Who Can Perform a Statutory Audit in Singapore and Why It Matters

13th Aug

kohlimaudit

Introduction

In Singapore, a statutory audit is more than just a box-ticking exercise. It’s a legal requirement for certain companies and a crucial process that ensures financial transparency and accountability. But while many business owners understand that an audit is required, far fewer know who is actually qualified to perform it. Choosing the right auditor isn’t just about compliance — it impacts the credibility of your financial statements, your relationship with stakeholders, and your ability to make sound business decisions.

This article explores who can perform a statutory audit in Singapore, the professional requirements they must meet, the governing regulations, and why engaging the right audit firm is critical for your business.

1. Understanding What a Statutory Audit Is

A statutory audit is a legally mandated review of a company’s financial statements to ensure they present a true and fair view of the company’s financial position, performance, and cash flows, in accordance with the Singapore Financial Reporting Standards (SFRS).

Only certain professionals are authorised to perform statutory audits, and these qualifications are strictly regulated to maintain the integrity of Singapore’s financial reporting ecosystem.

2. Who Regulates Auditors in Singapore?

The Accounting and Corporate Regulatory Authority (ACRA) is the national regulator of public accountants and accounting entities in Singapore. ACRA is responsible for:

Registering public accountants who are qualified to conduct audits.
Setting auditing standards.
Monitoring compliance and taking disciplinary action for misconduct.

In short, if someone is not registered with ACRA as a public accountant, they cannot conduct a statutory audit for companies in Singapore.

3. The Professional Title: Public Accountant

In Singapore, only public accountants registered with ACRA are authorised to perform statutory audits.
To become a registered public accountant, a candidate must:

Hold the necessary academic qualifications — typically a degree in accountancy from a recognised university or an equivalent qualification.
Complete professional qualifications — such as the Singapore Chartered Accountant (CA Singapore) designation, awarded by the Institute of Singapore Chartered Accountants (ISCA).
Have relevant practical experience — at least two to three years of practical audit experience under a registered public accountant or an approved training organisation.
Pass the Singapore Qualification Programme (Singapore QP) or an equivalent recognised programme.
Meet ongoing Continuing Professional Education (CPE) requirements — to stay updated on accounting and auditing standards.

4. Audit Firms vs. Individual Public Accountants

While individuals can be registered as public accountants, most statutory audits are carried out by public accounting firms or accounting entities.

These firms:

Must have at least one partner who is a registered public accountant.
Are often members of ISCA.
Can provide both statutory and non-statutory audit services, along with advisory and compliance support.

5. The Role of ISCA in Maintaining Standards

The Institute of Singapore Chartered Accountants (ISCA) is the national accountancy body that works closely with ACRA to maintain professional standards.

Membership with ISCA is not mandatory to be a public accountant, but most auditors in Singapore are ISCA members.
ISCA issues practice guidelines, ethics codes, and technical resources to ensure auditors operate at the highest professional level.

6. Why Not Just Any Accountant Can Do an Audit

A common misconception among business owners is that any accountant or accounting firm can perform a statutory audit. This is not true.

Key distinctions:

Accountants can prepare financial statements and management accounts.
Public Accountants (registered with ACRA) can perform statutory audits and sign audit reports.

If a company hires an unqualified person to perform a statutory audit, the audit is invalid, and the company risks non-compliance penalties.

7. Independence Requirements

Auditors in Singapore must be independent from the company they audit. This means:

They cannot have any financial interest in the company.
They must not be involved in preparing the company’s accounts.
They cannot have close relationships with directors or major shareholders that may impair objectivity.

Independence safeguards ensure that the audit opinion is unbiased and based solely on factual evidence.

8. Foreign Auditors and Cross-Border Cases

Foreign auditors can only perform statutory audits for Singapore-incorporated companies if they are registered with ACRA as public accountants.
However:

A foreign audit firm may conduct audits for the group’s overseas subsidiaries or for internal purposes.
For Singapore compliance, only an ACRA-registered public accountant’s signature is legally valid.

9. How to Verify if Someone is a Registered Public Accountant

ACRA maintains a Public Accountants Directory where business owners can:

Search for the name of the auditor or firm.
Verify their registration status.
Confirm they are authorised to conduct statutory audits.

This step is important to avoid engaging unqualified practitioners who may put your business at risk.

10. Penalties for Using an Unqualified Auditor

If a company uses an unqualified person for a statutory audit:

The audit report will be rejected by ACRA or IRAS.
The company may face fines for non-compliance with the Companies Act.
Directors may be held personally liable for failing to appoint a qualified auditor.

11. Why Choosing the Right Auditor Matters

Hiring the right audit firm is not just about legal compliance — it impacts:

Investor confidence: Investors rely on audited accounts to assess the financial health of your business.
Loan approvals: Banks often require recent audited financials before approving credit facilities.
Business reputation: A credible auditor’s name on your report signals professionalism and transparency.
Regulatory standing: A qualified audit firm ensures your financials meet SFRS standards, reducing the risk of regulatory issues.

12. Qualities to Look For in an Audit Firm

When selecting a statutory auditor in Singapore, look for:

ACRA registration — non-negotiable for statutory audits.
Relevant industry experience — auditors familiar with your industry can provide better insights.
Strong reputation — check references and client testimonials.
Communication skills — auditors should explain complex findings in clear terms.
Value-added services — beyond the audit, some firms offer compliance, risk advisory, and process improvement recommendations.

13. The Koh & Lim Audit PAC Advantage

At Koh & Lim Audit PAC, our partners are ACRA-registered public accountants with decades of experience serving Singapore companies across multiple industries.
Our team:

Works with SMEs, public companies, and non-profit organisations.
Ensures full compliance with SFRS and the Companies Act.
Adds value through actionable insights into your business operations.

Conclusion

Only ACRA-registered public accountants can perform statutory audits in Singapore, and selecting the right one is critical for compliance, credibility, and business growth. Engaging the right audit partner ensures that your financial statements stand up to scrutiny and instil confidence in investors, regulators, and stakeholders.

Call to Action:
If your business requires a statutory audit or you want to ensure you’re working with qualified professionals, contact Koh & Lim Audit PAC today.
📞 +65 98638665
📧 Tommyksh@kohlimaudit.sg
🌐 https://kohlimaudit.sg/

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