Type of Audit in Singapore
There are three fundamental audit types available in Singapore. Knowing them is vital before tapping into the audit services in Singapore.
Statutory Audit
A third-party auditor or auditing services in Singapore perform such an audit. They scrutinize companies for tax, financial, and accounting compliance within the purview of underlying law.
Rental Audit
Such an audit verifies companies with rental establishments, confirming if rental figures are legitimate against the agreement, boasting a public accountant’s attestation.
Charity Audit
This type of audit verifies if charity organizations and philanthropic entities comply with the IPCs’ rules and IMCs guidelines.
A Closer Look at Auditing Requirements for Singapore’s Firms
Every newly incorporated firm in Singapore must appoint an accountant or an accounting firm to oversee its auditing affairs within 3 months of incorporation. It is critical to note that the ACRA’s approval is a mandate for auditors or auditing firms.
ACRA stands for Accounting and Corporate Regulatory Authority. It is a statutory board that falls under the aegis of the Ministry of Finance of the Government of Singapore. ACRA governs business registration, corporate service providers, financial reporting, and public accountants.
It is noteworthy that auditing is no longer applicable to entities that fall under the “Small Company” or “Small Group” category. Adherence to two out of three quantitative criteria is vital for entities to qualify for such a category. These include:
- Total annual income does not exceed S$10 million
- Total gross assets amount to less than S$10 million
- The total workforce spans employees less than or equal to 50
A Brief Outlook on Singapore Auditing Standards IFRS and SFRS
IFRS, i.e., International Financial Reporting Standards, boasts accounting rules that provide a framework for organizing and reporting financial information. It guides companies in managing their financial reporting process effectively within the underlying standards.
IFRS aligns with the International Accounting Standards Board (IASB), which provides an accounting framework used by over 120 nations. It enables companies to reinforce transparency, uniformity, and consistency in financial reporting.
On the other hand, Singapore primarily relies on the Singapore Financial Reporting Standard (SFRS), which is based on the IFRS. Adherence to SFRS is mandatory for companies with financial periods starting on or after January 1, 2003.
