Singapore’s audit exemption framework has been under formal review since early 2026 — and the outcome could meaningfully affect thousands of small and medium-sized companies across the island. ACRA opened targeted industry consultations in March 2026, with the feedback period closing on 17 April 2026. As of the date of publication, ACRA has not yet published its response. The outcome is expected in the second half of 2026.

This creates a period of uncertainty for companies sitting near the current thresholds. Should you plan for an audit? Should you hold off? This guide explains what the review is about, what changes are likely, and — critically — what your company should be doing right now while waiting for the final word.

What Is the Audit Exemption and Who Currently Qualifies?

Under Section 205C of the Companies Act 1967, a Singapore private company qualifies as a “small company” — and is therefore exempt from statutory audit — if it satisfies at least two of the following three criteria in each of the two most recent consecutive financial years:

  • Annual revenue of S$10 million or less
  • Total assets of S$10 million or less
  • 50 employees or fewer

This framework has been in place since 1 July 2015. The thresholds have remained entirely unchanged in the eleven years since. If you are unsure whether your company currently qualifies, our earlier guide on Singapore’s small company audit exemption walks through the eligibility test in detail.

Why Is ACRA Reviewing the Framework Now?

ACRA’s stated rationale is straightforward: the S$10 million revenue and asset thresholds have not been updated since July 2015. Over the past decade, average company revenues and asset values have grown considerably, meaning more companies now fall just above the old thresholds than was originally intended.

Comparable jurisdictions have raised their thresholds: the UK is now £10.2 million (approximately S$18.5 million), Australia A$25 million (~S$22 million), and New Zealand NZ$12 million (~S$11 million). Singapore’s S$10 million threshold — set over a decade ago — is conservative by regional and global standards.

What Is ACRA Specifically Examining?

Based on ACRA’s public announcement on the review of the audit exemption framework, the consultation examined three main questions:

1. Should the S$10 Million Revenue and Asset Thresholds Be Raised?

This is the central question. Given inflation, economic growth, and international benchmarks, the question is not whether the thresholds should rise, but by how much. Industry feedback and international comparisons suggest an upward revision is the likely outcome.

2. Should the 50-Employee Headcount Test Be Adjusted?

The 50-employee threshold is also under review. Critics have noted that this criterion can produce anomalous results — a labour-intensive business with modest revenues could be caught by the headcount test even though its financial scale is genuinely small. ACRA is examining whether this criterion should be raised, removed, or restructured.

3. Are There Other Framework Changes That Would Better Target the Exemption?

ACRA has also invited broader suggestions. Some industry respondents have called for inflation-indexing of thresholds going forward, so that the framework does not fall behind economic reality again.

What Is the Likely Outcome?

While no official outcome has been published, the direction of travel is clearly upward. ACRA’s own framing of the review — emphasising compliance cost reduction and international benchmarking — points to higher thresholds. Most industry observers expect the announcement in the second half of 2026. Directors and company secretaries should monitor ACRA’s website for the formal announcement.

Note also that even if thresholds are raised, certain companies have strong commercial reasons to commission a voluntary audit — for bank loan facilities, investor due diligence, grant applications, or government tenders. The audit exemption is a right, not an obligation.

What Should Companies Do Right Now?

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

You are the primary intended beneficiary of this review. Before assuming you will qualify once thresholds rise, take the following steps:

  • Document your current financial profile. Confirm your revenue and asset figures for the two most recent financial years. If you are above S$10 million but potentially below an anticipated new threshold (e.g. S$15–20 million), track ACRA’s announcement closely.
  • Talk to your auditors now. Review your audit engagement terms. Many audit contracts allow for termination with notice — but you need to know your contractual position before any framework change takes effect.
  • Do not stop the audit unilaterally. The current law remains in force until ACRA amends it. Companies that drop their audit prematurely could find themselves in breach of the Companies Act if the threshold revision is smaller than expected.

If Your Company Is Comfortably Below S$10 Million

The review does not change your current exempt status. However, now is a sensible time to review your governance and internal controls. Being exempt from audit does not mean your financial statements are beyond scrutiny — shareholders owning at least 5% of issued shares can still demand an audit. Also consider whether a voluntary audit adds commercial value for bank financing or investor due diligence purposes.

If Your Company Has a Group Structure

The group company rules mean that even a small subsidiary may lose the audit exemption if its parent or group fails the “large group” test. If the review raises thresholds, it is expected to affect both the individual company and group tests. Directors with group structures should confirm the position with their company secretaries once the outcome is published.

For All Companies: Stay Compliant in the Meantime

While the framework is under review, current obligations remain fully in force: keep proper accounting records under Section 199; prepare annual financial statements; file annual returns with ACRA on time — see the Singapore Company Compliance Calendar 2026; hold AGMs within the prescribed period — see our guide on AGM requirements for Singapore companies; and if required to file XBRL, do so within 30 days of the AGM — see our XBRL filing guide.

The Broader Regulatory Context: CALA 2025 and Director Accountability

The audit exemption review is happening against the backdrop of the Corporate and Accounting Laws (Amendment) Act 2025 (CALA 2025), which commenced on 6 May 2026 and significantly increased director accountability — raising maximum director fines to S$20,000 per offence and requiring individual public accountants to be named in audit reports.

The two developments are consistent: CALA 2025 raises the bar for auditors and directors of audited companies, while the audit exemption review ensures that genuinely small businesses are not burdened with full audit costs. Our article on CALA 2025 and what directors must do now covers those obligations in detail.

For the latest Singapore business news and regulatory updates, there are useful resources available to directors and company secretaries tracking these developments.

Beyond compliance obligations, sound financial planning and business investment decisions are equally important for business owners navigating a changing regulatory landscape.

Conclusion

ACRA’s review of the audit exemption framework is a sensible modernisation of rules that have not changed since 2015. The likely outcome is an upward revision of the S$10 million thresholds. The timeline for the formal announcement is H2 2026.

In the meantime, companies should maintain full compliance, document their eligibility, and be ready to act promptly once the outcome is published. If you need legal advice on your compliance obligations in the interim period, 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