Singapore’s audit exemption framework has been unchanged for over a decade. The S$10 million revenue and asset thresholds under Section 205C of the Companies Act 1967 — the gateway to the “small company” exemption — have stood since 1 July 2015. In February 2026, the Accounting and Corporate Regulatory Authority (ACRA) formally announced a review of that framework, and public consultations closed on 17 April 2026.

As of June 2026, ACRA has not yet published its response. Companies near the S$10 million threshold are in a familiar Singapore situation: regulatory change is coming, but the timing and scope remain uncertain. This guide sets out what the review is examining, what direction is likely, and — critically — what your company should be doing right now while you wait.

The Current Audit Exemption Framework: A Recap

Under Section 205C of the Companies Act 1967, a Singapore private company qualifies as a “small company” — and is therefore exempt from having its financial statements audited — if it satisfies at least two of three criteria for the two most recent consecutive financial years:

  • Total annual revenue not exceeding S$10 million
  • Total assets not exceeding S$10 million
  • Number of employees not exceeding 50

A company that is part of a group can only claim the exemption if the group as a whole also qualifies as a “small group” on the same criteria on a consolidated basis. This group test catches many companies that would individually qualify but are part of a larger corporate group.

Companies that do not qualify — typically those that exceed two of the three thresholds for two consecutive years — must appoint an auditor and have their financial statements audited annually. For companies just above S$10 million in revenue or assets, this represents a significant ongoing cost: a statutory audit for a Singapore SME typically runs from S$8,000 to S$30,000 or more per year, depending on complexity.

What ACRA Is Reviewing — and Why Now

ACRA’s February 2026 announcement identified two specific areas of review:

1. Whether the S$10 million revenue and asset thresholds remain appropriate. ACRA noted that average company revenues and asset values have grown considerably since 2015, and that these thresholds — which were calibrated to the economic environment of a decade ago — may now catch many companies that are substantively “small” in practical terms despite exceeding the numbers.

2. Whether subsidiaries should be able to qualify for exemption independently of their group’s consolidated figures. Under the current rules, a subsidiary with modest operations can lose its audit exemption simply because its parent or affiliated entities push the group above the threshold. ACRA is examining whether this is still the right approach, particularly for holding structures with operationally distinct subsidiaries.

The international context is relevant here. Singapore’s thresholds look low by comparison with comparable regimes: the United Kingdom raised its audit exemption threshold to £10.2 million in turnover (approximately S$18.5 million), Australia’s threshold sits at A$25 million turnover (approximately S$22 million), and New Zealand’s threshold is NZ$12 million revenue (approximately S$11 million). Malaysia has also increased its thresholds in recent years. The implication is that many companies currently required to be audited in Singapore would be exempt in peer jurisdictions.

For detailed background on the current small company criteria and how they apply, see our earlier guide on Singapore company audit exemption eligibility under Section 205C.

Where Things Stand in June 2026

ACRA ran targeted industry consultations in March 2026 and accepted written feedback until 17 April 2026. These were structured consultations with specific proposals, not an open-ended public call for comment. The presence of specific proposals suggests ACRA had a direction in mind before the consultation began.

No public response has been issued as of June 2026. ACRA has described the outcome as expected in the second half of 2026 — which means a response could come anytime between now and December. Given the targeted consultation format, the likely outcome is a package of statutory amendments requiring parliamentary time or a ministerial order, which may follow the consultation response by several months. Companies should not expect immediate operational changes even once ACRA publishes its conclusions.

What the Review Is Likely to Conclude

While ACRA has not pre-committed to any particular change, the signals are reasonably clear. ACRA explicitly highlighted the gap with international peer jurisdictions and noted that the thresholds have been static while the economy has grown. The consultation structure focused on the quantum of the thresholds rather than on whether a review was warranted at all.

The most widely anticipated outcome is an upward revision of the revenue and asset thresholds — most likely to somewhere between S$15 million and S$25 million, potentially with different figures for revenue and assets. An adjustment to the group test to allow qualifying subsidiaries to claim the exemption independently is also likely, particularly for holding companies with distinct operating subsidiaries.

It is less clear whether the employee headcount criterion (currently 50) will change. Employee numbers are a less direct measure of a company’s complexity than revenue or assets, and the threshold has attracted less commentary in the public discourse around the review.

Practical Steps for Companies Near the Threshold

1. Companies currently just above the S$10 million threshold

If your company’s revenue or total assets are between S$10 million and S$25 million, you are in the zone most likely to benefit from a threshold increase. While you cannot assume you will be exempt until the changes are formally enacted, you can begin internal groundwork now:

  • Obtain a detailed breakdown of your current audit costs from your auditor, including the time spent on statutory compliance work versus value-added advisory. This documentation will be useful whether you subsequently become exempt or choose to retain a voluntary audit.
  • Identify which aspects of the audit your bank, major customers, or investors actually rely on. Audit exemption is a statutory right, not an obligation. Some companies near the threshold will find that contractual or commercial requirements mean they will continue to appoint auditors even after becoming eligible for exemption.
  • Review the group test implications. If your company is part of a group, the threshold increase may not help unless the group also qualifies on a consolidated basis — or unless the group subsidiary exemption proposed by ACRA is adopted.

2. Companies well below the S$10 million threshold

The threshold change will not affect you in the short term. However, the review is also a useful prompt to ask a broader question: is your current approach to financial governance — whether that means a statutory audit, a compilation, a review engagement, or something else — the right fit for where the business is now?

Even companies that are clearly exempt from statutory audit can benefit from periodic engagement with a qualified accountant on internal controls, particularly as they scale. Audit exemption does not reduce directors’ duties around the preparation of true and fair financial statements under Sections 201 and 205 of the Companies Act.

3. Companies that are in or approaching a group structure

The potential change to the group test is particularly relevant for holding companies and investment structures. If you are setting up or restructuring a group now, document the rationale for your structure clearly — both for ACRA purposes and for potential future use if the subsidiary exemption is adopted. This is good practice regardless of how the review concludes.

Should You Continue Your Voluntary Audit Even If Exemption Is Possible?

Not every company that qualifies for exemption should take it. A statutory audit provides several benefits beyond compliance:

  • Banking and credit facilities: Many Singapore banks require audited accounts for SME loan applications, overdraft renewals, or invoice financing lines. Check with your relationship manager before assuming the bank will accept unaudited accounts.
  • Government grants and procurement: Some government grant schemes and public procurement tender requirements specify audited financials. The Enterprise Development Grant (EDG), for example, may require audited accounts for projects above certain thresholds.
  • Investor confidence: Companies raising funds from external investors, preparing for exit, or being assessed in due diligence will typically be expected to provide audited accounts, regardless of their statutory position.
  • Internal controls: The audit process identifies control weaknesses that internal management may not catch. For companies without a strong internal finance team, the audit acts as a quality control function on bookkeeping and financial reporting.

For a broader discussion of Singapore corporate compliance obligations, our Singapore company compliance calendar sets out all annual filing obligations in one place.

What to Monitor Going Forward

Watch ACRA’s news announcements page for the consultation response, expected in H2 2026. When it is published, the key questions to look for are:

  • The new proposed thresholds (revenue and total assets separately)
  • Whether the group subsidiary test is modified
  • The proposed effective date for any changes — this will determine which financial year companies first benefit from the new rules
  • Any transitional provisions for companies that have already appointed auditors for a current financial year

For the latest Singapore business regulatory updates, including ACRA announcements, there are useful resources for directors and company secretaries to follow as the outcome of this review approaches.

If you need legal advice on your company’s compliance obligations in the interim, 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