Appointment of Auditor.

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”.