The tiny-Asian country of Singapore is a nerve centre for finance and international business in the Asia Pacific region. The state since its independence is always striving to improve the standards continually and has been successful in making Singapore a focal point for trade, commerce and business at the international level.
Singapore enjoys a strategic position in Asia, playing a vital role in handling the international shipping traffic through Straits of Malacca and serves as the focal point for businesses operating internationally. In terms of investment, Singapore is the destination for Asian investors attracting investment with a stable political scenario, robust legal structure, very low corruption, attractive tax system and transparent government that efficiently manages the country’s resources.
The country serves as headquarters for numerous global businesses, start-ups and Small Medium Enterprises (SME's) which capitalise on the competitive qualities and facilities that Singapore offers. In terms of finance and banking, major international banks, multi-national organisations and reputed financial institutions have their operations in Singapore to serve the growing need of the businesses in the country as extend their services to other players in the region.
What is Auditing?
Auditing is the process of assessing, ascertaining and analysing the methods regarding financial, operational, and strategic goals of an organisation. The audit serves as a tool to determine whether the processes, policies and principles are in conformity with the stated compliances of the country and aligns with the organisations' objectives.
Conformance and adherence to the regulatory norms, rules, and compliances according to the Singapore laws are crucial to the organisation's growth and development. These regulatory requirements and compliances in according to Singapore Company laws serve as the primary drivers behind the need to conduct auditing for a company registered in Singapore.
Usually, an audit is performed on an organisation by an independent, competent authority on the request of the company according to its requirements. After the audit is conducted in an organisation, the audit the team presents its findings and suggestions as an annual report to the organisation, it also assists the organisation in performing corrective actions, restructuring, and prepares effective practices, policies and plans for the future based upon the audit information & research. However, such kind of assistance is offered by the auditing service if only it is requested by the client organisation based on defined objectives.
How Can Auditing help your Business in Singapore?
Auditing is performed according to the requirement of the government compliances or can be conducted to assess and critically analyse the organisation's policy, practices, goals and strategies. The auditing process in a Singapore Company shall include auditing the organisations
- Financial statements
- Operational procedures
- Business practices
- Policies and frameworks
- Organisational principles
- Goals and strategic imperatives
When examining the above parameters of an organisation the auditors follow the auditing standards which are set by the governmental bodies in Singapore. The audit provides a clear view of the organisation from an outsider perspective to get a clear understanding of the organisation's procedures, practices etc. and ensure that the company abides and follows all the regulatory compliances according to the Singapore Corporate laws.
Types of Auditing in Singapore
The employees and stakeholder do internal audit within the organisation to assess and evaluate the company's finances or systems. These audits usually involve an internal team with an objective to evaluate and assess the organisation's internal processes, practices, norms, rules and regulations to determine whether the company is adhering to the compliances and follows the regulatory standards. Such internal audits offer excellent opportunities for self-improvement, but the team might lack the professional expertise in the auditing according to the compliances.
The external audits are carried out by independent, third-party professional auditing agencies and companies who are specially trained in assessing and evaluating the organisation based on different parameters. In addition to this, they assist the organisation in following the organisational compliance with the regulatory norms in Singapore.
Further, external auditing offers an impartial audit and analysis of the organisation in terms of deficiencies, irregularities in the organisation and provides best practices, suggestions and comments to the management to elevate the standards of the company.
Financial audits are one of the common forms of audit carried out in Singapore companies in order to submit the annual financial auditing reports to ACRA. The financial audit assesses the business's ability to make money, returns and generate wealth for their shareholders. Performing financial audits offers insights on the financial prospects of the business to the investors, shareholders and directors of the organisation.
4.Strategic, Operational and IT Audit
These kinds of audits are performed to assess the strategic, or operational and Information Technology assets of the organisation. These audits have become popular in recent years as the audits provide information on the processes, procedures, practices of the organisation and allow them to evaluate them. Furthermore, the IT audits are carried out to assess and evaluate the readiness, security and robustness of the organisation's IT infrastructure.
What are Auditing Services in Singapore?
Auditing is significant for businesses and industries; it is essential for organisations to maintain proper documents by thoroughly conducting auditing on the business finances, processes and statutory records. An auditing service offers a full range of auditing options for hire and carries out the auditing process using a team of professionally trained and qualified auditors. The auditing reports can be prepared according to the request of the client organisation according to the Singapore laws and regulations.
Legal and Regulatory Environment in Singapore
Singapore Companies Act
The Singapore Companies Act outlines the framework for financial reporting in Singapore. This law requires the maintenance of company accounts and requires all the companies registered in Singapore (except the exempt companies) to report their audited financial statements every year.
Accounting Framework in Singapore
According to the Accounting Standards Act, the Accounting Standards Council (ASC) is responsible for setting the accounting standards in Singapore. Singapore uses the Singapore Financial Reporting Standards (SFRS) as a reporting standard for companies registered in Singapore. The SFRS standards are fully converged with the International Financial Reporting Standards (IFRS) for foreign registered companies in Singapore listed in Singapore Stock Exchange. These standards are necessary to be followed by the companies registered in Singapore while preparing and reporting to the governmental agencies.
Auditing Framework in Singapore
The Institute of Singapore Chartered Accountants (ICSA) through its Auditing and Assurance Standards Committee (AASC) is responsible for setting the auditing standards in Singapore as a part of structuring and setting the suitable auditing regulations.
According to the Singapore Companies Act, all the companies registered and operating in Singapore are to be audited every year for submitting the annual reports to the Accounting and Corporate Regulatory Authority (ACRA). The auditing must be carried out according to the SFRS or SFRS (International).
However, there is an exemption criterion known as the "Audit Exemption of Small Companies" the companies falling under these categories are not required to prepare annual financial reports for submitting to ACRA. The exemption criteria include
- Yearly total revenue does not exceed SGD 5 million during the fiscal year
- Total assets for more exceed SGD 10 million as at financial year end
- Number of employees does not exceed 50 as at financial year end
- Dormant companies also do not require an audit
All other companies are expected to be audited following the Singapore Standards on Auditing (SSA) which are the ISA as issued by the International Auditing and Assurance Standards Board with minor modifications to reflect local legal requirements where appropriate.
What do we Offer?
We at Business Setup Worldwide offer a full range of auditing services to companies registered in Singapore and foreign companies operating in Singapore with complete adherence to the Singapore Standards, regulations and compliances. Contact us, for hiring our professional auditing services in Singapore.