An Essential Guide to Singapore Auditing

Singapore’s strict regulations actively develop and maintain a highly respected auditing scene. This ensures the integrity and credibility of the country’s business and financial institutions. The regulatory bodies of Singapore, mainly ACRA, ISCA and MAS collaborate to ensure that auditors adhere to the highest ethical and professional standards. These standards include values of transparency and integrity. Singapore’s well-established legal and regulatory framework actively fosters a well-respected auditing industry, both domestically and internationally. Therefore, auditors must always upkeep themselves and follow the ever-evolving best auditing practices in Singapore.

From the different benefits your company gets from an audit to the audit services offered, here’s everything you need to know about audits in Singapore.

Benefits Of Good Business Auditing Practices In Singapore

Company audits in Singapore offer several benefits for businesses, investors, and other stakeholders. Some of the key advantages are listed below.

Enhances Credibility And Trust

By providing independent assurance of the accuracy and reliability of a company’s financial statements, auditing helps to build credibility and trust with investors, creditors, and other stakeholders. This can lead to increased confidence in the company’s financial position and ultimately support its long-term success.

Improves Financial Management

Auditing provides valuable insights into a company’s financial health, which can help your managers make better decisions and improve financial management practices. This in turn leads to improved efficiency, better use of resources, and ultimately better financial results.

Ensures Compliance With Regulations

Auditing helps to ensure that a company complies with regulatory requirements and industry standards. By ensuring compliance with regulations, your company will be able to avoid legal and financial penalties and operate in a responsible and ethical manner.

Helps Detect And Prevent Fraud

Auditors are trained to identify and investigate fraud and other irregularities, which will definitely help you avoid any fraudulent activities in a company. This is especially important for maintaining the integrity of financial reporting and ensuring that stakeholders have accurate information to make informed decisions.

Regulatory Auditing Authorities in Singapore

The accounting and auditing industry here is overseen by several regulatory bodies, including the Accounting and Corporate Regulatory Authority (ACRA), the Institute of Singapore Chartered Accountants (ISCA), and the Monetary Authority of Singapore (MAS).

Accounting and Corporate Regulatory Authority (ACRA)

ACRA acts as the foundation for Singapore’s auditing scene. This government body wields significant power, responsible for:

1. Setting auditing standards: ACRA establishes the benchmarks public accountants must follow to ensure consistent and reliable audits.
2. Overseeing public accountants: ACRA meticulously monitors the work of public accountants, maintaining a high bar for professionalism and ethical conduct.

Institute of Singapore Chartered Accountants (ISCA)

While ACRA sets the standards, ISCA fosters a culture of excellence within the profession. This professional organization specifically focuses on:

1. Developing best practices: ISCA actively promotes and develops best practices for auditing, ensuring its chartered accountant members deliver the highest quality audits.
2. Providing guidance: ISCA offers valuable guidance and support to its members, promoting continuous professional development within the auditing community.

Monetary Authority of Singapore (MAS)

MAS complements the work of ACRA and ISCA by focusing on a specific sector: financial institutions. Their role ensures:

1. Compliance with auditing requirements: MAS holds financial institutions accountable for adhering to the established auditing standards.
2. Transparency in financial reporting: MAS actively promotes transparency in financial reporting within the financial sector, fostering trust and confidence in the market.

Audit Services Singapore

Different audit services in Singapore are provided by audit firms depending on the type of client and the nature of the engagement. These are the common audit services.

Statutory Audit

This is a mandatory audit for companies in Singapore, requiring them to have their financial statements audited by a licensed audit firm. This provides an independent opinion on the accuracy and fairness of a company’s financial statements.

Internal Audit

An internal audit is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. It helps an organisation achieve its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

Special Purpose Audit

Special purpose audits go beyond the standard financial audit. They drill down on specific objectives like compliance, due diligence, uncovering financial discrepancies (forensic audits), or verifying grant eligibility. This tailored approach ensures the audit precisely meets the client’s unique needs.

Review Of Financial Statements

This service involves a review of a company’s financial statements to ensure that they are in compliance with accounting standards and that there are no material misstatements.

Agreed-Upon Procedures

Agreed-upon procedures are customised audit procedures that are agreed upon between the client and the auditor. The objective of an agreed-upon procedure engagement is to carry out specific procedures on a subject matter and report the factual findings.

Sustainability Reporting Assurance

Sustainability reporting assurance is a service provided to clients who prepare sustainability reports, where the auditor provides assurance on the information disclosed in the report.

Special Purpose Audit/Certification For Subsidy Claim Audit

Independent auditors perform Special Purpose Audits or Certification for Subsidy Claim Audits. These audits verify the accuracy and validity of subsidy claims submitted by organizations or individuals. Government agencies often require them for specific purposes like research & development, training, or business development. The audit ensures the legitimacy of claims and confirms funds are used appropriately.

During a subsidy claim audit, auditors meticulously examine an organization or individual’s financial records and supporting documents for verification. Beyond verifying claims, auditors probe internal controls to ensure funds comply with guidelines.

A prime example of a special purpose audit is the Market Readiness Assistance (MRA) grant, where grantees undergo audits to verify project completion before reimbursement.

If you would like to know more about the best business auditing practices and incorporation services in Singapore, our team at Paul Hype Page can guide you through your inquiries.