Audit exemption Singapore
Keeping up with changes in company rules helps business owners stay compliant and avoid penalties. In Singapore, one important rule is the Audit exemption Singapore. This rule decides which companies must have their accounts audited and which ones don’t need to.
Recent updates have changed how this rule works. In this blog, we explain these changes in simple terms. We also share what you should check when running a company in Singapore and how these updates can affect your costs, including the Singapore company registration cost.
Understanding Audit Exemption in Singapore
1. What is Audit Exemption:
- Audit exemption means a company does not need to get its financial statements checked by a licensed auditor every year. This rule saves time and money for smaller firms that don’t have complex accounts.
2. Why It Exists:
- The rule allows small businesses to focus on growth without facing the high cost of audit services. However, companies still need to keep good records and prepare financial reports.
Previous Audit Exemption Rule (Before Update)
Earlier, Singapore companies could avoid audits if they met the following:
- Were privately limited
- Had no corporate shareholders
- Stayed under two of these limits for the past two years:
- Total revenue: not more than S$10 million
- Total assets: not more than S$10 million
- Number of employees: not more than 50
This set of conditions created a “small company” group that enjoyed audit-free status.
Latest Changes to Audit Exemption (2024 Update)
The most recent updates bring clarity and structure to the rule. The goal is to help smaller companies while making sure larger ones meet the correct financial checks.
Here are the key changes:
1. Revised Threshold Period
- Companies now need to meet the threshold only for the last financial year, not for two straight years as before. This gives faster access to exemptions for new or growing companies.
2. Consolidated Group Rule
- If a company is part of a group (parent and subsidiaries), the exemption applies only if the whole group meets the size rule.
- So, even if your company is small but your parent company is large, you may not qualify for exemption.
3. Broader Definition of Revenue
- Revenue now includes both operating and non-operating income, such as rental or investment earnings. This wider definition affects whether a company crosses the revenue cap.
4. Late Filing Restrictions
- If a company submits reports late more than once, it may lose the right to apply for audit exemption in the future. This move encourages better reporting habits.
New Size Limits: Still the Same Numbers
Even with changes in rules, the core numbers that define a “small company” remain the same:
| Size Condition | Limit Value |
| Total Revenue | Not more than S$10 million |
| Total Assets | Not more than S$10 million |
| Number of Employees | Not more than 50 |
A company needs to meet any two out of the three above to qualify.
Impact of These Changes on Businesses
1. For Small and Growing Firms
- The rule change to a single-year test means new businesses may enjoy audit exemption sooner. This helps lower early-stage costs and allows more focus on operations.
2. For Group Companies
- Groups need to review their full structure to see if they still qualify. Some firms may lose audit-free status if their parent or sister companies exceed the limits.
3. For Firms with Non-Standard Income
- Income like rental or interest now affects audit status. A company that previously qualified may now go over the limit. You’ll need to review revenue breakdowns closely.
4. For Late Filers
- Missing filing deadlines repeatedly can remove exemption rights. This raises the need to stay alert on filing schedules and prepare early each year.
Singapore Company Registration Cost and Audit Needs
Starting a company in Singapore includes various one-time and yearly costs. The audit requirement—or lack of it—can change the total spend.
Here’s a table to help:
| Item | Estimated Cost (SGD) |
| Company name approval | Free |
| Company registration (one-time) | 315 |
| Registered address | 200 – 400 per year |
| Filing annual return | 60 – 300 (if outsourced) |
| Preparing unaudited financials | 600 – 1,200 |
| Audit services (if required) | 2,000 – 5,000+ per year |
Companies that qualify for audit exemption save thousands every year. This makes the exemption rule a key part of planning overall Singapore company registration cost.
Who Should Monitor These Changes?
Every business owner should know if they qualify for exemption. But for these roles, it’s even more important:
- Finance managers: to plan budgets
- Accountants: to prepare reports properly
- Company secretaries: to track filing deadlines
- Start-up founders: to reduce early-stage costs
How to Stay Compliant?
Here are tips to make sure your company meets the latest rules:
1. Keep Clear Records
- Even if your company does not need an audit, you must still prepare full accounts. This means keeping invoices, receipts, payroll info, and all bank records in order.
2. File on Time
- Late reports can hurt your future exemption chances. Always aim to file your annual return well before the deadline.
3. Check Revenue Sources
- Classify income correctly. Check if rental, dividends, or other sources push your revenue above the limit.
4. Review Group Links
- If your company is in a group, make sure you understand how other companies affect your audit status.
Benefits of Audit Exemption
Skipping the audit helps in many ways:
- Lower cost: Save on annual fees
- Faster reporting: No need to wait for audits
- Flexibility: Easier to manage reporting
- Fewer penalties: Less chance of mistakes in audit process
But keep in mind—exemption doesn’t mean you can skip good bookkeeping. Poor records can still lead to problems with tax or funding.
Risks of Not Understanding the Rule
Ignoring audit exemption rules can lead to:
- Fines for late or wrong filing
- Costly audits if wrongly claimed
- Trouble with investors or banks
- Poor financial planning
Many small firms miss updates. Checking once a year can avoid all these problems.
How to Prepare for the Next Year
Changes may continue as rules adjust to fit modern business needs. To stay ready:
- Schedule a yearly compliance check
- Ask your accountant to review the audit status
- Keep software or tools to track revenue and staff size
- Set alerts for filing deadlines
Planning makes your business stronger and saves money.
Conclusion
The recent updates to Audit exemption Singapore rules help many small companies save money and work faster. At the same time, these rules push for better reporting and smart business records. If your company meets the updated conditions, you can avoid audits and focus on growth.
But these rules come with details—group rules, new income types, and deadlines all play a part. So make sure you review your numbers each year.
In a place like Singapore, where rules stay clear and fair, the key to success lies in knowing the updates and using them well. Whether you’re starting a new company or growing a current one, knowing how exemption works can make your journey smoother—and keep your Singapore company registration cost in check.
