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When a Firm Does Not Need to be Audited
CPA Clinic 2: Does my company need to be audited?
All companies need to be audited except for:
a) An exempt private company (EPC) with annual revenue of up to $5 million or less for financial years with effect from 1 June, 2004 (or $2.5 million or less for financial years between May 15, 2003 and before 1 June 2004); and
b) *A company, including an EPC, that is dormant for the financial year starting on or after 15 May 2003.
An EPC is a private company where no beneficial interest is held directly or indirectly by any corporation in its shares and which has not more than 20 members or shareholders.
Audit exemption removes the statutory burdens and costs on smaller businesses and provides an efficient and pro-business environment for small businesses.
The profit and loss accounts or consolidated accounts and balance sheet do not have to be audited and copies of an auditor’s report do not have to be presented at the annual general meeting.
However, the Accounting and Corporate Regulatory Authority (Acra) may require the company to submit audited accounts and the auditor’s report if the authority believes that there has been a breach of Section 199 of the Companies Act (relating to accounting records and system of control) and section 201 of the Companies Act (relating to the accounts and director’s reports) of the Act; or it is otherwise in the public interest to do so.
For more information, go to the Institute of Certified Public Accountants of Singapore website: www.icpas.org.sg or visit www.icpasresearch.org.sg for more online resources.
(CPA Clinic is joint initiative between ICPAS and The Straits Times. It features a monthly column in the Money section dispensing tips and advise relating to small medium enterprises. This article first published in The Straits Times on 14 October 2009.)
* Information corrected as at 9 November 2009.
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