As the deadline for filing corporate tax returns draws near, it is vital to ensure that you have all your books and financial reports in place. Ensure that your financials have been audited as your team prepares for the final company report.
Here’s what you need to know about the authority behind the mandatory audit, which businesses are exempt from the mandatory audit, and the best way to have your company’s books ready in due time.
The authority behind the mandatory audit
According to the Accounting and Corporate Regulatory Authority (ACRA) rules, companies in Singapore must appoint an auditor within the first three months of its incorporation. This, in most cases, would be an independent audit firm in Singapore that is in line with requirements in the Companies Act. However, an amendment of the Act in 2014 introduced the concept of ‘small companies’. Companies which met the criteria were exempted from the mandatory audit requirement.
Companies’ annual filings
All companies in Singapore must prepare their financial statements according to Singapore’s Financial Reporting Standards. The financial statements should include a profit and loss account, a balance sheet, a cash flow report, and a report on significant changes in equity.
Companies are also required to file their revenues and Estimated Chargeable Income with the Inland Revenue Authority of Singapore (IRAS) within three months of the end of their financial year. If there is no income, they would still file a ‘Nil return.’
Companies that offer corporate accounting services in Singapore have specialised members within their teams. They can help you to prepare much more accurate reports and submit them on time. Outsourcing to an audit firm like Ackenting Group can help you to ensure that your books are up-to-date and are in accordance with ACRA and the IRAS. Our professional team is committed to maintaining the integrity of your books and your reputation as a trusted business with expertise, knowledge and experience in managing complex accounts.
Companies exempted from compulsory audit
The ‘small companies’ concept brought about by amendments to the Companies Act in 2014 introduced exemptions to the mandatory audit requirements. According to the Companies Act, a company that fulfils any two of the conditions below qualifies as a ‘small company.’ Thus, they are exempt from the mandatory audit. The conditions are:
- Where the total annual revenue does not exceed S$10 million
- Where the total assets owned by the company during the financial year do not exceed S$10 million
- Where the total number of full-time employees as at the close of the financial year does not exceed 50
These conditions also apply for companies that belong to a group or are in a holding company. In this case, each subsidiary as well as the parent holding company, as a group, must meet the two conditions above for small companies. If you do not meet the requirements, you should look to have an audit firm examine your books before filing.
How to ensure accurate and timely company annual reports
According to IRAS rules, companies should file their Estimated Chargeable Income within three months of their Fiscal Year End (FYE), and the Directors’ Statements as well as other financial reports within six months of the FYE. These are tight deadlines, and a breach could automatically result in penalties for your business.
If you frequently file your company returns late and incur unnecessary penalties, you should consider outsourcing to a firm offering corporate accounting services in Singapore, like Ackenting Group. We provide essential one-stop financial solutions for your business, from tax accounting services to accounting services to ensure that you are fully prepared for future annual reports and audits. We also provide you with financial records, statements, and risk analyses to guide you towards business expansion.
If you require any assistance on accounting services, feel free to drop us an email at johnwoo@ag-singapore.com or contact us at +65-66358767. At Ackenting Group, we offer a complimentary 30 minutes online consultation for us to better understand your business requirements.
