- Private companies meeting 2 of 3 ACRA size tests for 2 years are exempt from audit
- Groups must also pass the same test on a consolidated basis, overseas entities included
- Companies under two years old qualify on the current financial year alone
- Exempt companies still prepare unaudited accounts and file with ACRA and IRAS
A Singapore private company qualifies for audit exemption if it meets at least 2 of 3 criteria for the immediate past two consecutive financial years: annual revenue of S$10 million or less, total assets of S$10 million or less, and no more than 50 employees. If the company belongs to a group, the group must also meet at least 2 of these 3 criteria on a consolidated basis. Newly incorporated companies are assessed based on their current financial year.
To get audit exemption, Singapore private companies must qualify as a small company by meeting at least two of three criteria for the immediate past two consecutive financial years: revenue of S$10 million or less, total assets of S$10 million or less, and 50 or fewer full-time employees. If the company belongs to a group, the whole group must also meet two of the three on a consolidated basis.
Exempt companies still file unaudited financial statements with ACRA. If you’d rather not handle that yourself, Sleek’s accountants can prepare your unaudited financial statements and file them for you.
Does your company need an audit?
Your company does not need a statutory audit if it is private and passes the small company test below; if it fails, it must appoint an ACRA-registered public accountant to audit its accounts. These are the requirements for Singapore audit exemptions under the ACRA audit exemption criteria:
| Criterion | Threshold | Measured how |
|---|---|---|
| Total annual revenue | S$10 million or less | Revenue for the financial year, per the financial statements |
| Total assets | S$10 million or less | Total assets at the end of the financial year |
| Employees | 50 or fewer full-time employees | Headcount at the end of the financial year |
You need to meet at least two of the three for the immediate past two consecutive financial years. ACRA treats newly incorporated companies (less than two years old) differently: a new company qualifies in its first financial year if it is private and meets two of the three criteria in that year. If it doesn’t, it checks again on the same basis in its second year.
By default, every Singapore company must have its financial statements audited each year. In practice, most small and medium businesses do not, because they fall under an exemption.
There are two main routes. The small company exemption under Section 205C covers private companies that meet the size test. A separate exemption under Section 205B covers dormant companies, regardless of whether they are private; see our guide to dormant company rules.
If you qualify, you file unaudited financial statements instead of audited ones. Being exempt does not mean you skip financial statements or annual filing altogether. It only removes the external audit step, and we cover what you still owe further down.
What does “small company” mean under the Companies Act?
A small company is a private company that meets at least two of ACRA’s three size criteria for the immediate past two consecutive financial years. The small company concept came into force on 1 July 2015, for financial years starting on or after that date.
Before then, only an exempt private company with annual revenue of S$5 million or less was exempt from audit. That older S$5 million rule no longer decides audit exemption. The small company test replaced it and is broader, which is why thousands more SMEs now qualify.
To be a small company, two things must be true. First, your company must be private in the financial year in question. Public and listed companies are never eligible, whatever their size.
Second, it must meet at least two of the three quantitative criteria in the table above for the last two consecutive financial years.
The two-of-three test, explained
In plain terms: you only need to pass two of the three tests, not all three. A company with revenue above S$10 million can still qualify if its total assets and headcount are both within their limits. The two criteria you pass must hold for both of the last two financial years, so a single unusual year rarely changes your status on its own.
That is the core of the small company audit exemption in Singapore, and it is the same test the small group rule applies at group level.
Which companies need to be audited in Singapore?
Any Singapore company that fails the small company test, belongs to a group that fails the small group test, or stops being private during the year must be audited. So when is audit required in Singapore? In each of those cases, every year, until the company qualifies again.
Small groups: How the audit exemption extends
If your company has subsidiaries or is itself a subsidiary, one more test applies. The entire group must also qualify as a small group, which means the group must meet at least two of the same three thresholds on a consolidated basis for the last two financial years. Both the individual company and the group have to pass.
Foreign parent and subsidiary entities are counted when you work out the consolidated figures. If your holding structure is new to you, our guide to group unaudited financial statements explains what a holding company needs to prepare.
A useful point for founders with corporate shareholders: having a company as a shareholder does not, on its own, disqualify you. Under the small company framework, only the consolidated group test matters for the small group audit exemption. This is confirmed on the ACRA audit exemption review notice.
Example: a subsidiary of an overseas group
Illustrative example: a Singapore subsidiary with S$500,000 of revenue, whose overseas parent group has S$50 million of consolidated revenue, S$40 million of consolidated assets and 300 employees, does not qualify for the small group audit exemption. The subsidiary must be audited, even though it would pass the small company test on its own.
Edge cases: Staying exempt and threshold breaches
A few situations trip people up when working out when is audit required in Singapore. Here is how each one works.
- Staying exempt. Once you qualify as a small company, you keep that status in later years until you are disqualified.
- Disqualification. You lose the exemption if the company stops being private during the financial year, or if it fails to meet at least two of the three criteria for the last two consecutive financial years.
- A one-off spike. Because the test looks back two years, a single strong year, for example a large project pushing revenue over S$10 million, does not automatically end your exemption if your other criteria stay within limits.
Is the audit exemption changing in 2026?
Yes, potentially. In February 2026, ACRA announced a review of the audit exemption framework. It is looking at raising the total revenue and asset thresholds, and exploring whether subsidiaries could qualify even where the group does not meet the consolidated test.
ACRA ran targeted industry consultations from March 2026, with a public feedback survey that closed on 17 April 2026. At the time of writing, ACRA has not published an outcome.
Until ACRA publishes any change, the current thresholds still apply: revenue of S$10 million or less, assets of S$10 million or less, and 50 or fewer employees. One thing the review confirmed will not change is that shareholders holding at least 5% of the total issued shares can still require the company to have its accounts audited. You can follow updates on the ACRA review notice.
What do you still have to file if you’re exempt?
If you’re exempt, you still prepare unaudited financial statements, file them with your annual return to ACRA, and file your tax returns with IRAS. Audit exemption removes the auditor, not the paperwork.
Even a fully exempt small company must keep proper accounting records and prepare a full set of unaudited financial statements under the Singapore Financial Reporting Standards. That set includes the statement of comprehensive income, the statement of financial position (balance sheet), the statement of changes in equity, the statement of cash flows, the notes, and the directors’ statement.
Preparing that set is often called a compilation of accounts. Our guide to the types of financial statements explains what goes into each one.
Here is how an exempt company’s filings compare with a company that needs an audit:
| Obligation | Exempt (small company) | Not exempt |
|---|---|---|
| Financial statements | Unaudited, under SFRS, with directors’ statement | Audited, under SFRS, with directors’ statement and auditor’s report |
| Who prepares them | The company or its accountant | The company or its accountant; audited by an ACRA-registered public accountant |
| Annual return to ACRA | Within 7 months of financial year end (fee S$60) | Within 7 months of financial year end (fee S$60) |
| XBRL | Financial statements filed in XBRL with the annual return; solvent exempt private companies do not have to file financial statements | Financial statements filed in XBRL with the annual return |
| IRAS | ECI within 3 months of year end (unless waived); Form C-S / C-S (Lite) / C by 30 November | ECI within 3 months of year end (unless waived); Form C-S / C-S (Lite) / C by 30 November |
In short: your annual return filing is due within seven months of your financial year end and carries a S$60 fee, and from 2026, ACRA has removed the old grace period for late filing. Separately, you file ECI within three months of year-end and your corporate tax return by 30 November.
If XBRL is unfamiliar, our explainer on what XBRL is covers the format ACRA expects, and Sleek’s XBRL filing service can prepare it for you.
A quick note on terminology, since it matters here: preparing these accounts is an accounting task, not simple record-keeping. If the difference is fuzzy, our explainer on accounting vs bookkeeping clears it up.
The AGM and filing sequence is covered in our guide to the AGM and annual return, and some private companies can skip the meeting itself; see our guide to AGM exemption.
Sleek’s accounting plans start from S$75 a month and can prepare your unaudited financial statements and tax return for you, with XBRL filing available as an add-on.
When should an exempt company still get an audit?
Being eligible for audit exemption does not always mean your company can dispense with an audit in practice. If your accountant says an audit is required, ask whether the company fails the size test, belongs to a group that fails the consolidated test, or is subject to a separate audit requirement. A shareholder or other stakeholder may also have a relevant contractual or statutory requirement.
An exempt company should still get an audit when a lender, investor, grant body, parent group or 5% shareholder requires one. Being exempt is a right, not an obligation to skip. An audit or independent review is often worth it if:
- A bank or lender asks for audited accounts before approving financing or a credit facility.
- An investor’s term sheet or a grant application requires audited statements.
- Shareholders holding 5% or more of the issued shares request one, in which case you must provide it.
- You are heading into due diligence for a sale, fundraising round, or acquisition.
- A parent company’s group reporting needs consolidated, audited figures.
If any of these apply, it is worth deciding early, because assembling audit-ready records after the fact is slower and more expensive than keeping them clean from the start. The audit itself must be carried out by an ACRA-registered public accountant.
How Sleek helps with audit exemption in Singapore
Whether you are comfortably exempt or sitting close to the thresholds, the work still has to be done properly. Sleek’s accounting and unaudited financial statements service prepares your accounts under SFRS, keeps your records audit-ready in case ACRA runs a check, and handles both your annual return filing with ACRA and your corporate tax return with IRAS.
If your company is part of a group or edging past S$10 million, we check your figures against the requirements for Singapore audit exemptions each year, at company and group level, so you know in advance whether an audit is coming. Our corporate secretary service keeps your AGM and annual return on schedule.
For a breakdown of fees, see our guide to accounting services cost, or browse the Sleek resources hub for more compliance guides.
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FAQs on audit exemption singapore
Do I need to apply to ACRA for audit exemption?
No. There is no application form. Exemption is automatic if you meet the criteria. You declare your status when you file your annual return via Bizfile, and you keep internal records supporting the figures.
Does having a corporate shareholder disqualify me from audit exemption?
Not by itself. Under the small company framework, only the consolidated small group test matters. A private company with a corporate shareholder can still claim the small company audit exemption in Singapore if the group’s consolidated figures meet two of the three thresholds.
When does a Singapore company lose its audit exemption?
A company loses its exemption when it stops being a private company at any point in the financial year, or when it fails at least two of the three criteria for the immediate past two consecutive financial years. One bad year is not enough on its own. Once disqualified, it must appoint an ACRA-registered public accountant, though it can qualify again later by meeting the test.
Does a new company need an audit in its first year?
Not if it is private and meets two of the three criteria in that first financial year, because ACRA assesses companies under two years old on the current year. If it misses in year one, it gets another chance in year two on the same basis. After that, the standard two-year look-back applies.
If we're exempt, do we still need an accountant?
In practice, yes. You still need unaudited financial statements prepared under SFRS with a directors’ statement, an XBRL filing with your annual return unless you’re a solvent exempt private company, and a corporate tax return to IRAS. Most small companies use an accountant for this even when no auditor is required.
