An audit is essential in financing negotiations, take-over and buy-out.
The close involvement of the auditor provides companies with comfort when faced with tax and regulatory investigations.
Directors of smaller companies may believe, for example, that because there is no longer any statutory audit requirement, there will no longer be any external ‘checking’ of the books and records. The power and resources of the Inland Revenue Authority of Singapore and the Department of Customs and Excise are not to be underestimated and are increasing all the time. This means that there are likely to be more investigations in the future, and that they are liable to be more thorough.
Q7. Can all small companies take advantage of audit exemption?
Only dormant companies and exempt private companies with annual turnover of less than $5 million are exempted from audit. Companies that are not entitled to take advantage of audit exemption include the following:
Public companies, banks, insurance companies, companies regulated under the financial services legislation, trade unions and employers associations.
Certain charitable companies (and other charitable entities).
The constitutions of many small companies and entities, including clubs and societies, also require the production of an auditors’ report.
It is recommended that, in view of the amended provision of the Companies Act Cap 50 i.e. S 205A to S 205C), companies continue to have their accounts audited.
