FAQs About Audits

In this article, we’ll go over some frequently asked questions about Audits, and how you can better prepare for them.

What is the purpose of an audit?

The purpose of an external audit is to get an objective, neutral 3rd-party to determine if the company’s financial statements represent a true and fair view of the company’s financial position, operations and cash flow as prescribed by accounting standards.

What is the difference between an audit performed by one of the big 4 firms versus a small accounting firm?

There are a few differences between an audit performed by a big 4 firm versus a small accounting firm.  Fees are generally higher when engaging a big 4 firm, while small firms offer a closer working relationship that can lead to more personalised, practical audit solutions.

How do I tell if an auditor is certified?

According to ACRA regulations, only a registered public accountant or an ACRA-approved accounting entity can provide an audit opinion on financial statements.

What are the different types of audits provided by SCS?

We provide statutory, sales and MCST audit services. Statutory audits are required by Singapore law. Sales audits help retailers negotiate a fair price for their rental and MCST audits ensure compliance with the Building Maintenance and Strata Management Act (BMSMA).

How do I tell if my company is exempt from audit requirements?

Dormant companies or small companies in a group are exempt from audit requirements.

Dormant companies are defined as a company that has not engaged in business activity since its registration.

Small companies in a group are exempt from audit requirements if they meet two of the following criteria for two consecutive financial years:

• The group does not have more than 50 employees
• The group’s accounts do not have a revenue higher than 10 million
• The group’s assets do not exceed 10 million

When do I need to file my annual returns?

Companies must file annual returns within five months (for listed companies) or seven months (for non-listed companies) after the financial year ends.

Newly incorporated companies must file their annual returns within 18 months from registration.

Must I appoint an auditor for my annual filing?

Yes, only private limited companies do not need to appoint an auditor for their annual filing.

Do I still need to file my annual returns even if I am exempted from audit?

Yes, you will still be required to file your annual financial statements even if your company is exempted. However, they do not need to be officially audited.

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