A Singapore private company can generally first qualify for the small-company audit exemption when it meets at least two of three thresholds for the immediate past two consecutive financial years: annual revenue of S$10 million or less, total assets of S$10 million or less, and 50 employees or fewer. Once qualified, it remains qualified until it ceases to be private or fails that two-out-of-three test for the immediate past two consecutive financial years. Parents and subsidiaries must also assess the small-group test. New and dormant companies have separate rules. Audit exemption does not remove accounting-record, financial-statement or filing duties. ACRA announced a review in 2026, so verify the current rules before relying on them.

Identify the exact company and financial year

Begin with the registered entity, company type and financial year under review. Do not assess the trading brand or the founder's whole business informally. Confirm whether the entity is a private company, public company, parent, subsidiary, newly incorporated company or dormant company, because those facts change the route through the audit rules.

Record the financial-year start and end dates, the incorporation date and any changes in company status. Then map the corporate group under the applicable accounting standards. A Singapore subsidiary can be small on its own numbers yet still fail the audit-exemption test if the group does not qualify as a small group.

  • Registered name, UEN and company type.
  • Financial year being assessed.
  • Incorporation date and any status changes.
  • Parent, subsidiaries and other group entities.
  • Accounting framework used to determine group membership.

Apply the two-out-of-three small-company test

Under ACRA's current published framework, a private company first qualifies as a small company when it meets at least two of three quantitative criteria for the immediate past two consecutive financial years. The criteria are total annual revenue of S$10 million or less, total assets of S$10 million or less, and 50 employees or fewer. Revenue and assets come from financial statements prepared under the applicable accounting standards; employee count uses full-time employees at financial year end.

Continuing qualification has a separate branch. Once a company qualifies, ACRA says it remains qualified in later years unless it ceases to be private or does not meet at least two of the three criteria for the immediate past two consecutive financial years. Build a two-year worksheet, but identify whether it is testing first qualification or continuing status. Show each threshold, the source record and the result for each year. If accounting adjustments, an acquisition, a disposal or a short financial year affects the figures, flag the treatment for the accountant or auditor instead of forcing the number into a simple yes-or-no template.

  • Annual revenue for each relevant financial year.
  • Total assets at each relevant year end.
  • Full-time employee count at each year end.
  • Financial statements and payroll evidence supporting the figures.
  • For first qualification, at least two criteria met in both relevant years.
  • For continuing status, whether the company ceased to be private or failed the test for two consecutive years.

Run the small-group test for parents and subsidiaries

A parent company or subsidiary must not stop at the entity-level test. ACRA states that the Singapore company must qualify as a small company and the entire group must meet at least two of the same three thresholds on a consolidated basis for the immediate past two consecutive financial years. Once a group qualifies as a small group, it remains qualified until it fails that test for the immediate past two consecutive financial years. The group assessment can include foreign entities.

Use the ownership chart, consolidation conclusions and group financial statements to document the analysis. Whether an entity belongs to a group is determined under the accounting standards, not merely by whether management happened to prepare consolidated statements. If the ownership chain or consolidation treatment is uncertain, obtain accounting advice before claiming an exemption.

  • Current legal-entity and ownership chart.
  • Consolidation assessment under the accounting standards.
  • Group revenue, assets and employee counts for both years.
  • Foreign-entity figures translated and reconciled consistently.
  • Entity-level and group-level conclusions recorded separately.

Handle new and dormant companies separately

A newly incorporated company with less than two years of history uses the criteria available for its current financial year. ACRA explains that a company can qualify in its first financial year if it is private and meets two of the three thresholds in that year. If it does not qualify in year one, it assesses the same requirements again in year two.

Dormant companies have a separate statutory audit-exemption route under section 205B of the Companies Act. Dormancy for audit purposes should not be assumed merely because revenue is low or the business paused. Record transactions, assets, liabilities and the relevant statutory conditions, and ask the accountant or company secretary to confirm which exemption route applies.

  • First and second financial-year figures for a new company.
  • Dates and transactions relevant to claimed dormancy.
  • Whether the company is relying on section 205B or the small-company test.
  • Professional confirmation where the route is uncertain.

Do not confuse audit exemption with other filing duties

Audit exemption answers whether the financial statements require a statutory audit. It does not automatically answer whether financial statements must be prepared, whether they must be filed in XBRL, whether the annual return is due, or whether tax filings are required. ACRA expressly notes that the small-company audit exemption does not change financial-statement filing requirements.

Keep a separate compliance calendar for accounting records, financial-statement preparation, any XBRL filing, the annual general meeting or applicable exemption, the annual return and tax filings. The declaration made in Bizfile should match the evidence file. Do not tick an audit-exemption declaration simply because an external audit has not been arranged.

  • Accounting-record retention and completeness.
  • Financial-statement preparation requirement.
  • XBRL format and filing assessment.
  • Annual return and AGM dates.
  • Separate corporate-income-tax obligations.

Prepare an audit-requirements evidence pack

Keep the assessment short enough to review but detailed enough to reproduce. Include the company profile, constitution if relevant, ownership chart, two years of entity and group financial statements, payroll headcounts, consolidation conclusion, prior audit reports, annual-return declarations and advice received from the accountant, auditor or company secretary. Record the date on which official guidance was checked.

ACRA announced a review of the audit-exemption framework in February 2026. A review announcement is not itself a change to the thresholds, but it is a reason to verify the current ACRA page and Companies Act for the financial year being assessed. A financing agreement, shareholder right, regulator, licence or group policy may also require audited information even where the statutory small-company exemption is available.

  • Entity and group identity records.
  • Threshold worksheet with source figures.
  • Consolidation and dormancy conclusions where relevant.
  • Contractual, lender, investor or regulatory audit requirements.
  • Dated official sources and professional advice.

Know when the checklist is not enough

Escalate the assessment when the company is near a threshold, is part of a changing or foreign group, has incomplete records, changed its financial year, acquired or disposed of entities, claims dormancy, or faces a shareholder request for audited accounts. Also escalate when a lender, investor, licence or transaction imposes its own assurance requirement.

JurisLane does not provide the audit or decide accounting treatment through this page. The checklist helps a growing company prepare the facts and questions that a Singapore accountant, auditor, company secretary or lawyer needs. Keep the statutory conclusion and any commercial decision about commissioning an audit as separate, documented decisions.

  • Near-threshold or inconsistent figures.
  • Complex group or foreign-parent structure.
  • Dormancy or first-year uncertainty.
  • Shareholder, financing or licence requirements.
  • Missing records or disputed accounting treatment.

Sources and discussion

Related resources

Prepare the next step

Use the company setup checklist to assemble entity and group records, then confirm the current audit conclusion with a Singapore accountant, auditor or company secretary before making a filing declaration.

Explore JurisLane services

Editorial note: This guide supports issue preparation and qualified review. Applicable requirements depend on the facts, entities, markets and current law.