Audit exemptions: Small company concept
Learn when your private company qualifies for audit exemption under the small company concept. This exemption applies to financial years beginning on or after 1 July 2015.
Last updated 3 February 2026
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Who qualifies for audit exemption
To qualify for audit exemption as a small company, you need to meet both of these criteria:
Your company is a private company in the financial year; and
Your company meets at least two of these quantitative criteria for the immediate past two consecutive financial years:
Total annual revenue of $10 million or less, based on your financial statements prepared in accordance with the accounting standards
Total assets of $10 million or less, based on your financial statements prepared in accordance with the accounting standards
50 employees or fewer, based on the number of full-time employees at the end of your financial year
Detailed exemption criteria
If your company is newly incorporated (less than two years old)
You qualify for audit exemption if you meet the criteria in the current financial year.
Example:
First financial year: Check if you are a private company and meet two out of three quantitative criteria that year.
Second financial year: If you did not qualify in the first year, check again using the same requirements for the second year.
If your company is part of a group
You need to meet both of these conditions to qualify for audit exemption:
Your Singapore company or subsidiary qualifies as a small company; and
Your entire group (including foreign entities) meets at least two of these quantitative criteria for the immediate past two consecutive financial years:
Total annual revenue of $10 million or less, based on your holding company's consolidated financial statements prepared in accordance with the accounting standards
Total assets of $10 million or less, based on your holding company's consolidated financial statements prepared in accordance with the accounting standards
50 employees or fewer, based on the number of full-time employees at the end of your financial year
Note: The audit exemption applies to financial years beginning on or after 1 July 2015.
Maintaining your exemption status
Once your company qualifies as a small company, you remain qualified in subsequent financial years unless:
You cease to be a private company at any time during a financial year; or
You do not meet at least two out of three criteria for the immediate past two consecutive financial years
Once your group qualifies as a small group, it remains qualified for subsequent financial years. This applies until it does not meet at least two out of three criteria for the immediate past two consecutive financial years.
Frequently asked questions (FAQs)
Can companies with corporate shareholders get audit exemption?
Yes, you can qualify for audit exemption even if you have corporate shareholders.
Unlike the previous criteria, you do not need to be an exempt private company to qualify for audit exemption.
Does the small company criteria affect financial statement filing?
No, it does not change your financial statement filing requirements.
Is audit exemption only for private companies? What are the criteria?
Yes, audit exemption is for private companies.
Section 205B of the Companies Act exempts a dormant company from audit requirements. A dormant company is not limited to a private company.
Section 205C read with the Thirteenth Schedule of the Companies Act exempts a small company from audit requirements. This exemption is only applicable to private companies.
My company does not file consolidated financial statements, so can my company be a small company rather than a small group?
In deciding whether a company should be treated as a small company or a small group for the purpose of being exempted from audit requirements, the company would need to refer to section 205C read with the Thirteenth Schedule of the Companies Act. In particular, para 12(a) of the Thirteenth Schedule of the Companies Act states that “the question whether an entity is part of a group is to be decided in accordance with the Accounting Standards”.
If the company is owned by another company (i.e. parent company), it will need to assess whether it belongs to a small group, regardless of whether it prepares and/or file consolidated financial statements.
For a company preparing its first-year consolidation account, does it need to assess if the previous two years is a small entity? Or does the assessment start from the first year of consolidation?
The assessment will be based on the past two years financials.
On whether a company is a small company or a small group for the purpose of being exempted from audit requirements, the company would have to refer to section 205C read with the Thirteenth Schedule of the Companies Act. In particular paras. 7, 8 and 9 of the Thirteenth Schedule set out the situations in which the criteria for audit exemption should be applied to the first financial year of consolidation or the two financial years preceding the financial year of consolidation.