All Singapore companies need to appoint an auditor within three months of incorporation unless they are deemed exempt. If an entity is under the Small Company or Small Group classification, they are considered exempt.
According to the Companies Act, an entity is considered a small company when it has the following qualities:
The Companies Act considers a company as part of a group when:
Meeting these criteria means a company is exempted from a statutory audit.
A group is considered a small group if it fits at least two of the three criteria specified above on a consolidated basis for the immediate past two subsequent financial years:
A small group together with all the other groups under a company is considered a small company until such time it becomes disqualified. The following qualities disqualify a small company:
In a situation where a group still has a qualifying small group: If it fits at least two of the three criteria specified above on a consolidated basis for the immediate past two subsequent financial years, it is still considered a small group.
Important things to note:
Section 173A(1) of the Companies Act stipulates that within 14 days a person is appointed as a director, chief executive officer, secretary or auditor; and within 14 days after the changes in the appointment of the key persons previously stated, the company needs to lodge a notice with the ACRA Registrar.
Failure to comply is an offence under section 173H(1) of the Act and will result in a fine not exceeding $5,000. Each default officer of the company will be held accountable.