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Your Checklist for a Successful Statutory Audit in Singapore

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Your Checklist for a Successful Statutory Audit in Singapore

A statutory audit is a critical part of the financial year-end for many companies in Singapore. It ensures compliance with the Companies Act and the Singapore Financial Reporting Standards (SFRS), and reassures shareholders, stakeholders, and regulators of your company’s financial integrity. While some small companies qualify for audit exemption, the majority of medium and large businesses must undergo this process annually.

For companies preparing for their audit, knowing what to expect and how to prepare can make the process smoother, faster, and more efficient. In this guide, we provide a comprehensive checklist to help businesses in Singapore successfully complete their corporate statutory financial audit.

Why Preparation Is Important

A statutory audit can be time-consuming and costly if a company is unprepared. Missing documents, delayed responses, and lack of internal controls often lead to prolonged audit timelines, increased fees, and even qualified audit opinions. On the other hand, a well-prepared company can benefit from an efficient audit, strong financial reporting, and valuable insights into operations.

Whether you’re preparing for your first audit or want to improve your current process, this checklist will ensure your company is ready to meet its obligations under Singapore law.

✅ Statutory Audit Preparation Checklist

Here is a step-by-step checklist to help Singaporean companies prepare for a successful statutory audit.

✅ 1. Confirm Audit Requirement

Before diving into audit preparations, verify if your company is required to undergo a statutory audit. A private limited company in Singapore is exempted if it qualifies as a small company:

  • Total revenue ≤ S$10 million

  • Total assets ≤ S$10 million

  • Number of employees ≤ 50

If your company does not meet at least two of these criteria for the past two financial years, it must complete a corporate statutory financial audit in Singapore. More information is available at:
https://www.auditservices.sg/corporate-statutory-financial-audit-singapore/

✅ 2. Select an ACRA-Approved Audit Firm

Choosing the right audit partner is essential. Ensure the audit firm is registered with the Accounting and Corporate Regulatory Authority (ACRA). Consider firms with experience in your industry and a strong reputation for reliability and timely service.

✅ 3. Organize Financial Records

Gather all necessary financial documents for the financial year being audited. These typically include:

  • General ledger and trial balance

  • Balance sheet and income statement

  • Bank statements and reconciliations

  • Invoices (sales and purchases)

  • Receipts and payment vouchers

  • Loan agreements

  • Fixed asset schedules and depreciation

  • Inventory records (if applicable)

Keeping documents in digital format can also help streamline the audit process.

✅ 4. Reconcile Accounts

Before the auditors begin fieldwork, ensure your accounts are reconciled:

  • Match bank statements with ledger balances

  • Reconcile intercompany transactions

  • Check accounts receivable and payable aging reports

  • Verify GST filings match financial records

Discrepancies should be identified and adjusted before the audit begins.

✅ 5. Review and Finalize Year-End Financial Statements

Auditors will examine your company’s year-end financial statements. Make sure they are:

  • Prepared in accordance with SFRS

  • Accurate and supported by relevant documentation

  • Consistent with prior-year presentations (with explanations for changes)

Auditors will also review comparative figures from previous years, so retaining prior documentation is essential.

✅ 6. Document Internal Controls and Procedures

Auditors are required to understand and assess your internal control environment. Be prepared to explain:

  • Approval workflows (e.g., purchase orders, payments)

  • Access controls over financial systems

  • Fraud prevention procedures

  • Inventory management systems

  • Segregation of duties among staff

If gaps exist, auditors may expand their testing or recommend improvements.

✅ 7. Prepare Board and Management Resolutions

Ensure that all relevant Board of Directors’ and Shareholders’ resolutions are documented, including:

  • Appointment of directors and auditors

  • Dividend declarations

  • Significant acquisitions or disposals

  • Approval of financial statements

These documents support key financial and governance decisions reflected in the audit.

✅ 8. Inventory and Fixed Assets Verification

If your company holds inventory or significant fixed assets, you must:

  • Provide detailed records, including location, quantity, and valuation

  • Conduct year-end stocktake or asset count

  • Maintain depreciation schedules

Auditors may physically verify a sample of inventory or assets.

✅ 9. Prepare Related Party Disclosures

Singapore’s financial reporting standards require disclosure of related party transactions. This includes:

  • Transactions with directors and shareholders

  • Loans between related companies

  • Intercompany transactions within a group

Prepare documentation such as contracts or board minutes to support these disclosures.

✅ 10. Engage in Pre-Audit Discussions

Arrange a pre-audit meeting with your audit firm to:

  • Review the audit timeline

  • Clarify documentation requirements

  • Highlight major transactions or business changes

  • Set expectations for communication and deadlines

Proactive discussions can reduce misunderstandings and surprises later in the process.

Pro Tips for a Smooth Statutory Audit

  • Use Accounting Software: Automating your books with tools like Xero, QuickBooks, or MYOB helps reduce errors and speeds up data retrieval.

  • Assign a Key Liaison: Appoint a finance team member to handle all auditor communications and requests.

  • Review Prior Year Audit Findings: Address any unresolved issues flagged in the previous audit report.

  • Communicate Early: If there are unusual transactions, changes in ownership, or new business activities, disclose them early to your auditors.

  • Be Responsive: Delays in responding to audit queries can lead to timeline extensions and higher fees.

Benefits of a Well-Prepared Statutory Audit

A well-executed statutory audit isn’t just about compliance—it delivers tangible business value:

  • Boosts financial credibility with investors, lenders, and stakeholders

  • Improves internal controls and identifies weaknesses

  • Facilitates business expansion, grant applications, and financing

  • Prevents future penalties from accounting misstatements or non-compliance

  • Supports better strategic decision-making through clearer financial insights

If you’re looking for a reliable audit partner, consider engaging a firm specializing in corporate statutory financial audit in Singapore.

Conclusion

Preparing for a statutory audit doesn’t have to be overwhelming. With the right checklist, proactive planning, and the support of a competent audit firm, your company can complete the audit efficiently, cost-effectively, and with confidence.

Singapore’s commitment to high standards of financial reporting means statutory audits will remain a core part of doing business here. Companies that take the process seriously are better equipped to manage risks, attract funding, and scale sustainably.

Start your preparation early, stay organized, and work collaboratively with your auditors. For end-to-end support, expert firms like https://www.auditservices.sg/corporate-statutory-financial-audit-singapore/ can guide you through every step.

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