To reduce annual compliance burden on Singapore small companies, audit exemption has been applicable beginning on or after 1 Jul 2015.
Even though small company audit exemption only applies to Singapore incorporated companies, for the purposes of determining whether the group to which a company belongs is a small group, all entities within that group are taken into account, including foreign entities, in determining whether the consolidated total revenue and consolidated total assets of the group meet the thresholds. For a subsidiary to qualify for small company exemption, the group to which it belongs would have to qualify as a small group and fulfil the thresholds on a consolidated basis. In other words, even if the subsidiary is able to qualify as a small company, but the group to which it belongs is not a small group, it would not be able to enjoy the benefits of audit exemption.
Qualification Criteria for Small Company Audit Exemption
A company qualifies as a small company if:
- it is a private company in the financial year in question; and
- it meets at least 2 of 3 following criteria for immediate past two consecutive financial years:
- total annual revenue ≤ $10m;
- total assets ≤ $10m;
- no. of employees ≤ 50.
For a company which is part of a group:
- the company must qualify as a small company; and
- entire group must be a “small group”
to qualify to the audit exemption.
For a group to be a small group, it must meet at least 2 of the 3 quantitative criteria on a consolidated basis for the immediate past two consecutive financial years.
Where a company has qualified as a small company, it continues to be a small company for subsequent financial years until it is disqualified. A small company is disqualified if:
- it ceases to be a private company at any time during a financial year; or
- it does not meet at least 2 of the 3 the quantitative criteria for the immediate past two consecutive financial years.
Where a group has qualified as a small group, it continues to be a small group for subsequent financial years until it does not meet at least 2 of the 3 the quantitative criteria for the immediate past two consecutive financial years.
(Source: IRAS Singapore)
Accounting Services Provider Singapore
Contact your Accounting Services Provider Singapore if you need for information and guidance regarding audit exemption for small companies and other Singapore accounting services.