Does My Singapore Company Need a Statutory Audit in 2026?

Quick answer

A Singapore company generally requires a statutory audit unless it qualifies for an exemption under the Companies Act 1967.

An active private company may qualify for the small-company audit exemption if it satisfies at least two of the following three conditions:

• Annual revenue of S$10 million or less
• Total assets of S$10 million or less
• 50 or fewer employees

Companies belonging to a group must normally assess both the individual company and the entire group. Dormant companies may qualify under a separate exemption.

These thresholds remain the current rules as at 25 August 2026. ACRA is reviewing the audit-exemption framework, but companies should not assume that proposed changes have taken effect until new legislation or official guidance is issued.

Why does a company need an audit?

A statutory audit is an independent examination of a company’s financial statements. The auditor obtains evidence about the company’s financial information and reports whether the financial statements are prepared, in all material respects, in accordance with the applicable financial-reporting framework.

An audit can help shareholders, directors, lenders, investors and other stakeholders obtain greater confidence in the company’s financial statements.

The small-company audit exemption

To qualify as a small company for a financial year, the company must first be a private company. It must then satisfy at least two of the following three criteria:

• Annual revenue of S$10 million or less
• Total assets of S$10 million or less
• 50 or fewer employees

For an existing company, these conditions are generally assessed over the two financial years immediately preceding the current financial year.

Example 1: The company may qualify

ABC Pte. Ltd. has annual revenue of S$8 million, total assets of S$6 million and 60 employees. It meets the revenue and total-assets criteria and may therefore satisfy the quantitative small-company test, even though it has more than 50 employees. The company must still consider whether it is part of a group and whether any other audit requirement applies.

Example 2: The company does not qualify

XYZ Pte. Ltd. has annual revenue of S$12 million, total assets of S$11 million and 30 employees. It satisfies only the employee criterion and therefore does not meet the requirement to satisfy at least two of the three criteria. Unless another exemption applies, it will require a statutory audit.

What if the company is newly incorporated?

A newly incorporated company with fewer than two financial years does not need to wait for two complete years before assessing its position. For its first financial year, it may qualify if it is a private company and satisfies at least two of the three criteria in that financial year.

A newly incorporated company that is not exempt must generally appoint an auditor within three months of incorporation.

What if the company belongs to a group?

Being individually small does not automatically provide audit exemption to a company that belongs to a group. A parent or subsidiary generally needs to satisfy both of the following:

1. The individual company qualifies as a small company.
2. The entire group qualifies as a small group.

The group test applies on a consolidated basis and includes relevant overseas entities. The small-group criteria use the same S$10 million revenue, S$10 million total-assets and 50-employee thresholds.

This assessment may be required even where the company does not prepare or file consolidated financial statements. Whether entities form a group is determined by the applicable accounting standards, rather than only by whether consolidated accounts are filed.

What about dormant companies?

A dormant company may qualify for a separate audit exemption under section 205B of the Companies Act. Dormancy should be assessed carefully. A company should not assume that it is dormant merely because it has little income, has temporarily stopped trading or has no employees. Certain transactions may affect its dormant status.

Can shareholders still request an audit?

Yes. Members holding at least 5% of the company’s issued shares, or at least 5% of the total number of members, may require an otherwise exempt company to obtain an audit.

The request must be made by written notice during the relevant financial year and no later than one month before the end of that financial year. The Registrar may also require an exempt company to lodge audited financial statements in certain circumstances.

Audit exemption does not remove accounting obligations

An audit exemption does not mean that a company can stop maintaining accounts. An exempt company must still, where applicable:

• Keep proper accounting and supporting records
• Prepare financial statements in accordance with the applicable accounting standards
• File its annual return
• File financial statements or XBRL information where required
• Submit corporate income tax returns and ECI where applicable
• Maintain adequate supporting documents for transactions and balances
• Comply with GST, payroll and other regulatory obligations

Proper accounting records are also important if the company later exceeds the exemption thresholds, seeks financing, admits investors or undergoes a transaction.

Other situations where an audit may be required

A company may require an audit even if it appears to meet the small-company criteria. Examples include:

• A shareholder has validly requested an audit
• A bank or lender requires audited financial statements
• An investor, purchaser or holding company requires an audit
• A grant, licence or regulatory condition requires audited information
• The company operates in a regulated sector
• The company is subject to specific charity, fund, MCST or other legislation
• The company’s constitution or shareholders’ agreement requires an audit
• The company is included in a group audit

These requirements should be assessed separately from the Companies Act small-company exemption.

Should an exempt company obtain a voluntary audit?

An exempt company may still choose to have its financial statements audited. A voluntary audit may be useful where the company plans to obtain bank financing, is preparing for investment or a sale, has multiple or non-managing shareholders, operates through several related entities, or wants greater confidence in its financial reporting.

However, an audit is not a substitute for proper bookkeeping, management controls or directors’ oversight.

Is Singapore changing the audit-exemption thresholds?

In February 2026, ACRA announced a review of the audit-exemption framework. The review includes considering whether the revenue and asset thresholds should be increased and whether certain subsidiaries might qualify even when their wider group does not satisfy the existing small-group test.

At the date of this article, companies should continue applying the existing thresholds unless and until an official change takes effect.

Practical audit-requirement checklist

• Is the company active or dormant?
• Is it a private company?
• Does it meet at least two of the three small-company thresholds?
• Have the correct financial years been assessed?
• Does the company belong to a local or overseas group?
• Does the entire group qualify as a small group?
• Has any shareholder requested an audit?
• Is an audit required by a lender, investor, regulator or agreement?
• Is the company subject to another statutory or industry-specific regime?
• Have proper accounting records and financial statements been prepared?

How LN can assist

LN CO Assurance provides statutory audit and assurance services for Singapore companies and other organisations. LN Corporate Services provides accounting, tax and corporate-secretarial support. The availability of non-audit services to an audit client is subject to applicable independence and ethical requirements.