Appointing a Company Auditor in Singapore: Requirements, Small Company Exemption & Process (2026)

Every Singapore company has a statutory obligation to appoint an auditor — unless it qualifies for the small company audit exemption. Getting this right matters: failing to appoint an auditor within the prescribed timeframe is an offence under the Companies Act (Cap. 50), and directors of non-compliant companies can face personal fines.

This guide walks through who must appoint an auditor, who is exempt, how to make the appointment, what auditors do, and what the consequences of non-compliance are. It also reflects the updates introduced by the Corporate and Accounting Laws (Amendment) Act 2025 (CALA 2025), which commenced on 6 May 2026.

The Statutory Obligation: Section 205 of the Companies Act

Section 205 of the Companies Act requires every company to appoint an auditor unless the company is exempt from audit. The default position is that all Singapore-incorporated companies must have an auditor. The exemption is the exception, not the rule — and directors who assume their company is exempt without verifying the criteria are taking a compliance risk.

The auditor’s role is to provide an independent opinion on whether the company’s financial statements give a true and fair view of the company’s financial position and results, and comply with the Companies Act and Singapore Financial Reporting Standards.

Who Must Appoint an Auditor?

All Singapore-incorporated companies that do not qualify for the small company or small group audit exemption must appoint a registered public accountant or a registered public accounting firm as their auditor. This includes:

• Listed companies (all sizes);
• Companies in regulated industries where MAS, MOM, or other regulators require audited accounts regardless of size (e.g., licensed financial institutions, fund managers, employment agencies above certain thresholds);
• Companies that are subsidiaries of a listed entity (in most cases);
• All companies that do not qualify as small companies or small groups under the criteria described below.

The Small Company Audit Exemption

Under Section 205B of the Companies Act, a private company that qualifies as a small company in a financial year is exempt from the requirement to have its financial statements audited for that year. The small company criteria are assessed over two consecutive financial years — a company must meet at least two of the three quantitative criteria in each of the two immediately preceding financial years.

The Three Criteria

A company qualifies as a small company only if it is a private company throughout the relevant financial year. Public companies — regardless of size — cannot claim the small company exemption.

For Groups: The Small Group Exemption

Where a company is a subsidiary within a corporate group, the audit exemption is assessed at the group level under Section 205C. A company qualifies only if the group as a whole meets at least two of the three criteria across both financial years. Even a very small subsidiary may not qualify if it is part of a large group.

Important Limitations on the Exemption

The audit exemption does not apply where:

• The company is required by the terms of a debenture, loan covenant, or contractual agreement to have its accounts audited;
• Shareholders holding at least 5% of the company’s issued voting shares require an audit by written notice given at least one month before the end of the financial year;
• A regulator (e.g., MAS, MOM) has imposed an audit requirement as a condition of a licence or approval.

Companies should review their financing agreements and shareholders’ agreements carefully — lenders and investors sometimes include audit requirements as standard covenants even for small companies.

How to Appoint a Company Auditor in Singapore

Timing of First Appointment

For a newly incorporated company that is required to appoint an auditor, the directors must make the appointment within three months of incorporation (Section 205(3)). This is a hard deadline. If the directors fail to act within three months, ACRA may, on application by any member, appoint an auditor on the company’s behalf — and the directors commit an offence and may be fined.

For a company that was previously exempt (as a small company) but no longer qualifies, the directors must appoint an auditor before the financial statements for the non-exempt year are signed.

Eligibility Requirements for Auditors

An auditor must be:

• A public accountant registered with ACRA under the Accountants Act 2004; or
• A registered public accounting firm (i.e., a partnership or limited liability partnership of registered public accountants).

The auditor must not be disqualified by virtue of a conflict of interest, personal relationship with a director or officer, or other prohibition under the Companies Act. The company secretary will typically verify the auditor’s registration and independence before the board resolution is passed.

The Appointment Process

The first appointment of an auditor is made by a board resolution of the directors. Shareholder approval is not required for the first appointment, though subsequent appointments (i.e., at the AGM) must be approved by members if the company holds an AGM.

The board resolution should record:

• The name and ACRA registration number of the appointed auditor;
• The effective date of appointment;
• The remuneration agreed or the basis on which it will be determined;
• A confirmation that the auditor is not disqualified from acting.

Subsequent appointments are typically made or ratified by shareholders at the Annual General Meeting (AGM) under Section 205(1). In a private company that has dispensed with the AGM requirement, the appointment may be ratified by written resolution instead.

Duration of Office and Rotation

An auditor holds office from appointment until the conclusion of the next AGM (or the equivalent event for companies that have dispensed with AGMs). Reappointment is the norm in Singapore — unlike some jurisdictions, there is no statutory mandatory audit firm rotation for private companies. However, good corporate governance practice, and the requirements of some regulated industries, may call for periodic rotation reviews.

Removal and Resignation of an Auditor

An auditor may be removed before the expiry of their term by ordinary resolution of shareholders, but the process requires special procedural safeguards under Section 205(5) — the auditor must be given prior written notice and the right to make representations to members. This is to protect auditor independence and prevent companies from removing auditors simply because they are raising inconvenient findings.

If an auditor wishes to resign mid-term, they must comply with Section 205(8) and give written notice to the company and ACRA, explaining the reasons for resignation. Auditors cannot simply walk away — the resignation requirements are designed to ensure that issues prompting an auditor departure are disclosed and recorded.

What Happens If You Fail to Appoint an Auditor?

Failure to appoint an auditor within the required timeframe is an offence under Section 205(6). The consequences include:

• The company and every officer in default may be fined;
• ACRA may appoint an auditor on behalf of the company, and the company must pay the auditor’s remuneration as determined by ACRA;
• The company’s annual return filing may be delayed if audited financial statements are required and have not been produced.

From 6 May 2026, CALA 2025 enhanced ACRA’s enforcement capabilities for a range of corporate compliance matters, including auditor appointment obligations. Directors should treat the three-month deadline as a hard deadline, not a guideline.

CALA 2025 Changes Affecting Audit Requirements

The Corporate and Accounting Laws (Amendment) Act 2025 introduced several changes relevant to audit requirements:

• Enhanced audit committee requirements for certain classes of companies;
• Clarified duties of auditors in relation to reporting to ACRA on certain types of non-compliance;
• Revised penalties for non-compliance with audit and financial statement obligations.

Companies that were borderline on audit exemption eligibility should re-verify their status for financial years ending after 6 May 2026.

Practical Tips for Directors

• Do not assume exemption: If your company is new or has grown rapidly, verify the small company criteria before each financial year. Exceeding a threshold in two consecutive years triggers the audit requirement.
• Check your contracts: Financing agreements and shareholder agreements may require audited accounts irrespective of company size.
• Make the appointment early: For new companies, appoint an auditor within the first month of incorporation — do not leave it to the three-month deadline.
• Keep the company secretary informed: Your company secretary should track the auditor appointment as part of the annual compliance calendar. For guidance on Singapore company compliance deadlines, refer to our annual compliance calendar.

If you need legal advice on your audit and compliance obligations, we can point you in the right direction.

For the latest Singapore business news and regulatory updates, there are useful resources for directors navigating their compliance obligations.

Beyond corporate compliance, sound financial planning and investment decisions are equally important for business owners and directors.

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