All companies in Singapore are required to prepare and file their financial statements at the end of every financial year. To do so without delay or error, you need to ensure your company maintains proper records of all relevant supporting documents such as invoices, serially numbered receipts, income records, purchase and business expense records and other records of financial transactions related to your business in order to properly prepare your financial statements. A professional Singapore Accounting Bookkeeping Service can certainly become the affordable solution to companies that do not wish to house a finance personnel or team, as experienced and reliable outsourced bookkeeping professionals provide a complete range of cost and time efficient accounting services.
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If your company does not qualify for Audit Exemption from ACRA, here’s what you need to know about Approved Auditors and Audit Procedures.
Audit plays a vital role in the governance and oversight of companies, ensuring that good internal controls and risk management systems are in place. So who are the approved auditors in Singapore? Basically they must be registered public accountants. Only then can they be appointed to audit a company’s financial statements. To register as a public accountant with ACRA, the following documents are required:
- Prescribed experience as an auditor
- Prescribed qualification
- Prescribe continuing professional education
- Institute of Singapore Chartered Accountants (ISCA) membership
Approved auditors are responsible for a business’s audit opinion. They must ensure that audits are carried out per the Singapore Standards on Auditing (SSA) guidelines and requirements.
As for Audited Financial Statements, which are documents filed per IRAS and ACRA’s requirements, they are:
- Statement of the business’s financial transactions
- Statement of the business organisation
Approved auditors conduct a thorough audit and then submit it for review. Errors in financial records will be brought to attention.
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Audit Procedures are the methods, techniques and procedures that auditors execute to identify the objectives, scope, risk and approach of the audits they undertake, so that all risks and concerns are addressed.
Five kinds of audit procedures are generally used:
- Analytical Review is used to evaluate unexpected events or transactions, and also used for routine events or transactions, such as rationality of depreciation that’s registered in the financial statements, as expenses of depreciation occur and are calculated regularly.
- Enquiry is used to investigate the related management, to explain the issue found by the auditors. Sometimes it is also used to enquire about the process of business and how transactions are recorded.
- Observation is used to gather and understand the evidence of the audit, confirming the actions on the side of the client, such as client stock at the end of the year and whether it is properly accounted or not.
- Inspection is used to vouch for or verify the documents, and is most significant as more than half of the audit work requires the inspection of documents, such as invoices, as well as supporting documents, recorded in annual financial reports.
- Recalculation is used generally by the client to check for any discrepancy between the client’s and auditors’ work to ensure accuracy. The auditor can also re-execute the calculation of depreciation and evaluate the difference between the calculation of client and auditor or perform the calculation of the company’s monthly expenses and salary prepared by the finance department and payroll to assure that total salaries paid to the employees are right.
Contact VentureHaven Singapore today for a free consultation regarding bookkeeping, accounting or audit regulation in Singapore.