Easier
Corporate Reporting for Small Companies
with Audit Exemption - Save
time and Money
Smaller company has an
easier corporate reporting requirements with
audit exemption. In 2003, the
Companies Act (the Act)
was amended allowing exempt private
companies to be exempted from
audit. Exempt private companies whose
accounting year commencing from 15 May 2003
and with an annual revenue of $2.5 million
(S$5 million from 1 June 2004) or below, no
audit need to be carried out as the company
is eligible for audit
exemption.
A company
is deemed to be an
exempt private
company
if:
Lower cost for
companies having audit exemption with
compilation of financial
statement
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Companies
are still required to
maintain proper accounting
records, prepare and
present financial
statements in compliance
with the Act and
the
Singapore
Financial Reporting
Standards
(FRS).
In short you are
required to prepare
directors’ report,
balance sheet, profit
and loss account,
statement of changes
in equity, cash flow
statement and notes
to financial
statements.
Everything is the
same with the
exception of the
audit
report.
The Inland
Revenue Authority of
Singapore
(IRAS) had also issued
a circular
advising corporate tax
payers to file their tax
returns accompanied by
unaudited financial
statements that they fully
comply with the Singapore
Financial Reporting
Standards. IRAS may reject
the tax returns lodged if
it did not complied with
FRS. Penalties may be
payable if the subsequently
reviewed accounts are not
prepared on
time
The
preparation of the
financial statement
or compilation
without any audit
report saves both
time and
money.
Alternative
to audit for
companies with audit
exemption
Companies
which have audit
exemption can have
their auditors review
their financial
statements instead.
This provides more
assurance to
other users
of the financial
statements compared
to compilation alone.
In the report, the
auditors will review
the financial
statement and a
negative opinion.
They will
specifically state
that this does not
amount to an audit,
and nothing had come
to their attention to
believe that the
financial statement
are not presented
fairly.
Review
provides more
assurance for
companies with audit
exemption compared to
compilation. You must
evaluate the cost and
benefits of
compilation with
review or
audit.
Please
contact us at (65) 6220
9303 or email us at
agenquiry@a-gcorporate.com
or
use
our
enquiry
form if
you have any queries
on audit
exemption.
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