Small-Company Audit Exemption

Key Points

A private company generally meets at least two tests for the preceding two consecutive years: revenue no more than S$10 million, assets no more than S$10 million and no more than 50 full-time employees at financial year end. Group companies also assess consolidated group criteria, including foreign entities. Newly incorporated companies use the current-year tests during their first two years, as explained in the guide. Audit exemption does not change financial-statement filing requirements.

Document the Company and Group Tests

Begin with the company’s legal status and the relevant financial years, rather than judging exemption from its current bank balance. The small-company route requires a private company and the financial tests described above. Being an exempt private company is not itself the test; corporate shareholders do not automatically prevent qualification.

Prepare a year-by-year assessment showing revenue, assets and full-time headcount at the financial year end. A practical working paper can identify which two quantitative conditions are met and where the supporting figures appear in the accounts. For a newly incorporated business, apply ACRA’s first- and second-year rules instead of inventing two earlier years of accounts.

If a parent or other group entity exists, assess the group position as well as the Singapore company. Foreign entities are included. A company that does not prepare or file consolidated statements cannot assume that this removes the small-group assessment. The relationship is assessed under the accounting standards, as ACRA’s FAQ explains.

Review the result each year and separately confirm financial-statement preparation and filing obligations. Audit exemption does not change filing requirements. Retain the basis for the conclusion as practical evidence for the directors’ review, and consult the detailed audit-exemption guidance ↗ where the group or historical-year position is unclear.