The following article will answer some commonly asked questions regarding Singapore small company auditing requirements and exemptions from ACRA.
Q: When will the small company audit exemption come into force?
A: The audit exemption will be applicable for financial years beginning on or after the change in the law. Transitional provisions have been accounted for the first two years after the change in law.
Q: How does the small company criteria apply in the first 2 years (transitional period) after the exemption takes effect?
A: To determine if a company qualifies as a small company in the first 2 financial years commencing after the exemption takes effect, the company must assess if it fulfils the requirements in each of the years. E.g. in order to determine whether a company would qualify in FY2016, the company should look at whether it is a private company in FY2016 and whether it meets the 2 out of 3 quantitative criteria in FY2016. If it does not qualify for that year, it will still get a chance to qualify for FY2017, if it is a private company and meets the 2 out of 3 quantitative criteria in FY2017.
Q: Does the small company audit exemption apply to foreign companies?
A: The small company audit exemption only applies to Singapore incorporated companies. However, for the purposes of determining whether the group to which a company belongs is a small group, all entities within that group are taken into account, including foreign entities, in determining whether the consolidated total revenue and consolidated total assets of the group meet the thresholds.
Q: Does the small company criteria affect the obligations for filing financial statements with ACRA?
A: No. The obligations for filing financial statements are determined by whether the company is a solvent exempt private company. There are no changes to the current criteria for determining the obligation for filing financial statements.
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