Audit Exemption in Singapore: Does Your Company Need an Audit?

Audit exemption in Singapore mainly turns on the small company test. A private company is exempt if it meets at least two of three limits (revenue up to $10 million, total assets up to $10 million, 50 or fewer full-time employees) in each of its two previous financial years. New companies are tested on their first or second year, a subsidiary's group must pass too, and dormant companies are exempt.

The exemption removes the auditor, not the paperwork: exempt companies still prepare financial statements and file annual and tax returns. Getting the test wrong costs money either way: you pay for an audit you did not need, or you skip one the law required, which is harder and dearer to put right later. Amounts are in Singapore dollars, and the rules are as at November 2026.

Key takeaways

• The test: a private company is small if it meets at least 2 of 3 criteria (revenue and total assets each up to $10 million, up to 50 full-time employees) in each of its two previous financial years, or in year one or two for a new company.
• Two bad years, then an audit: a small company keeps the exemption until it fails the test in two consecutive years, and the audit starts the following year.
• Groups: a subsidiary is exempt only if its entire group, overseas companies included, also passes.
• Still required: unaudited financial statements, an annual return within 7 months of the year end and a corporate tax return by 30 November.
• Watch out: shareholders holding at least 5% of the shares can still require an audit.

Table of Contents

1. What Is a Small Company for Audit Exemption in Singapore?
2. When Does a Company Stop Qualifying?
3. Does a Subsidiary Qualify? The Small Group Test
4. Do You Need an Audit? Six Company Scenarios
5. Dormant Companies and Exempt Private Companies
6. What Still Applies If Your Company Is Audit Exempt?
7. How Much Does an Audit Cost in Singapore?
8. How to Prepare for Your First Audit
9. Common Audit Exemption Mistakes
10. When Should You Get Professional Help?
11. Frequently Asked Questions
12. Official Sources

What Is a Small Company for Audit Exemption in Singapore?

For financial years beginning on or after 1 July 2015, section 205C and the Thirteenth Schedule of the Companies Act 1967 exempt a "small company" from audit. A company is small if it is a private company in the financial year in question and meets at least two of these three criteria, tested over two years as explained below:

Two out of three means one limit can be exceeded: a property company with $14 million of assets, $600,000 of rent and two staff still passes. ACRA's stated reason for a size test is that creditors, employees and customers, not just shareholders, have an interest in a company's financial statements.

Only Singapore-incorporated private companies can use this exemption, but corporate shareholders do not disqualify you. The small company audit exemption replaced an older rule under which only exempt private companies with revenue of $5 million or less were exempt, so pages still quoting that rule are out of date.

Which Financial Years Are Tested?

The test looks backwards. An established company is judged on the two financial years before the current one, not on the current year. ACRA's illustrations include a company that meets the criteria this year but still needs an audit, because it failed them in both of the previous two years.

A new company has no history, so its first financial year is tested on its own figures, and a company that misses out in year one can still qualify on its second year's figures. From the third year, the normal look-back applies. If you expect to exceed two limits in year one, or the company belongs to a large group, plan for an audit from the start. Our new company compliance checklist covers the other first-year deadlines.

When Does a Company Stop Qualifying?

A small company keeps the exemption until one of two things happens. If it stops being a private company at any time during a financial year, it loses the exemption for that year. If it fails at least two of the three criteria in two consecutive financial years, it needs an audit from the next year. Getting the exemption back takes two consecutive passing years.

Company B, a hypothetical distributor with a 31 December year end that has always been small, shows the timing:

Company B first breaks the limits in FY2026, but its first audit is for FY2028, and FY2029 is audited too even though both years pass. Use the lead time: the FY2028 auditor must check opening balances that come from FY2027's unaudited accounts.

Does a Subsidiary Qualify? The Small Group Test

A company in a group needs two passes: it must be small itself, and the entire group must be a small group. A group is small if it meets at least two of the three criteria on a consolidated basis for the two preceding financial years, and it stays small until it fails for two consecutive years.

• Overseas companies count. A Singapore subsidiary with $1 million of revenue needs an audit if its overseas group is not small, even when the parent already audits the consolidated accounts.
• No consolidated accounts is no escape. Group membership is decided under the accounting standards, so the test applies whether or not consolidated accounts are prepared. ACRA's FAQ on the small company concept says that where the holding company, including a foreign one, prepares no consolidated accounts, you add up the revenue and total assets of all group members.
• Control decides. Under the accounting standards a group is a parent and the entities it controls, so a corporate investor with a minority, non-controlling stake does not make your company its subsidiary.

ACRA's February 2026 review is considering letting some subsidiaries qualify even when their group fails, but as at November 2026 nothing has changed.

Do You Need an Audit? Six Company Scenarios

Work through these questions in order:

1. Was the company dormant for the whole financial year? If so, it is exempt under section 205B.
2. Was it a private company throughout the year? If not, the small company exemption is not available.
3. Does it meet two of the three criteria? Check the two previous years, or a new company's own first-year (then second-year) figures. Once small, a company stays small until it fails two years in a row.
4. Is it part of a group? If so, the whole group must also pass as a small group.
5. Have shareholders holding at least 5% of the shares required an audit? If so, a small company must have one anyway.

These hypothetical profiles are Singapore private companies with 31 December year ends. "EPC" means exempt private company, explained in the next section.

Rows 2, 3 and 6 use Full XBRL because their revenue exceeds $500,000. Simplified XBRL is only for companies that are not publicly accountable and whose revenue and total assets are both $500,000 or less.

Dormant Companies and Exempt Private Companies

Dormant Company Audit Exemption

ACRA treats a company as dormant when it has no significant accounting transactions in the financial year. Section 205B exempts any dormant company from audit, private or not. Under section 201A, a dormant relevant company need not even prepare financial statements if it has been dormant since formation or since the end of the previous financial year, its total assets never exceeded $500,000 during the year (consolidated, for a parent), and it is not listed or a subsidiary of a listed company. Fail one condition and it still prepares unaudited accounts.

IRAS uses a different test: a company with any income, even fixed deposit interest, is not dormant for tax. Our guide to dormant company filing requirements covers both sides.

Exempt Private Company: What It Changes

An exempt private company (EPC) has up to 20 shareholders, all individuals, and no corporation holds a beneficial interest in its shares, directly or indirectly. Some government-owned companies are also gazetted as EPCs.

Since the 2015 changes, EPC status no longer affects audit; it decides filing. A solvent EPC, one that can pay its debts as they fall due, declares this in its annual return and need not file financial statements, though it may file them voluntarily. An insolvent EPC files them under the normal rules.

Dormant relevant companies are the exception: they prepare no financial statements at all.

What Still Applies If Your Company Is Audit Exempt?

An audit-exempt company must still:

1. Keep proper accounting records, and keep business records for at least 5 years from the relevant Year of Assessment for IRAS.
2. Prepare financial statements that comply with the accounting standards and give a true and fair view. ACRA's guidance is that an audit-exempt company presents unaudited statements under section 201(1), and the directors stay responsible even when an accountant prepares them. Since 1 July 2023, the maximum fine for financial statements that do not comply with the accounting standards has been $250,000.
3. Hold an AGM within 6 months of the year end. A private company can instead send the financial statements to members within 5 months, or dispense with AGMs by a resolution of all members.
4. File the annual return on Bizfile within 7 months of the year end ($60). This is where a private company declares that it is a small company exempt from audit, and the return carries XBRL financial statements unless the company is exempt from filing them.
5. File Estimated Chargeable Income (ECI) within 3 months of the year end unless the waiver applies, and Form C-S, C-S (Lite) or C by 30 November. IRAS accepts unaudited accounts; see which corporate tax form to file.

Our financial statements service prepares unaudited statements to the accounting standards, and our XBRL filing service converts them for ACRA.

Other Reasons You May Still Need an Audit

Shareholders holding at least 5% of the company's total issued shares can require an audit even when the company is small. Loan and investment agreements often demand audited accounts, and BCA's Contractors Registration System requires them for all but the lowest grades. Some companies also choose a voluntary audit before raising funds or selling the business, because audited accounts carry more weight with outsiders.

How Much Does an Audit Cost in Singapore?

Audit firms price on hours, so the figures below are typical Singapore market ranges for an annual statutory audit, not Tax Filing SG prices. Treat them as a rough guide and get quotes.

Inventory, many bank accounts or currencies, related-party transactions, overseas subsidiaries, poor records and tight deadlines all push fees up. Unaudited financial statements for a small company typically cost $500 to $1,500 in the market; our accountant cost guide compares both. An audit also costs management time and compresses your year-end timetable.

How to Prepare for Your First Audit

1. Confirm the first audited year. Apply the two-year look-back to your company and, if it has a parent or subsidiaries, to the whole group. For a new company in a large group, the first audited year is its first financial year.
2. Appoint the auditor early. A new company that is not exempt must appoint an auditor within 3 months of incorporation. Otherwise, appoint one before the end of the first audited year so the auditor can plan and attend the year-end stocktake. File the appointment with ACRA on Bizfile within 14 days.
3. Clean up the opening balances. The closing balances of your last unaudited year become the opening balances of the first audited year, and the auditor must be satisfied they are right. Reconcile bank, receivables, payables, inventory, fixed assets and loans, and correct errors first.
4. Build the audit file as you go. Keep bank reconciliations, a fixed asset register, contracts, loan and lease agreements, board minutes, payroll and CPF records, related-party balances and tax computations in one place.
5. Work back from the deadlines. Schedule the audit so the audited financial statements reach members within 5 months of the year end, or an AGM is held within 6 months, and the annual return is filed within 7 months. If you will miss the AGM or annual return deadline, apply on Bizfile for a 60-day extension before it passes.

For a 31 December 2026 year end, that means audited accounts to members by 31 May 2027 (or an AGM by 30 June 2027) and the annual return by 31 July 2027. An extension costs $200 per application, and ACRA advises applying at least 14 working days ahead. Our company filing deadline calculator maps the dates for any year end.

Common Audit Exemption Mistakes

• Testing this year's numbers. An established company is judged on its two previous years.
• Forgetting the group. A foreign parent or a new acquirer can remove the exemption even when your own figures are small.
• Miscounting. Use total assets, not net assets, and full-time staff at the year end, not an average.
• Treating audit exemption as a filing exemption. Unless you are a solvent EPC or a dormant relevant company, unaudited statements still go to ACRA in XBRL.
• Appointing the auditor after the year end. A late audit delays the AGM and annual return, and a late annual return draws a $300 late lodgement penalty, or $600 if it is filed more than 3 months late.

When Should You Get Professional Help?

You may not need to pay anyone for the test itself. If your company stands alone, is owned by individuals and sits comfortably inside the limits, record the three figures each year and keep the note with your accounts.

Get advice when you are near two of the limits, have a parent, subsidiary or overseas sister company, receive a request for audited accounts, or suspect that past years needed an audit.

Tax Filing SG is run by ex-Big 4 Singapore Chartered Accountants (ISCA members). For audit-exempt companies, our annual packages cover yearly accounting, financial statements, Form C-S/C-S (Lite) filing and the company secretary. If an audit is needed, we prepare the financial statements and audit schedules and work with your auditor.

Frequently Asked Questions

Which companies need an audit in Singapore?

Every Singapore company needs an audit unless an exemption applies. The main exemptions cover dormant companies and small private companies, provided any group they belong to is also small. So audits fall on companies that fail the small company test (an established company only after two failed years in a row), subsidiaries and parents of groups that are not small, public companies that are not dormant, and companies whose shareholders holding at least 5% of the shares require one.

Is audit exemption automatic, or do I need to apply?

There is no separate application. A company that meets the criteria is exempt by law, and it confirms this when filing its annual return on Bizfile, where a private company states whether it is a small company exempt from audit and ticks the declarations. Directors should check the figures each year and keep a note of the revenue, total assets and full-time headcount used, plus group figures if there is a parent.

Can shareholders ask for an audit?

Yes. Shareholders holding at least 5% of the total issued shares can require an audit even when the company is small, and ACRA's February 2026 announcement confirms that right will remain. The Companies Act sets out how and when the request must be made, so check the timing with your company secretary and line up an auditor before the year end.

Does IRAS require audited accounts?

No. Form C-S and Form C-S (Lite) are filed without the accounts, though they must be prepared and produced if IRAS asks, and Form C is filed with audited or unaudited financial statements. Whether you need an audit is a Companies Act question, decided by the small company, small group and dormant company rules.

Does a company with no revenue need an audit?

Usually not. A private company with no revenue passes the revenue limit, so it needs only total assets of $10 million or less, or 50 or fewer full-time employees, to meet two of the three criteria. A dormant company is exempt anyway. The main exception is a pre-revenue subsidiary of a group that is not small, which still needs an audit.

Is ACRA raising the audit exemption thresholds?

Possibly, but nothing has changed yet. ACRA's February 2026 review is looking at higher revenue and total asset thresholds and at letting some subsidiaries qualify when their group fails. Feedback closed on 17 April 2026, and as at November 2026 no new thresholds had been announced, so the $10 million, $10 million and 50-employee criteria still apply.

Official Sources

• ACRA: Audit exemptions (small company concept)
• ACRA: More Details on Small Company Concept for Audit Exemption (PDF with year-by-year illustrations)
• ACRA: Review of the audit exemption framework (26 February 2026)
• ACRA: Financial statements filing requirements and exemptions
• ACRA: Financial reporting duties for directors
• ACRA: AGM due dates and requirements
• IRAS: Guidance on filing Form C-S, Form C-S (Lite) and Form C
• ACRA: Steps to file an annual return (audit exemption and EPC solvency declarations)

About Tax Filing SG — We are a Singapore accounting practice run by ex-Big 4 Singapore Chartered Accountants (ISCA). We handle accounting, corporate tax, GST and company secretarial work for Singapore SMEs, including overdue and late filings.

Last updated: 9 November 2026. This article is general information based on IRAS and ACRA guidance as at November 2026, not advice for your specific situation. Rules, rates and deadlines change, so check the official sources above or speak to us before acting.