Company accounting Services


The Institute of Chartered Accountants of Singapore (ISCA) has approximately 28,000 members and is the national body representing the accounting profession in Singapore. On 1 April 2013, the Institute of Chartered Accountants of Singapore was officially appointed by the Accounting Board of Singapore as the subject of the Singapore Qualification Scheme (Singapore QP). Candidates who successfully complete disfore The Singapore QP will be awarded the globally recognized Singapore Chartered Accountant – CA (Singapore) – title. The Accounting and Enterprise Control Authority (ACRA) of Singapore implements the Companies Act and the Accounting Act. On this basis, it regulates whether directors comply with the accounting standards and requirements required by the Companies Act in relation to the preparation and presentation of financial statements. The Singapore Accounting and Enterprise Control Board also ensures that accountants who perform statutory audits comply with relevant audit and quality control standards when auditing financial statements. The Public Accountants Registry of the Singapore Accounting and Enterprise Control Board is licensed and registered with accountants who wish to be public accountants. The Singapore Accounting and Enterprise Control Board also deals with practice supervision and discipline matters and regulates the professional conduct of public accountants.

 

Accounting records
All companies incorporated under the Singapore Companies Act must keep books that adequately account the company’s transactions and financial position. These records must also be prepared for the preparation of genuine and fair financial statements from time to time. Businesses can choose the end point of their fiscal year. Books may be kept in the company’s registered office or elsewhere as the directors deem appropriate. If the books are kept outside Singapore, adequate records must be kept in Singapore to facilitate the preparation and/or audit of financial statements that accurately reflect the financial position of the Company. Accounting records must be kept for at least five years from the end of the financial year in which the relevant transaction or operation has been completed. Singapore Financial Reporting Standards (FRS) are regulated and promulgated by the Accounting Standards Board (ASC), which issues accounting standards that apply to both corporate and non-enterprise sectors. At the same time, the Accounting Standards Board closely follows and introduces new International Financial Reporting Standards (IFRS) that may apply in Singapore, which will also take into account local economic and business circumstances and backgrounds, as well as entities that may apply accounting standards.
The IFRS issued by the Accounting Standards Board are modelled on IFRS and are largely consistent with the interpretation of IFRS, the effective date and certain changes to the transitional provisions.
Compliance with IFRS is a statutory requirement and any non-compliance is tantamount to a breach of the Companies Act by a director. Companies publicly listed in Singapore are subject to financial statements and disclosure requirements set out in the Singapore Exchange (SGX). The Accounting Standards Board adopted IFRS for SMEs as the Singapore Small Entities Financial Reporting Standard (SFRS) in November 2010. This is to provide a replacement financial reporting framework for small entities. Financial Reporting Standards for small entities in Singapore are valid for the financial reporting period beginning on or after 1 January 2011. Singapore Small Entities’ FINANCIAL Reporting Standards for small entities identify small entities using applicable standards similar to IFRS for SMEs. Small entities are one: no public fiduciary responsibility, and generic financial statements are published for external users. However, THE SINGAPORE SMALL ENTITY IFRS FOR SMALL ENTITIES INTRODUCE ADDITIONAL ELEMENTS TO THESE DEFINITIONS. To be defined as a small entity, the business must also meet at least two of the following three quantitative criteria: total annual revenue of no more than S$10 million, total assets of s$10 million, and total employees of no more than 50 people.

 

Singapore Companies Act
The Companies Act requires audited company financial statements prepared during the first half of each Annual General Meeting (AGM) to be distributed to all shareholders and presented at meetings. In general, if a company incorporated in Singapore has one or more subsidiaries, the consolidated financial statements must be prepared unless they meet the specific criteria set out in IFRS 110 consolidated financial statements.
A complete set of financial statements includes:
  • Statement of financial position;
  • Income and loss and other consolidated income statements;
  • Statement of changes in equity;
  • Statement of cash flows;

Note: Other informational financial statements required for the presentation of FINANCIAL Reporting Standards No. 1 must be accompanied by directors and auditor reports. Directors must also state that the financial statements are true and fair and reflect the company’s financial position and have reasonable grounds to believe that the Company is in a position to reasonably repay the debts due. A branch of a foreign company must submit the audited financial statements and the audited financial statements of the foreign company to the Accounting and Enterprise Authority of Singapore in electronic form within two months from the date of the annual general meeting of the foreign company.

Appoint auditors

The Companies Act provides that each company, including a branch of a foreign company, appoints one or more auditors who are qualified under the Accounting Act to report on the company’s financial statements. This provision does not apply to companies that have been exempted under the Companies Act (see audit exemption below).

Audit exemptions

The following companies that comply with the specific provisions of the Companies Act may be exempted from financial statement audits. However, they still need to prepare financial statements (and, where applicable) financial statements that comply with the Companies Act and IFRS.

In order to reduce the institutional burden on small companies and to establish risk-based mechanisms, the new amendment introduced the concept of a new small company to exempt audit requirements of such small companies. The new audit exemption system applies to companies established after July 1, 2015 or companies with a financial year later than July 1, 2015.

The conditions are:

Prior to the new regulations, a Singapore company with an annual turnover of s$5 million would be exempt from audit.

Under the new regulations, companies that meet the following criteria are defined as “small companies” exempt from auditing:

a) A private company during the financial year, and

b) In the first two financial years, at least 2 of the following three conditions are met

1. Annual total turnover of less than S$10 million

2. Total assets of less than S$10 million

3. Less than 50 employees
For companies that belong to a group of companies:

a) The company must meet the requirements of “small company”

b) The entire Group company must be a “small group company” (“small group” must also meet any of the three conditions in the definition of “small company”) in order to meet the requirements of audit exemption.

Dormant Companies:

If (a) dormant companies that have been dormant since the beginning of their existence or (b) have been dormant since the end of the last financial year, may waive appointment auditors and audit requirements. Periods that occur without transactions are considered dormant, and the company terminates hibernation when transactions occur. To this end, the

Transactions are not counted:

  • Memorandum signatory acquires shares in the company
  • Appoint Company Secretary
  • Appoint auditors
  • Maintenance of registered offices
  • Keeping registers and books
  • Fees, fines or penalties for breach of contract paid to the Accounting and Enterprise Authority of Singapore

 

Note: The Singapore Corporation (Amendment) Regulation Draft was passed by Parliament on 8 October 2014. The amendment is expected to take effect in the second quarter of 2015. When the amendments to the Companies Act come into effect, please refer tothe http://statutes.agc.gov.sg

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