The appointment and removal of auditors is one of the most important governance decisions a Singapore company’s directors and shareholders make. It is also an area where procedural errors are common, and where the consequences — ranging from ACRA regulatory action to shareholder disputes — can be severe. This guide sets out the legal framework and practical steps for getting this right.

Which Singapore Companies Need an Auditor?

Not every Singapore private limited company is required to have its financial statements audited. Following the audit exemption framework under the Companies Act, a company qualifies as a “small company” and is exempt from audit if it is a private company and meets at least two of the following three criteria for the preceding two financial years:

  • Annual revenue not exceeding S$10 million
  • Total assets not exceeding S$10 million
  • No more than 50 employees

A company that is part of a “small group” may also qualify for exemption. However, a company that does not meet the small company criteria — or that is part of a group that does not qualify as a small group — must appoint an auditor and have its financial statements audited annually.

Even where a company qualifies for the small company audit exemption, certain stakeholders (such as a major bank lender or investor) may contractually require audited accounts. Directors should check their shareholders’ agreement, any financing covenants, and any regulatory requirements applicable to their sector before assuming the exemption applies in practice.

First Appointment of an Auditor

For a newly incorporated Singapore company that is required to have an auditor, the first auditor must be appointed by the directors within three months of incorporation. This is a statutory obligation under Section 205 of the Companies Act. The auditor so appointed holds office until the first Annual General Meeting (AGM).

If the directors fail to appoint the first auditor within this window, the company or any member may apply to ACRA for the appointment to be made. This is a regulatory failure with potential consequences for the directors.

Appointment at the AGM

After the first appointment, auditors are routinely appointed or re-appointed at each AGM. The resolution to appoint or re-appoint auditors is a standard ordinary resolution, requiring a simple majority of votes cast. Shareholders may also use the AGM to appoint a different auditor from the one currently serving, or to approve an increase in the auditor’s remuneration.

The appointed auditor must be a Public Accountant or an Accounting Corporation within the meaning of the Accountants Act — that is, registered with the Accounting and Corporate Regulatory Authority. Directors should verify that any proposed auditor holds a valid Public Accountant registration before putting the appointment resolution to shareholders.

Casual Vacancy in the Office of Auditor

If the auditor’s office falls vacant between AGMs — for example, because the auditor resigns, becomes insolvent, or ceases to meet the eligibility requirements — the directors may appoint a replacement auditor to fill the casual vacancy. This replacement holds office until the next AGM, at which point shareholders will vote on whether to confirm the appointment or appoint a different firm.

Removal of an Auditor

Removing an auditor before the expiry of the current term is a more procedurally demanding process than appointment. Under Section 205(6) of the Companies Act, an auditor may be removed by ordinary resolution at a general meeting — but there are several important procedural requirements:

  1. Special notice is required. The member(s) proposing the removal must give the company at least 28 days’ written notice of the intention to move the removal resolution.
  2. The company must notify the auditor. Immediately on receiving the special notice, the company must send a copy to the auditor proposed to be removed.
  3. The auditor has the right to make representations. The auditor may submit written representations to the company, requesting that these be circulated to members. Unless the court otherwise permits, the company must circulate these representations with the notice of the meeting. The auditor also has the right to speak at the meeting on the removal resolution.
  4. ACRA must be notified. The removal of an auditor must be reported to ACRA via BizFile+ within a prescribed period. Your corporate secretary should handle this filing.

These procedural safeguards exist to protect auditor independence. An auditor who is raising concerns about the company’s accounts or governance should not be easily removed by directors who prefer a less challenging audit relationship. Courts have intervened in cases where removal appeared designed to suppress legitimate audit concerns.

Resignation of an Auditor

An auditor who wishes to resign must do so in compliance with the Companies Act. The auditor must deposit a notice of resignation at the company’s registered office, accompanied by a statement setting out whether there are any circumstances connected with the resignation that should be brought to members’ or creditors’ attention, or a statement that there are none.

Where the resigning auditor believes there are such circumstances, the company must circulate the statement to all members within 21 days. The auditor may also requisition a general meeting at which to explain the circumstances of the resignation.

Changing Auditors: Practical Considerations

While directors cannot unilaterally change auditors (this requires shareholder approval), they can recommend a change. Common reasons for recommending a change of auditor include:

  • Fee competitiveness: the existing auditor’s fees have grown significantly
  • Service quality: the company has outgrown its auditor’s expertise or capacity
  • Independence concerns: a conflict of interest has arisen
  • Audit quality review: the company’s board or audit committee has identified concerns about audit quality
  • Change of group structure: a new parent company requires alignment with its auditor network

When recommending a change, directors should ensure the outgoing auditor is properly notified and given the opportunity to exercise the rights described above. Attempts to engineer a change of auditor by circumventing these rights can expose the company and its directors to legal challenge.

What Directors Must Not Do

Directors have specific duties in relation to audit that cannot be delegated:

  • They must not obstruct the auditor’s right of access to the company’s books, records, and personnel
  • They must ensure the auditor receives all information and explanations requested
  • They must not provide false or misleading information to the auditor
  • They must not attempt to unduly influence the audit findings or the auditor’s report

Obstruction or deception of an auditor is a criminal offence under the Companies Act, with penalties including fines and imprisonment. Following the Corporate and Accounting Laws (Amendment) Act 2025 (CALA 2025) which commenced on 6 May 2026, penalties for corporate governance breaches have been significantly increased.

The Corporate Secretary’s Role

The company secretary plays a key operational role in auditor appointment and removal. Specifically, the secretary should:

  • Track the auditor’s term and ensure re-appointment is placed on the AGM agenda in time
  • Draft the ordinary resolution for auditor appointment or re-appointment
  • Handle the ACRA filings required upon appointment, change, or removal of auditor
  • Circulate any special notices or auditor representations to members in the required timeframe
  • Maintain the statutory records reflecting the current auditor appointment

A professional corporate service provider who is an ACRA-registered filing agent will ensure all filings are made accurately and on time, reducing the risk of regulatory penalties.

Conclusion

Appointing and removing auditors in Singapore is a structured legal process with specific timelines, notice requirements, and filing obligations. Directors who treat it as a rubber-stamp exercise risk procedural errors that can expose the company to regulatory action and shareholder challenge. With the right corporate secretary and a clearly maintained compliance calendar, the process should be straightforward — but it requires attention to detail at every stage.

If you need assistance with auditor appointment filings, AGM preparation, or any aspect of your company’s statutory compliance, you can contact Raffles Corporate Services at [email protected] or +65 8501 7133 via WhatsApp.

— The Editorial Team, Raffles Corporate Services