Financial Statements

Appointment of Auditors

Under section 205 of the Companies Act, the directors of a company are required to appoint at least one accounting entity to be the company’s auditor within 3 months of the company’s incorporation. In Singapore, only public accountants or accounting firms approved by the Accounting and Corporate Regulatory Authority (ACRA) can act as company auditors.

Exemption from Audit Requirements

Companies that are regarded as a “small company” for a particular financial year, or are dormant, are exempt from audit requirements. These companies therefore do not need to appoint auditors (or have their financial statements audited) for that financial year.

 Small Company Exemption

In general, a company will be considered a “small company” if it is a private company throughout the current financial year, and satisfies any 2 of the following criteria for each of the 2 financial years immediately before the current financial year:

• • The company’s revenue does not exceed SGD10 million;

• • The value of the company’s total assets does not exceed SGD10 million; or

• The company does not have more than 50 employees.

Refer to the Thirteenth Schedule of the CA for the criteria that companies incorporated for less than 3 years, or incorporated before 1 July 2015, have to meet in order to be considered a “small company”.

Companies that are regarded as a “small company” for a particular financial year, or are dormant, are exempt from audit requirements. These companies therefore do not need to appoint auditors (or have their financial statements audited) for that financial year.

Companies that are regarded as a “small company” for a particular financial year, or are dormant, are exempt from audit requirements. These companies therefore do not need to appoint auditors (or have their financial statements audited) for that financial year.

Small Company Exemption

In general, a company will be considered a “small company” if it is a private company throughout the current financial year, and satisfies any 2 of the following criteria for each of the 2 financial years immediately before the current financial year:

1. The company’s revenue does not exceed SGD10 million;
2. The value of the company’s total assets does not exceed SGD10 million; or
3. The company does not have more than 50 employees.

Refer to the Thirteenth Schedule of the CA for the criteria that companies incorporated for less than 3 years, or incorporated before 1 July 2015, have to meet in order to be considered a “small company”.

Exception to exemption from audit requirements

Even if a company is exempt from audit requirements, the Registrar may still require the company to lodge its audited financial statements and an auditor’s report if the Registrar is satisfied that the company has breached laws relating to the:

• • Keeping of accounting records (section 199 of the CA); or

• Laying of its financial statements at its AGM (section 201 of the CA).

Yes. If mistakes are found after filing, the company can submit a replacement XBRL. However, penalties may apply if the AR filing deadline has passed.

Yes, if the dormant company is unlisted, is not a subsidiary or a listed company, and the company’s total assets is not more than S$500,000, the company is exempted from preparing financial statements (FS) even if it is insolvent.

Yes, if the dormant company is unlisted, is not a subsidiary or a listed company, and the company’s total assets is not more than S$500,000, the company is exempted from preparing financial statements (FS) even if it is insolvent.

Yes. You can prepare the unaudited Financial Statements for the particular FYE provided your company is entitled for Small Company which is exempted from audit requirements.

Small Company Exemption

In general, a company will be considered a “small company” if it is a private company throughout the current financial year, and satisfies any 2 of the following criteria for each of the 2 financial years immediately before the current financial year:

• • The company’s revenue does not exceed SGD10 million;

• • The value of the company’s total assets does not exceed SGD10 million; or

• The company does not have more than 50 employees.

Refer to the Thirteenth Schedule of the CA for the criteria that companies incorporated for less than 3 years, or incorporated before 1 July 2015, have to meet in order to be considered a “small company”.

Yes. The statements can be reported in any chosen functional currency, provided it matches the FS submitted. ACRA’s XBRL taxonomy supports multiple currencies.

Most companies must file XBRL-format financial statements, except:

• • Small EPCs (Exempt Private Companies) that are solvent

• • Dormant companies meeting ACRA exemption criteria

• Companies specifically exempted by the Act (rare)

Solvent EPCs may file FS Annual Return (without XBRL), but details still require proper financial record-keeping.

No. Financial statements are prepared normally using Singapore Financial Reporting Standards (SFRS). XBRL only affects the format submitted to ACRA.

No. XBRL is strictly for ACRA compliance.nStakeholders still receive PDF or printed financial statements as usual.

For dormant declaration: There is a requirement for a director’s statement to declare the company’s status of dormancy. However, the requirements contained in the statement should follow those required under the Companies Act (s201A and s205B). The statement by the directors for the exemption from preparation of financial statements must state:

1. 1. that the company has been dormant for the period from the time of its formation or since the end of the previous financial year, as the case may be;
   2. that no notice has been received under section 201A(3)  in relation to the financial year; and
      the accounting and other records required by the Companies Act to be kept by the company have been kept in accordance with section 199.

Even if a company is exempt from audit requirements, the Registrar may still require the company to lodge its audited financial statements and an auditor’s report if the Registrar is satisfied that the company has breached laws relating to the:

• • Keeping of accounting records (section 199 of the CA); or

• Laying of its financial statements at its AGM (section 201 of the CA).

If the dormant company is unlisted, is not a subsidiary or a listed company, and the company’s total assets is not more than S$500,000, the company is exempted from preparing financial statements (FS) even if it is insolvent.

The exemption is in respect of financial years ending on or after 3 Jan 2016.

Standard timeline for ACHIBIZ upon having the duly approved audited or un-audited financial statements (FS):

• • 1–3 working days for simplified XBRL

• 1–3 working days for full XBRL (depending on complexity and completeness of documents)

Depending on the filing type:

• • Full XBRL: PDF may be optional or required depending on the company’s format.

• • XBRL FSH: PDF is mandatory.

• FS Annual Return (solvent EPC): No PDF required.

Not always. Whether audited or unaudited, XBRL must reflect the actual financial statements approved by directors and shareholders.

Audit requirements depend on:

• • Revenue thresholds (< S$10M exemption)

• • Asset thresholds (< S$10M)

• • Number of employees (< 50)

• Group consolidation status

No. The auditor is not required to endorse or sign the unaudited reports even though the auditor’s name is still in ACRA records due to whatever the reasons.

You can prepare the unaudited Financial Statements for the particular FYE provided your company is entitled for Small Company which is exempted from audit requirements.

Small Company Exemption

In general, a company will be considered a “small company” if it is a private company throughout the current financial year, and satisfies any 2 of the following criteria for each of the 2 financial years immediately before the current financial year:

• • The company’s revenue does not exceed SGD10 million;

• • The value of the company’s total assets does not exceed SGD10 million; or

• The company does not have more than 50 employees.

Refer to the Thirteenth Schedule of the CA for the criteria that companies incorporated for less than 3 years, or incorporated before 1 July 2015, have to meet in order to be considered a “small company”.

Yes, unless:

• • The company is a solvent EPC (FS AR), or

• • The company qualifies for dormant exempt status, or

• Other limited exemptions apply.

Yes. A company director in Singapore is expected to understand the company’s financial statements.

Directors have a legal duty to act in the best interests of the company and to exercise reasonable care, skill, and diligence. This includes being able to read and interpret key financial documents such as the balance sheet, profit and loss statement, and cash flow statement.

Even if accounting tasks are delegated to professionals, directors remain responsible for ensuring that the financial information is accurate, up to date, and properly maintained. A lack of financial understanding is not an acceptable excuse for failing to fulfil these duties.

For dormant declaration: There is a requirement for a director’s statement to declare the company’s status of dormancy. However, the requirements contained in the statement should follow those required under the Companies Act (s201A and s205B). The statement by the directors for the exemption from preparation of financial statements must state:

1. that the company has been dormant for the period from the time of its formation or since the end of the previous financial year, as the case may be;
2. that no notice has been received under section 201A(3)  in relation to the financial year; and
3. the accounting and other records required by the Companies Act to be kept by the company have been kept in accordance with section 199.

The company must still hold an AGM. However, if the company is a private company, the company can dispense with the holding of its AGM if there are no other resolutions which need to be tabled.

Directors must ensure that:

• • financial statements are prepared annually,

• • they present a true and fair view,

• • they comply with Singapore Financial Reporting Standards (SFRS),

• • records are kept for at least 5 years,

• the AGM or written resolutions approve the statements.

• • Incorrect tags mapped to wrong FS items

• • Missing mandatory disclosure fields

• • Mismatched figures between PDF FS and XBRL

• • Wrong currency tagging

• • Missing comparative data

• • Inconsistent accounting policies

• Leaving required notes untagged

ACHI BIZ uses validation tools and manual checks to prevent such issues.