The most suitable type of business structure in Singapore is a private limited enterprise. It offers incentives including limited liability, tax savings and simple commitments to comply. The Singapore Companies Act recently introduced the definition of a small business, which exempts private limited companies that meet certain requirements from the annual audit requirement. It helps reduce the company’s cost of compliance, as well as the overall regulatory burden.
Company audits are essential to ensuring the company’s financial statements are accurate and honest. The Companies Act, therefore, lays down guidelines for certain aspects of company audits, such as hiring auditors and which firms are exempted from audit guidelines. A company’s directors are expected to nominate at least one accounting firm to be the auditor of the company within three months of incorporation. In Singapore, only public accountants or accounting firms, who have been licensed, by the Accounting and Corporate Regulatory Authority (ACRA) can serve as auditors of companies.
The Auditor Services Singapore are listed below which are mostly brought into the use of every auditor:
- Auditors must hold office from the moment they are appointed until the next Annual General Meeting (AGM) of the organization is concluded. And when a newly-incorporated corporation first appoints an auditor, the auditor must hold office until the first AGM of the corporation is concluded.
- Then, after the first AGM, the firm would have to designate a new accounting entity to serve as the auditor of the company before the next AGM is concluded.
- The auditor will then hold office until the subsequent AGM of the business is ended, and so on.
To add on, the Singapore Companies Act specifies that each company must be audited regularly by an auditor to obtain its financial statements and accounting records unless the company satisfies the condition for the audit exemption. Many businesses of a certain scale need at least once a year a full independent audit and this has been the case for decades. The reasons are clear, in that someone who is not part of the company but depends on the company for profit has the right to know how the company can afford to transact and pay its bills.