- Singaporean laws require private limited companies to have their financial statements audited officially.
- Revenue of a Singapore company is equal to the sales amount generated from its main source of business activity as defined in the Articles of Association.
- Companies that are exempted from the audit are still required to prepare a full set of unaudited Financial Statements including explanatory notes with the directors’ statement.
Singaporean laws require private limited companies to have their financial statements audited officially (by a licensed auditor or a public accountant).
This audit has to happen at least once a year in Singapore. Additionally, proper records are to be maintained by the company and they shall be available to auditors executing the yearly review and inspection.
However, there was a change in 2014 regarding this law. An amendment was introduced to the Companies Act that modified the criteria for an audit exemption in Singapore. In it, the small company concept was added, whereby small companies are not required to have their statements audited.
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Quick answer Your Singapore company is exempt from a statutory audit if it qualifies as a small company. That means it is a private company and meets at least two of these three thresholds for the last two financial years: annual revenue of S$10 million or less, total assets of S$10 million or less, and 50 or fewer employees. If your company is part of a group, the whole group must also pass a small group test. Exempt companies still have to prepare unaudited financial statements and file with ACRA and IRAS. Threshold: meet 2 of 3 | Revenue: S$10m or less | Assets: S$10m or less | Employees: 50 or fewer | Applies over: last 2 financial years |
Does my Singapore company need to be audited?
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.
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. We cover what you still owe further down.
What a small company means under the Companies Act
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 three quantitative criteria for the last two consecutive financial years.
The two-of-three test, explained
A company qualifies if it meets at least two of these three criteria across the immediate past two consecutive financial years:
Criterion | Threshold | Measured as |
|---|---|---|
Total annual revenue | S$10 million or less | Revenue for the financial year |
Total assets | S$10 million or less | Total assets at the end of the financial year |
Number of employees | 50 or fewer | Headcount at the end of the financial year |
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.
Audit exemption Singapore criteria
At the moment, a company is exempted from auditing if it is deemed an exempt private company with yearly revenue of S$5 million or less.
However, this approach is going to be replaced by a new small company concept that will determine exemption from statutory audit in Singapore. Essentially, a company does not need to be an exempt private company in order to be exempted from audit.
A business is deemed a small company in Singapore if it meets the following qualifying criteria:
- It is a private business in the current financial year in question.
- It meets at least 2 of 3 requirements for immediate past two consecutive years:
- Total annual revenue is less than S$10 million.
- Total assets are worth less than S$10 million.
- The number of employees is under 50.
The following requirements apply to a Singapore company that is part of a group:
- The company has to qualify as a small company.
- The entire group has to qualify as a small group company.
The listed requirements have to be fulfilled in order to qualify for the small company audit exemption.
However, keep in mind that at least 2 of the 3 quantitative criteria on a consolidated basis have to be met for a group company to become a small group or holding company for the immediate past two consecutive financial years.
A Singapore company that has successfully become a small company remains a small company for subsequent years until it gets disqualified.
A disqualification occurs if:
- The company stops being private at any time during the financial year.
- The company does not meet at least 2 of the 3 quantitative criteria for the immediate past two consecutive financial years.
If a group successfully obtains the small group status, it remains such for subsequent financial years until it fails to meet at least 2 of the 3 qualifying criteria for the immediate past two consecutive years.
Audit requirements for small companies
Many fail to realize what compilation of accounts stands for. A compilation of accounts or reports is a compilation of unaudited Financial Statements of a private company in Singapore.
Profit and loss records, balance sheets, and finance statements are compiled to provide an outlook on the company’s financial standing.
Companies that are exempted from the audit are still required to prepare a full set of unaudited Financial Statements including explanatory notes with the directors’ statement. Additionally, companies need to prepare according to the stipulation laid out by the Singapore Financial Reporting Standards.
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.
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. This is confirmed on the ACRA audit exemption review notice.
Edge cases: New companies and threshold breaches
A few situations trip people up. Here is how each one works.
- Newly incorporated companies. In your first financial year there is no two-year history, so you are assessed on that single year. In your second year, you are assessed on years one and two. Meet two of three in year one, and you are exempt that year.
- 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.
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.
Exempt from audit? You still need to do this
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.
On top of the accounts, these filings still fall due every year:
|
Obligation |
Who to |
Deadline |
|---|---|---|
|
Annual return |
ACRA (via BizFile+) |
Within 7 months of financial year end (fee S$60) |
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Financial statements |
ACRA, with the annual return |
Filed in XBRL where applicable |
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Estimated Chargeable Income (ECI) |
IRAS |
Within 3 months of financial year end (unless waived) |
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Corporate tax return (Form C-S / C-S (Lite) / C) |
IRAS (myTax Portal) |
By 30 November each year |
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 guide to XBRL financial reporting explains the format ACRA expects.
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.
When you should still consider an audit
Being exempt is a right, not an obligation to skip. There are good reasons a qualifying company chooses to be audited anyway. 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.
How Sleek helps you stay audit-ready
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 assess your small company and small group status each year, so you know in advance whether an audit is coming.
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FAQs : Audit exemption for small companies in Singapore
Does my Singapore company need to be audited?
Not if it qualifies as a small company. Your company is exempt if it is private and meets at least two of three criteria for the last two financial years: revenue of S$10 million or less, total assets of S$10 million or less, and 50 or fewer employees.
What are the small company audit exemption criteria in Singapore?
A private company qualifies if it meets at least two of these three thresholds for the immediate past two consecutive financial years: total annual revenue of S$10 million or less, total assets of S$10 million or less, and 50 or fewer employees. Public and listed companies are not eligible.
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 be a small company if the group’s consolidated figures meet two of the three thresholds.
Will the audit exemption thresholds change in 2026?
Possibly. ACRA opened a review in February 2026 and may raise the revenue and asset thresholds. Until any change is published, the current S$10 million revenue, S$10 million assets, and 50 employee thresholds continue to apply.
