Does the term audit scare you?
Well, it certainly does scare everyone running a business but if you are running a fair business you don’t need to worry about it.
So, if you want to know what an audit is and how hiring an audit firm in Singapore can be beneficial for your business, here is everything you might want to know.
What is an audit?
So, here comes the big question!! What is an audit?
An audit is a process in which an external or internal team of auditors thoroughly evaluates your financial statements, journal entries, and ledgers. It helps to determine the health of your business whether it is on profit or going in loss. Similarly, it also helps to identify any mistakes in the accounting process and avoid them in the future.
The primary purpose of an audit is to make sure that the company or organization is following all rules and is fair in its transactions.
Does your company need audit services Singapore?
According to The Singapore Companies Act, all companies and businesses must get their financial statements and accounts audited by an audit firm in Singapore at least once a year. However, there is an exemption for SMALL COMPANIES.
What are small companies?
According to the 2014 amendment to The Singapore Companies Act, a company must fulfill at least two of the following conditions to qualify for a small company audit exemption. Here are the conditions:
- The total revenue of the company does not exceed $10 million.
- The total assets of a company do not exceed $10 million at the end of a financial year.
- The number of full-time employees of a company is not more than 50 at the end of the financial year.
If you are a group company and fulfill the above criteria of a small company, you can avail of this audit exemption clause.
Types of audit services Singapore
There are three main types of audits:
1. Internal audit
The internal audit is performed by in-house auditors and accountants. An internal audit aims to make sure that the company’s accounts are clear and the company is following all rules and regulations. Depending on your needs, you can opt for internal audits to be performed monthly, quarterly, bi-annually, or annually.
2. External audit
The purpose and procedure of an external audit are the same as an internal audit. It assures the shareholders and investors that the company’s financial statements are fair and free from any corruption.
However, you are legally required to hire an audit firm Singapore to perform the audit. The Singapore law requires you to have an external audit once a year by an authorized audit firm Singapore.
3. Tax audit
Just like internal and external audits, a tax audit also verifies the information in your financial statements. Tax audit aims to verify whether the income reflected in tax returns is accurate or not, and whether or not you qualify for the tax exemptions you have claimed for.
Why audit services are important?
Apart from being a requirement from The Singapore Companies Act, audits also provide you with some benefits.
1. You will have accurate information
Hiring audit services will make sure that you have an unbiased audit report at your hand. Internal auditors might get influenced or look over small mistakes that can harm you in the future. Moreover, hiring an audit firm Singapore will also make sure that you have a clear picture of your business which areas need improvement, and which areas are doing well.
2. Your investors will be satisfied
If you are a family-run business and your investors and shareholders are not involved in day-to-day business matters, they will need a clear picture of your finances to keep on trusting you. An audit will provide them with that clear picture to keep on trusting your business decisions.
3. Audits services have expert auditors
An audit firm is fully equipped with the latest auditing software and expert auditors. Their expertise will save your time and energy spent in finding the right internal auditors and software. Moreover, external auditors will also guide you about any flaws in the system and how to resolve them.
4. Better decision making
Good financial decisions are the key to a thriving business. And for that, you need to have accurate knowledge of your accounts and financial statements. Audit services Singapore will provide you with the correct information and help you identify problems areas and how to overcome the problems.
We hope that you now know what is audit and why audit services Singapore is important for your business. So, if you are looking for an audit firm Singapore, WZ WU & Partners are here to help you. We are a small and reputed accountancy firm in Singapore offering complete accountancy services to corporations and individuals in Singapore. Our services include audit services and assurance, corporate secretarial services, income tax filing services, SME accounting and bookkeeping services, nominee director services, and business processing services. Feel free to contact us for more information.
