Drafting of Auditor's and Director's Reports Services in Singapore

Do My Accounts Need to Be Audited?

Not all companies in Singapore are required to undergo an audit. Under the Companies Act, businesses may be exempt from auditing if they meet the following criteria:

• Incorporated as an exempt private limited company
• Annual revenue of less than S$5 million
• 20 or fewer individual shareholders with no corporate shareholders
• Classified as a dormant company

Companies that do not qualify for these exemptions must appoint an independent auditor within three months of incorporation. Audited accounts must then be submitted annually to the Accounting and Corporate Regulatory Authority (ACRA) along with the company's Annual Returns.

Even exempt companies must submit a Directors' Report, which includes critical financial information.

What is an Auditors' Report?

An Auditors' Report, as required under Section 207 of the Companies Act, provides an independent opinion on a company's financial statements. It evaluates whether:

• The accounts comply with the SFRS.
• The financial statements present a true and fair view of the company's financial position.
• The accounting records have been properly maintained.
• Any irregularities or defects in the accounts exist.

This report is an integral part of the company's audited accounts and must be submitted to ACRA annually. Consistency between the Auditors' Report and the Directors' Report is crucial to maintain compliance and transparency.

Elements of an Auditors' Report

An Auditors' Report typically includes the following sections:

1. Introduction

   • Details of the audit engagement, including scope, financial period, and key statements audited (e.g., income statement, balance sheet).

2. Management's Responsibility

   • Highlights the management's role in preparing financial statements and ensuring robust internal controls.

3. Auditors' Responsibilities

   • Explains the audit process, accounting standards used, and evaluation of accounting policies and estimates.

4. Opinion

   • Provides the auditor's opinion on whether the financial statements are accurate and compliant with regulations.

5. Report on Other Legal and Regulatory Requirements

   • Confirms whether the company's accounting records are maintained as per legal standards.

What to Look for in an Auditors' Report

The most critical aspect of an Auditors' Report is the auditor's opinion:

• Unqualified Opinion: Indicates that the financial statements present a true and fair view without issues of transparency or compliance.
• Qualified Opinion: Highlights concerns such as scope limitations or disagreements over accounting policies.
• Adverse Opinion: Rare but serious, this indicates significant misrepresentation in the financial statements.
• Emphasis of Matter: Draws attention to specific concerns, such as insolvency risks, without affecting the overall opinion.

Implications of an Auditors' Report

An Auditors' Report impacts:

1. Regulatory Compliance

   • Directors are held accountable for qualified or adverse opinions and may face scrutiny under ACRA's Financial Reporting Surveillance Programme (FRSP).
   • Sanctions for breaches include warnings, fines, or prosecution.

2. Stakeholder Confidence

   • The report is publicly available through ACRA and accessible to investors, partners, and customers.
   • An unqualified report reflects well on the company's governance and internal controls.

Why Choose Apexia Corporate Advisory for Auditors' Reports?

At Apexia Corporate Advisory, we:

• Work with specialized auditors to ensure your financial statements meet all regulatory requirements.
• Help maintain consistency between your Directors' and Auditors' Reports.
• Provide proactive support to address potential audit concerns early.

Contact Apexia Corporate Advisory Today. Need assistance with auditing and financial reporting? Partner with Apexia Corporate Advisory for seamless guidance and compliance. Get in Touch to learn how we can support your business in preparing and managing Auditors' Reports.