ACRA Audit Exemption Review 2026: What Singapore Companies Should Prepare for While Awaiting the Outcome

In February 2026, the Accounting and Corporate Regulatory Authority (ACRA) announced that it is reviewing Singapore’s audit exemption framework — the first such review since the thresholds were set in 2015. Targeted industry consultations closed on 17 April 2026, and ACRA is expected to publish its response in the second half of 2026. But the consultation has closed without an announced outcome, leaving many companies — particularly those near the S$10 million threshold — in a position of genuine uncertainty.

This guide explains what the review covers, what the likely direction of change is, and — crucially — what Singapore companies should be doing right now while they wait.

The Current Audit Exemption Framework

Under Section 205C of the Companies Act (Cap. 50), a Singapore private company qualifies as a “small company” and is exempt from the statutory audit requirement if it meets at least two of the following three criteria for each of the two financial years immediately preceding the current financial year:

• Total annual revenue of not more than S$10 million
• Total assets of not more than S$10 million
• Total number of employees of not more than 50

Additionally, a company that is part of a group must satisfy the “small group” test — the group as a whole must meet the same two-of-three criteria on a consolidated basis.

Companies that qualify as small companies are not required to appoint a statutory auditor or have their accounts audited. They must still prepare financial statements for shareholders, but those statements need not carry an audit opinion.

For a detailed breakdown of who currently qualifies, see our Singapore company audit exemption 2026 guide.

Why Is ACRA Reviewing the Framework Now?

ACRA’s announcement cited two main reasons for the review:

1. Thresholds unchanged since 2015 — the S$10 million revenue and assets thresholds, and the 50-employee headcount test, have not been updated since they were introduced on 1 July 2015. Average company revenues and asset values have grown substantially since then due to inflation and business growth.
2. International benchmarking — comparable jurisdictions have progressively raised their audit exemption thresholds in recent years.

How Singapore Compares Internationally

Singapore’s current revenue threshold of S$10 million is the lowest among its key comparator jurisdictions. The international comparison strongly suggests that the likely direction of the review is upward.

What Is ACRA Specifically Examining?

The review focuses on two primary areas:

1. Whether the S$10 million revenue and assets thresholds remain appropriate given business growth and inflation since 2015
2. Whether subsidiaries of a large group should be able to qualify for audit exemption even if the group as a whole does not meet the small group test — a potential relaxation of the group-wide consolidation requirement

ACRA has not indicated what the new thresholds will be. Given the international benchmarks, an increase to around S$20–25 million in revenue and assets would bring Singapore broadly in line with Australia and the UK. Any increase to the headcount threshold (currently 50) is also plausible.

What Should Companies Do Right Now?

The absence of an announced outcome does not mean companies should do nothing. Here is a practical action plan calibrated to your company’s current position.

If Your Company Is Currently Above the S$10 Million Threshold

• Do not assume you will soon be exempt. The timing of the threshold increase and its implementation date are unknown. Continue with your statutory audit obligations until ACRA confirms any changes and the effective date.
• Assess what value your audit delivers beyond compliance. Many companies above the threshold find that an audit strengthens banking relationships, supports grant applications (some Enterprise Singapore grants favour audited accounts), and provides comfort to minority shareholders. Even if you become exempt, you may choose to retain the audit voluntarily.
• Model the cost savings of exemption. Statutory audit fees for companies with S$10–20 million in revenue typically range from S$15,000 to S$50,000 per year. Knowing your potential saving helps management plan.
• Do not terminate your audit firm engagement yet. Wait until ACRA publishes confirmed thresholds and effective dates before making any changes to your audit arrangements.

If Your Company Is Currently Below the Threshold (Already Exempt)

• Maintain proper internal controls regardless. Audit exemption does not reduce a director’s duty to maintain accurate accounts and records. The standard under Section 199 of the Companies Act remains unchanged.
• Consider whether a voluntary audit serves your interests. If your company is seeking bank financing, entering a partnership with a large counterparty, or preparing for a potential sale or external investment, audited accounts may carry more weight than unaudited compilations — even if an audit is not legally required.
• Ensure your accounts preparation process is robust. Without an audit requirement, the discipline of periodic external scrutiny can be lost. Work with your accountant to implement quarterly management account reviews at minimum. See our Singapore compliance calendar for filing deadlines.

If Your Company Is Part of a Group

• Watch for changes to the subsidiary exemption rules. The possibility that subsidiaries may qualify for audit exemption even if the group does not is potentially significant for group structures where smaller subsidiaries are currently required to be audited solely because of the group-level consolidation test. Review your group structure against this possibility.
• Map out which subsidiaries would become exempt under various threshold scenarios. This allows group finance to plan audit fee savings and assess the governance implications for each entity.

Even If You Become Exempt, Director Duties Do Not Change

This point warrants emphasis. Audit exemption removes the external audit requirement — it does not remove any of a director’s duties under the Companies Act. Directors of exempt companies remain fully responsible for:

• Ensuring the company maintains proper accounts and records (Section 199)
• Preparing financial statements that give a true and fair view (Section 201)
• Lodging financial statements with ACRA where required
• Ensuring the company can pay its debts as they fall due (solvency)

The CALA 2025 changes effective 6 May 2026 have also quadrupled personal fines for director breaches. If anything, the stakes for maintaining proper financial governance have risen — regardless of whether your accounts are audited.

What to Watch For

ACRA is expected to publish a consultation response or public announcement on the audit exemption review before the end of 2026. When it does, the announcement will specify:

• The new thresholds (if increased)
• The effective date of any changes
• Whether subsidiary exemption rules are being relaxed, and under what conditions

Monitor ACRA’s news announcements at acra.gov.sg for updates. Our team will publish a follow-up guide as soon as ACRA releases its response.

For the latest Singapore business news and regulatory updates, there are useful resources for directors and business owners.

Conclusion

The ACRA audit exemption review signals a welcome acknowledgement that Singapore’s regulatory framework must keep pace with the economic reality of its business community. The likely direction is a meaningful increase in thresholds that will relieve a significant number of companies from the cost and administrative burden of a statutory audit.

But while the outcome is awaited, the correct posture for companies near the threshold is one of informed preparation rather than premature action. Review your current position, model the scenarios, and keep your audit obligations current until ACRA confirms any change.

If you need [legal advice on your compliance obligations](https://www.justfollowlaw.com) as you navigate this period of regulatory transition, we can point you in the right direction.

To speak with the team at Raffles Corporate Services, you can email [email protected] or call, SMS, or WhatsApp +65 8501 7133. We are happy to assist with any queries.

— The Editorial Team, Raffles Corporate Services