The companies comply with certain provisions of the Singapore Companies Act, are exempt from an audit of their accounts.

The following companies, which comply with certain provisions of the Singapore Companies Act, are exempt from an audit of their accounts. However, they are still required to prepare financial statements (and consolidated financial statements if applicable) that comply with the Companies Act and financial reporting standards. In order to reduce the institutional burden of small companies and gradually establish a risk-based mechanism, the new amendment introduced the concept of small companies, to exempt such small companies from the audit requirements.

The new audit exemption system is applicable to Singapore companies established on or after July 1, 2015 or companies whose financial year begins on or after July 1, 2015. Under the new regulations, companies meeting the following conditions are defined as "small companies" and exempted from auditing:

1.Was a private company during the financial year, and

2. In the immediate past two consecutive financial years, at least 2 of the following 3 conditions must have been met:

a. The total annual revenue is less than SGD 10 million

b. Total assets amounting to less than SGD 10 million

c. Has fewer than 50 employees

For a company that is part of a group:

a. the company must qualify as a "small company"

b. the entire group  must be a "small group" (any 2 of the 3 conditions defining a "small company" applies to the definition of a “small group” in meeting the criteria for audit exemption)