Audit & XBRL

Common questions about audit & xbrl in Singapore, answered by the team at E&H Corporate Services.

When is a Singapore company legally required to be audited?Audit is required unless your company qualifies as a 'Small Company'. To qualify, you must meet at least 2 of 3 criteria for two consecutive years: Revenue ≤ S$10M, Assets ≤ S$10M, Employees ≤ 50.Does every company need to appoint an auditor?ACRA has waived audit requirements for some of the companies and so, they do not have to hire auditors. Exempt Private Limited Companies and Dormant Companies do not have to hire auditors if the certain criteria fulfilled. All other types of Singapore companies must hire services of auditors within 3 months of their incorporation.Who is exempted from auditing their company accounts?A company is audit-exempt if it qualifies as a 'small company' — i.e. it is a private company (or group) meeting at least two of three criteria: total annual revenue ≤ S$10 million, total assets ≤ S$10 million, and ≤ 50 employees. Dormant companies may also be exempt.What is the 'small company' exemption from the audit requirement?A \"small company\" in Singapore is defined as a private company that meets at least two of the following three criteria for two consecutive financial years: total annual revenue of not more than SGD 10 million, total assets of not more than SGD 10 million, and no more than 50 employees. If a company qualifies as a small company, it may be exempt from the statutory audit requirement.What is auditing and why is it important for my business?Auditing is the process of examining and verifying a company's financial records and statements to ensure accuracy, compliance with accounting standards, and adherence to relevant laws and regulations. An audit provides assurance to stakeholders, such as investors, creditors, and regulators, that the financial information presented by the company is reliable and accurate.What are the statutory audit requirements in Singapore?In Singapore, companies are generally required to undergo an annual statutory audit if they meet certain criteria, such as being a private limited company with corporate shareholders, having annual revenue exceeding SGD 10 million, or having more than 50 employees. Companies that meet the definition of a \"small company\" may be exempt from the statutory audit requirement.What are the different types of audits under external auditing?External audits are performed to present a fair image of an organization’s general polices. The financial audits, operational audits and the statutory audits come under the external auditing process.Are statutory audits necessary?Each year Singapore companies are required to conduct statutory audits. During it, auditors analyze financial transactions of the company to verify their credibility. The Statutory Audits are conducted to reveal frauds, misstatements, or discrepancies in the maintenance of accounting records. As per ACRA, an external auditor is hired to conduct a statutory audit. The external audit report submitted reflects on the true state of the financial affairs of the company. For this reason, the investors, government regulators, creditors and the management of the company use it to make important decisions.What is the necessity of non-statutory audits?It is not a legal obligation for a company to conduct its non-statutory audit. It is aimed at reviewing and determining efficiency of business activities of a company. It reveals weaknesses in operations of a company. A non-statutory audit is helpful to Sole proprietors, limited and unlimited liability partnerships, small companies, clubs, associations, and charitable trusts. Non-statutory audit report is a review of various functions of a company such as, processes, inventory control, and even employment of human resources.What is a qualified audit opinion?A qualified audit opinion is issued by auditors when the financial statements are fairly presented except for a specific, material issue — e.g. a limitation of scope or a disagreement over accounting treatment that does not make the whole report misleading.What is the typical timeline for an audit engagement?The timeline for an audit engagement may vary depending on the size and complexity of the business, as well as the scope of the audit. We will provide an estimated timeline during the initial consultation and keep you informed of our progress throughout the audit process.Is it necessary to submit my company's audited annual accounts to ACRA?Exempt Private Limited Company (EPC) and Dormant Company do not have to file their audited annual accounts with ACRA if the certain criteria fulfilled. Other than these, all other Singapore companies have to file their accounts with the ACRA. An EPC must file its solvency declaration or certificate with ACRA. These companies must maintain their accounts properly. They must also present financial statements to ACRA in compliance with the Singapore Financial Reporting Standards (FRS) and the Companies Act. Dormant companies must submit Form C or Form C / S to the IRAS, unless IRAS has granted a waiver. Dormant companies must also prepare their accounts and submit them to IRAS when demanded.Do all companies need to file financial statements in XBRL format?No. Only certain types of companies are required to file in XBRL. Solvent Exempt Private Companies (EPCs) are exempt from filing, but they may choose to file voluntarily. Insolvent EPCs, non-exempt private companies, and public companies are generally required to file in XBRL format unless specifically exempted.Do audit-exempt companies need to file XBRL?Yes, if the audit-exempt company is insolvent or does not qualify as a Solvent EPC, it may still be required to file Simplified XBRL depending on its revenue and asset levels.What is the difference between Full XBRL and Simplified XBRL?Full XBRL is a comprehensive format that includes detailed financial data tagging. Simplified XBRL requires fewer data points and is applicable to companies classified as “smaller and non-publicly accountable” (those with both annual revenue and total assets not exceeding S$500,000).Is it necessary to file financial reports in full XBRL format?All companies incorporated in Singapore which are either limited or unlimited by shares (except exempted companies) are required to file their full set of financial statements in XBRL format according to the recent guidelines released by ACRA (Accounting and Corporate Regulatory Authority) Singapore June 2013.What is the XBRL filing deadline?XBRL filing must be completed at the same time as the Annual Return. The deadline is within 5 months of the financial year-end.What are the consequences of incorrect or late XBRL filing?Incorrect or late filings may result in ACRA rejections, late penalties, or enforcement actions. Accurate and timely filing is essential to maintaining your company's compliance status.Can I file XBRL on my own using BizFinx?Yes, but the tagging process can be complex and prone to errors, especially if you’re unfamiliar with ACRA’s taxonomy requirements. Engaging a professional ensures accuracy and improves your chances of first-time approval.How long does it take to prepare and submit an XBRL file?The typical turnaround time is 1 to 2 business days from the time we receive your complete financial statements. We also offer express services for urgent filings.How is XBRL filing useful?XBRL is an acronym for eXtensible Business Reporting Language. Financial information is converted to XBRL format then, sent to and fro between business entities. Singapore government has mandated it for each Singapore company to file its financial statements only in XBRL format. The analysis of the data, thus, accumulated gives accurate information about the trends in finance.What is meant by compilation of financial statements?Companies, however small, hire accountants to take a stock of their financial health. The financial reports prepared by these professionals are useful in assessing present situation of the company and in taking decisions about the future direction of the company. During compilation of financial statements, provided data is arranged in the predetermined form. While going through it, accountants check its form, whether it is free of material errors and issue a certificate saying so. The certificate does not say anything about the reliability of the data. Alternately, an accountant can also be engaged to conduct a review or the audit of a business. Here, accountants check for the reliability of the data provided by the company and submits a report. Such a report gives true state of the financial health of the business. Government regulators, investors, creditors, and management use this report to make decisions.

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