Auditing is a process where a team of outsourced or in-house auditors assesses and evaluates the company’s financial health, ledgers, and journal entries. The company can better determine its current state and whether it is earning or losing money through auditing. Additionally, it provides the opportunity to pinpoint any accounting mistakes, allowing the company to improve certain aspects of its operations.
According to The Singapore Companies Act, every enterprise and business must provide the corporate accounts and financial statement to an audit firm in Singapore to get them audited at least once a year. However, there are some exceptions when it comes to small companies. In the amendment to The Singapore Companies Act in 2014, for a small company to be exempted from an audit process, it must meet at least two requirements. The requirements are:
1. Total generated income by the sale of services or goods of the enterprise does not go beyond $10,000,000.
2. The corporation’s total income value does not go beyond $10,000,000 by the end of the financial year.
3. The company does not have more than 50 full-time staff by the end of the financial year.
As long as you are a company that fulfils at least two of the above requirements, you are considered a small company and is exempted from a yearly audit.
There are three fundamental forms of auditing:
1. Internal auditing
Internal auditing is conducted by the company’s hired accountants and auditors. Primarily, this form of auditing ensures that the business’s accounts are clean and clear and that all rules and regulations governed by Singapore are adhered to. Depending on how detailed you want to be, you can conduct internal audits on a monthly or annual basis.
2. External auditing
While the procedure and purpose are similar to an internal auditing process, the results mainly target the investors and shareholders interested in the company’s health. This form of auditing is mandatory in Singapore. It requires the company to engage a registered audit firm in Singapore every year to conduct the process.
3. Tax auditing
This form of auditing ensures the accuracy of the information filed in tax returns. It assesses if the company truly is qualified for the tax exemption mentioned earlier.
Why is auditing and getting a professional audit service provider in Singapore important?
Apart from being mandatory in Singapore under The Singapore Companies Act, auditing also offers many benefits such as:
1. Accuracy in the required information
Outsourcing your internal and external auditing to an audit firm such as Ackenting Group ensures that you receive an unbiased final report at the end of the day. This report can provide a better perspective of what needs to be improved in your business operation.
2. Satisfied investors and shareholders
Most shareholders and investors are not involved in the business’s daily operations. Hence, they want a clear understanding of the company’s finances in order to know where their money is going. Auditing helps provide these people with a clear overview of the business to keep trusting in the company’s direction.
3. Professional audit service providers have experienced and competent auditors
The best audit firms in Singapore, such as Ackenting Group, are made up of a team of seasoned auditors who often are well equipped with the most updated auditing software. Their knowledge and expertise in the industry can help your company save time and resources in the auditing process. Hence, allowing your business to redirect efforts to other vital operations.
4. Make better decisions
Making sound financial decisions are essential to a growing enterprise. You need to have up-to-date and accurate accounting and finance knowledge to achieve that. Auditing services in Singapore helps ensure that your business gets the most precise information while identifying solutions to help improve the operation of your business.
Now that you are aware of what goes on in a typical auditing process and why it is beneficial for your company, if you are looking for affordable accounting and audit services in Singapore, Ackenting Group is here to help you. We are among the best audit firm in Singapore, offering quality corporation advisory services. Besides assisting you in your auditing process, we also provide payroll, tax, and bookkeeping solutions.
If you require any assistance on accounting or auditing services, please drop us an email at firstname.lastname@example.org or contact us at +65-66358767. At Ackenting Group, we offer a complimentary 30-minute online consultation for us to understand your business needs better.