from 1 June 2004) or below are eligible for audit exemption.

We advise that although you may be exempted from the audit requirement your statutory duties under the Act remain unchanged. You are still required to maintain proper accounting records, prepare and present financial statements which comply with the Act and the Singapore Financial Reporting Standards. In short you are required to prepare directors’ report, balance sheet, profit and loss account, statement of changes in equity, cash flow statement and notes to financial statements as before except that no audit need be carried out.

The Inland Revenue Authority of Singapore also issued a circular advising corporate tax payers to file their tax returns accompanied by unaudited financial statements that fully comply with the Singapore Financial Reporting Standards. Failure to comply may result in the rejection of the tax returns lodged. Penalties may be payable if the subsequently reviewed accounts are not prepared on time.

In view of the above you may wish to continue to avail yourself of the benefits of an audit. Alternatively you can use our “Review” service at a lower cost.

By Audit we perform our work in accordance with Singapore Standards on Auditing which consist of a series of formal standards. By Review we will ensure that your financial statements will have complied with the Act and the Singapore Financial Reporting Standards although no audit is carried out.