FAQs

Frequently Asked Questions:

QUESTION (1): What is the audit exemption criteria?
  Answer: Before 1 July 2015, a company is exempted from having its accounts audited if it is an exempt private company with annual revenue of $5 million or less. This approach is being replaced by a new small company concept which will determine exemption from statutory audit. Notably, a company no longer needs to be an exempt private company to be exempted from audit. A company qualifies as a small company if: (a) it is a private company in the financial year in question; and (b) it meets at least 2 of 3 following criteria for immediate past two consecutive financial years: (i) total annual revenue ≤ $10m; (ii) total assets ≤ $10m; (iii) no. of employees ≤ 50. For a company which is part of a group: (a) the company must qualify as a small company; and (b) entire group must be a “small group” to qualify to the audit exemption. For a group to be a small group, it must meet at least 2 of the 3 quantitative criteria on a consolidated basis for the immediate past two consecutive financial years. Where a company has qualified as a small company, it continues to be a small company for subsequent financial years until it is disqualified. A small company is disqualified if: (a) it ceases to be a private company at any time during a financial year; or (b) it does not meet at least 2 of the 3 the quantitative criteria for the immediate past two consecutive financial years. Where a group has qualified as a small group, it continues to be a small group for subsequent financial years until it does not meet at least 2 of the 3 the quantitative criteria for the immediate past two consecutive financial years.

QUESTION (2): If we meet the criteria with the Small Company Concept for Audit Exemption (effective in 1 July 2015), why should we continue to have our company account audited?

Answer: In the UK where audit exemption on small companies has long been implemented, companies close to the audit exemption threshold and larger small companies have continued to have their accounts audited. 32% of small companies qualified for audit exemption, persist to perform voluntary audits as the directors perceive the advantages of the practice (Collis, 2008). The main factors are: • Creditors or shareholders have insisted upon it; • To maintain consistency with earlier accounts; or • Because the companies are close to the small company threshold. Where a company is exempted from audit but still continues to have its accounts audited, it will send out a strong signal that: • It regards its own financial management as a high priority; • The financial information which it publishes stands up to external examination; • It is confident enough about the quality of its operations to allow external scrutiny.

QUESTION (3): How to choose an auditor for my business?

Answer: In Singapore, only persons registered as public accountants under the Accountants Act (the Act) can provide public accountancy services and appointed as a company auditor. When choosing a prospective auditor, the company should ask about the qualifications of the individual or the firm: • What are your qualifications and are you a registered public accountant with ACRA? • What is the basis on which fees are charged? • Do you have experience in this business sector? • What are the experience and qualifications of the persons who would be working on the audit? • What additional services can you offer? Working with a qualified accountant as a business advisor will ensure that more SMEs survive, prosper and contribute to overall economic development. At CS Liew & Co, our core audit value is based on “IPCT” principles that lead by engagement audit partner and support by a team of audit professional with different background and experiences cover by many industries in order to serve our client need and to ensure quality audit work performed:- (1) INTEGRITY : We treat every commitment seriously and we strongly believe “Audit Quality” is the cornerstone of reliable financial statement and benefit to various stakeholders. Those audit engagements we decided to accept are liaised with firm available resources and capabilities without compromise the audit quality. (2) PROFESSIONALISM:  Our audit team are qualified and well-trained to ensure technical competency to suit the demand of different industry and scope of work for them to perform the audit task in accordance with latest development of reporting and auditing standards. (3) COMMUNICATION: One of our important audit approach is to communicate clearly with those charged with governance (included director) the key audit matters during the planning stage for them to have sufficient time to response and take the necessary remedial action to avoid last minutes surprise. In addition, we provide them with timely observations arising from the audit that are significant and relevant to their responsibility to oversee the financial reporting process included deficiencies in internal control. We believe effective two-way communication between the auditor and those charged with governance is the important foundation to build up the confident and improving financial reporting process. (4) TECHNOLOGY: We invested in technology & software for us to analyse better to identify risk and perform audit more efficiently to ensure audit efficiency.