Singapore’s Audit Exemption Framework Is Under Review: What Small Companies Should Know

Singapore is reviewing its audit exemption framework for small companies, a development that could affect which private companies are required to have their financial statements audited in the future.

For business owners and finance teams, it is important to understand what is being reviewed — and what the current requirements remain.

What Is the Current Audit Exemption?

Under Singapore's current framework, a private company may qualify as a small company for audit exemption if it meets at least two out of three criteria for each of the two financial years immediately preceding the current financial year:

• Total annual revenue of not more than S$10 million

• Total assets of not more than S$10 million

• No more than 50 employees

For a company that is part of a group, additional group-level requirements currently apply.

What Is Changing?

ACRA announced in February 2026 that it is reviewing the existing framework.

One area being considered is whether the revenue and total asset thresholds should be increased. ACRA is also considering whether certain subsidiaries could qualify for audit exemption even where the overall group does not satisfy the existing consolidated thresholds.

Importantly, this is a review of the framework. Businesses should not assume that the existing S$10 million thresholds have already been replaced.

Audit Exemption Does Not Mean Accounting Exemption

This is an important distinction.

Even where a company qualifies for audit exemption, it must continue to maintain proper accounting records and prepare financial statements in accordance with the applicable accounting standards.

ACRA has also highlighted that shareholders holding at least 5% of the company's issued shares retain the right to require an audit.

An audit may also remain useful in situations involving shareholders, lenders, investors, group reporting, transactions or other stakeholder requirements.

What Should Businesses Do?

Companies approaching the existing audit exemption thresholds should review their position carefully rather than assuming they will automatically become exempt under a future framework.

Businesses should consider their:

Revenue · Total Assets · Employee Count · Group Structure · Shareholder Requirements · Financing Requirements

Early assessment can help management plan the year-end reporting and audit process more effectively.

How Lee & Partners PAC Can Help

Lee & Partners PAC provides audit and assurance, accounting and financial reporting support to Singapore businesses.

If you are uncertain whether your company requires an audit, our team can review your circumstances and help you understand the applicable requirements.

Speak with us about your audit requirements.

This article is intended for general information only and does not constitute professional advice. Requirements should be assessed based on the specific circumstances of each entity.

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