An audit exemption removes the audit, not the accounts. A Singapore company that qualifies must still keep proper accounting records and prepare financial statements under the prescribed accounting standards, and its directors remain responsible for them. Without an auditor to catch errors, the quality of the preparation is entirely yours.
Facts checked: 16 October 2026 against ACRA's pages on audit exemptions. This is a process guide, not legal advice. For the exemption test itself, see Singapore audit exemption: the small company test.
Why self-prepared accounts need more care
Two things change when there is no audit:
- Nobody independent checks the numbers. Errors that an auditor would query stay in the accounts.
- Others may still rely on the numbers. Banks, investors and shareholders holding at least 5% of shares (who can require an audit) may look closely at them.
A checklist for the year
- Record transactions as they happen. Catching up at year-end is the main source of errors.
- Reconcile bank accounts monthly. Clear old reconciling items.
- Reconcile debtors and creditors to the ledger, and confirm material balances.
- Reconcile GST returns to the ledger each period.
- Maintain a fixed asset register and recompute depreciation each year.
- Close the books properly: cut-off, accruals, prepayments and provisions.
- Prepare statements and notes under the prescribed standards, with comparatives.
- Ratio-check the result. A margin or balance that moved sharply is often an error.
- Record related-party transactions and director loans clearly.
- Keep a file for every material balance, with the reconciliation, confirmation and working. If a bank, investor or shareholder asks, the file answers.
Watch the tests every year
The exemption depends on size tests over two years. A company that grows can lose it, and then needs an audit. Track revenue, total assets and headcount each year so that the change never surprises you. If the group's size matters, track that too.
Frequently Asked Questions
Do exempt companies still prepare financial statements?
Yes. ACRA says they must still keep proper accounting records and prepare financial statements under the prescribed accounting standards.
Who is responsible for the accounts?
The directors. The exemption removes the audit, not the responsibility.
Can an exempt company lose the exemption?
Yes. If it stops being a private company, or fails two of three size tests for two consecutive years.
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