What Can You Do to Prepare for a Singapore Audit?

In Singapore, undergoing an audit—whether mandatory or voluntary—is a crucial part of maintaining financial transparency, ensuring regulatory compliance, and building stakeholder trust. However, audits can be stressful and time-consuming if not properly planned. The key to a smooth, efficient, and stress-free audit is adequate preparation.

Whether you’re a first-timer or a seasoned business owner, this guide will help you understand what you can do to prepare for a Singapore audit, including best practices, compliance tips, and practical checklists.

1. Understand Whether an Audit Is Required

Before preparing, ensure you know why you are being audited and whether it is mandatory.

In Singapore, an audit is required if:

Your company does not qualify as a small company and meets at least 2 out of 3 criteria:

• Annual revenue > S$10 million

• Total assets > S$10 million

• More than 50 employees

If your company does not qualify for audit exemption, you are legally required to appoint a registered public accountant to perform an annual statutory audit.

Even if your business qualifies as a “small company,” you may still opt for a voluntary audit due to investor demands, financing requirements, or governance needs.

Knowing whether the audit is statutory or voluntary will help you plan its scope, timeline, and cost accordingly.

2. Choose the Right Audit Firm

Once you know an audit is required, the next step is to engage a licensed audit firm that is registered with the Accounting and Corporate Regulatory Authority (ACRA).

Tips for choosing a firm:

• Ensure they are familiar with Singapore Financial Reporting Standards (SFRS)

• Ask about experience in your industry (e.g., retail, F&B, construction, tech)

• Compare fees and engagement timelines

• Check responsiveness and communication style

Engage your auditors early—at least 2 to 3 months before your year-end—especially during Singapore’s peak audit season (January to April).

3. Close Your Books Properly

A clean set of financials is the foundation of a smooth audit. Ensure your accounting books are complete, accurate, and closed before handing them to auditors.

Financial closing tasks include:

• Finalizing the trial balance

• Reconciling bank statements

• Completing accounts receivable and payable ledgers

• Updating fixed asset registers

• Posting accruals and prepayments

• Verifying inventory counts (if applicable)

Be thorough—unreconciled balances and inconsistent figures will delay the audit and result in additional queries from auditors.

4. Prepare the PBC (Prepared By Client) List

Auditors will provide a PBC list—a checklist of documents they need to perform their audit procedures. This typically includes:

Core financial documents:

• Trial balance

• General ledger

• Bank statements and reconciliations

• Fixed asset schedule and depreciation

• Sales and purchase listings

• Inventory reports

• Payroll records

Legal and compliance documents:

• Corporate secretarial records

• Board resolutions and AGM minutes

• Loan agreements and lease contracts

• Tax filings (IRAS correspondence, Form C-S/C)

• GST filings (if applicable)

Supporting schedules:

• Accrual and provision breakdowns

• Aging reports for debtors and creditors

• Intercompany transaction reconciliations

• Foreign currency adjustments

Tip:

Create a centralised, digital folder structure (e.g., on Google Drive or Dropbox) for these items to facilitate sharing and version control.

5. Assign an Internal Audit Coordinator

Appoint a member of your finance team or management as the main point of contact for the audit. This person should:

• Liaise with the auditors

• Coordinate internal document submissions

• Track outstanding audit queries

• Schedule meetings between auditors and departments

This centralised communication channel improves efficiency and helps avoid miscommunication or duplicated efforts.

6. Review Prior-Year Audit Findings

If this is not your first audit, review the previous year’s audit report and management letter.

Key areas to examine:

• Were there any audit adjustments last year?

• Were there any control weaknesses noted?

• Have those issues been addressed or improved?

Taking corrective actions on prior-year issues demonstrates good governance and reduces the likelihood of repeated findings, which can trigger additional scrutiny.

7. Ensure Proper Documentation

Auditors don’t just look at your numbers—they look for evidence to back those numbers.

Ensure:

• Invoices, receipts, and supporting documents are properly filed

• Contracts and agreements are signed and accessible

• Payment vouchers and approval workflows are documented

• Staff expense claims are backed by receipts and policies

• All revenue recognition follows SFRS guidelines

Proper documentation reduces back-and-forth requests and enhances the credibility of your financial statements.

8. Test Internal Controls

Strong internal controls reduce risk and increase auditor confidence.

Before the audit begins:

• Review authorisation limits and approval flows

• Test segregation of duties in financial transactions

• Conduct basic internal reviews (e.g., stock take, petty cash checks)

• Check if finance policies (procurement, payroll, expense) are up to date

Auditors assess whether your internal controls are reliable. A well-controlled business environment may lead to a more efficient and less intrusive audit process.

9. Address Potential Audit Red Flags

Certain items tend to trigger extra attention from auditors. Proactively identify and prepare explanations for:

• Unusual or significant year-end transactions

• Related party transactions (e.g., directors’ loans)

• Long-outstanding receivables or payables

• Inventory write-downs or asset impairments

• Deferred revenue or contract liabilities

• Significant variances from prior year

If applicable, prepare memos, supporting evidence, and management’s rationale for these items ahead of time.

10. Communicate Audit Timeline with Stakeholders

Inform internal teams and key stakeholders about:

• The audit start and end dates

• Any expected site visits or interviews

• Required availability of staff for auditor meetings

Set clear internal deadlines for departments to submit their documents and answer auditor queries. Delays from internal teams are one of the most common causes of audit overruns.

11. Plan for Audit Completion and Sign-Off

The audit ends with the issuance of the audited financial statements, audit report, and the management representation letter. Before this happens:

• Review the draft financial statements

• Ensure all adjustments and disclosures are accurate

• Get board approval for the audited accounts

• Submit filings to ACRA and IRAS as required

Factor in regulatory deadlines:

• ACRA filing: within 7 months of financial year-end

• Corporate tax filing: usually by 30 November (Form C-S/C)

12. Learn and Improve

Once the audit is complete:

• Review the audit findings and address any control weaknesses

• Conduct a post-audit review with your team

• Document lessons learned and improve processes for the next audit

The audit should be a learning experience, not just a compliance exercise.

Conclusion

Preparing for a Singapore audit is not just about handing over financial statements—it’s about demonstrating that your business is well-managed, compliant, and ready for growth.

By taking the time to:

• Close your books properly

• Organise your documentation

• Coordinate with your auditors

• Strengthen your internal controls

…you not only ensure a smooth audit process, but also improve your company’s overall financial health and reputation.

A well-prepared audit is a strategic advantage—and in Singapore’s competitive, transparent business environment, it’s an investment worth making.

Koh Lim Audit https://kohlimaudit.sg/