Exemption from audit
Your company may be exempted from audit requirement if it meet the requirements of an Exempt Private Company (“EPC”) as follow:
• There are no corporate shareholder in the company and the number of shareholders in the company is not more than 20
• Annual revenue of the company does not exceed $5 million for financing years starting on and after 1 June 2004
• Shareholders who represent 5% or more of a company’s ordinary shares does not request for audit
• Banks or other creditors of the company does not request for audit
Compilation of financial statement requirement
A company that is exempted from audit and filing requirement is still required to prepare a full set of financial statements (compilation report) including explanatory Notes to the Accounts, Directors’ Report and the Statement by Directors. These must be prepared in compliance with the Financial Reporting Standards of Singapore (“FRS”).
A compilation report will give you the comfort that the information is compiled with professional competence and due care. It is also sufficient for income tax filing purpose.