Most Singapore private limited companies are exempt from the statutory audit requirement. But many directors are unsure whether their company qualifies for that exemption — or what changed when the Corporate and Accounting Laws (Amendment) Act 2025 (CALA 2025) commenced on 6 May 2026. This guide explains who needs a statutory audit in Singapore, how the small company exemption works, what CALA 2025 changed for companies that do require an audit, and how to prepare.
What Is a Statutory Audit?
A statutory audit is an independent examination of a company’s financial statements by an ACRA-registered public accountant or accounting firm. The auditor expresses an opinion on whether the financial statements present a true and fair view of the company’s financial position and comply with the Singapore Financial Reporting Standards (SFRS or SFRS for Small Entities, as applicable).
Under Section 201 of the Companies Act 1967, all Singapore companies are required to prepare financial statements. Under Section 205, companies that are not exempt must appoint an auditor and have their financial statements audited annually. The audit report forms part of the financial statements tabled at the Annual General Meeting and filed with ACRA as part of the Annual Return.
Who Is Exempt from Audit? The Small Company Test
A Singapore private company qualifies for audit exemption as a “small company” if it meets at least two of the following three criteria for 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 or fewer employees
This is the “two of three, two years in a row” test under Section 205C and the Thirteenth Schedule of the Companies Act 1967. A company that meets two of three criteria in both FY2024 and FY2025 qualifies for audit exemption from FY2025 onwards (assuming it was a private company throughout both years).
Importantly, the small company exemption is only available to private companies. Public companies, companies with public accountability (including those with securities listed on SGX or that hold assets for the public in a fiduciary capacity), and foreign companies registered in Singapore are not eligible.
New Companies and the “First Two Years” Rule
For newly incorporated companies, you need two consecutive years of financial history before you can conclusively establish small company status. However, a newly incorporated company that is clearly below all three thresholds in its first financial year may elect to apply the exemption from the outset, provided the directors have a reasonable basis to expect small company status will be maintained.
Small Group Exemption
If your company is part of a corporate group, the small company exemption does not apply on a standalone basis — the group must also qualify as a “small group”. A group qualifies if it meets at least two of the three small company criteria on a consolidated basis. This prevents large corporate groups from structuring themselves to push subsidiaries below the individual audit threshold.
For a detailed walkthrough of the audit exemption criteria and common disqualifying factors, see our Singapore Audit Exemption 2026 guide.
What CALA 2025 Changed for Companies That Need an Audit
For companies that do require a statutory audit, CALA 2025 introduced one significant change: the named auditor requirement.
With effect from 6 May 2026, every audit report must identify by name the individual public accountant (PA) primarily responsible for the audit engagement. Previously, the report could be issued in the name of the accounting firm alone. Now, the responsible PA must be named on the report itself.
The practical implications for companies and their company secretaries are as follows:
- When appointing or reappointing your auditor, the engagement letter should now specify the name of the PA who will sign the audit report, not just the firm
- Before the audit report is tabled at the AGM, verify that the named PA’s details appear correctly on the report
- If the responsible PA changes during an engagement (for example, due to resignation or extended leave), the company and audit firm must document the change and notify the board
- For ACRA’s Annual Return filing purposes, ensure that the audit report filed reflects the named PA correctly — an audit report without a named PA may be queried by ACRA
ACRA is also conducting a formal review of the S$10 million audit exemption thresholds in 2026, noting that average company asset values and revenues have grown considerably since the thresholds were set in 2015. An upward revision of the thresholds — which would exempt more companies — is possible but has not been confirmed as at the date of this article.
Who Must Appoint an Auditor and When?
Every Singapore company that is not audit-exempt must appoint an auditor within 3 months of incorporation. If the company becomes audit-exempt at a later stage (because it qualifies under the small company test), it may then pass a resolution to remove the auditor.
Auditors are typically appointed or reappointed at the Annual General Meeting. If the AGM is dispensed with (a common practice for small private companies in Singapore), auditors must be reappointed by written resolution of the members within 6 months of the financial year end.
Only public accountants or accounting firms registered with ACRA under the Accountants Act 1987 may act as company auditors. A director, company secretary, or employee of the company cannot serve as its auditor.
Audit Timeline and Annual Filing Obligations
For companies that require an audit, the following timeline applies for a standard 31 December financial year end:
| Milestone | Deadline |
|---|---|
| Financial year closes | 31 December |
| Auditor completes audit and issues audit report | Typically March–April |
| AGM held (if applicable) | Within 6 months of FYE (by 30 June) |
| Annual Return filed with ACRA | Within 30 days after AGM (or within 30 days of 5 months after FYE for AGM-exempt companies) |
| Corporate tax return (Form C or Form C-S) filed | By 30 November of the following year |
For a full compliance calendar including all ACRA and IRAS filing deadlines, see our Singapore Company Compliance Calendar 2026. For guidance on XBRL filing requirements (which apply to companies filing financial statements with ACRA in digital format), see our XBRL Filing with ACRA guide.
How to Choose an Auditor for Your Singapore Company
Choosing an auditor is not merely a compliance checkbox. A good auditor adds value by identifying accounting errors, providing comfort to investors and bankers, and flagging emerging financial risks. When selecting an auditor, consider:
- ACRA registration: Confirm the firm and the proposed engagement partner are registered with ACRA as public accountants or an accounting corporation
- Industry experience: An auditor familiar with your industry understands sector-specific accounting issues and can complete the engagement more efficiently
- Capacity and responsiveness: Smaller firms may offer more partner-level attention; larger firms have deeper specialist resources but may be slower to respond to SME clients
- Fee transparency: Audit fees should be agreed in writing before the engagement begins. Scope creep and additional charges are a common pain point — ensure the engagement letter covers what is and is not included
Statutory Audit and the Singapore Financial Reporting Standards
The auditor will audit the financial statements against the applicable financial reporting standards. For most Singapore private companies, this is either SFRS (full Singapore Financial Reporting Standards, aligned with IFRS) or SFRS for Small Entities (SFRS for SE), a simplified framework available to small entities that are not publicly accountable.
The choice of reporting framework affects both the preparation effort and the audit scope. SFRS for SE is generally less demanding than full SFRS, particularly for areas such as financial instruments, leases under SFRS(I) 16, and segment reporting. For a foundation-level overview of Singapore financial reporting standards, see our SFRS basics guide.
If you need legal advice on audit-related disputes or concerns about audit independence, specialist counsel can assist. For the latest Singapore accounting and regulatory news, there are useful resources for directors and company secretaries. Beyond statutory compliance, sound financial management remains the foundation of a healthy business.
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
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