What Is the Responsibility of a Singapore Audit Services Company?

An audit services company in Singapore plays a vital role in ensuring the financial integrity, transparency, and regulatory compliance of businesses across different sectors. In a jurisdiction like Singapore — known for its strong governance and robust regulatory framework — the responsibilities of an audit firm go beyond just reviewing numbers. These responsibilities help businesses remain accountable, avoid legal pitfalls, and build long-term trust with stakeholders.

This article outlines the core and extended responsibilities of a Singapore audit services company and explains how they add value to businesses of all sizes.

1. Ensuring Statutory Compliance

One of the primary responsibilities of a Singapore audit firm is to ensure that a company complies with statutory requirements laid out by the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS).

Key Compliance Responsibilities:

• Audit of Financial Statements: The audit firm reviews a company’s financial statements to ensure they comply with the Singapore Financial Reporting Standards (SFRS).

• Annual Statutory Audit: For companies that are not exempt under the Small Company Criteria, it is compulsory to undergo a statutory audit.

• Tax Filing Support: Auditors ensure that the numbers in financial statements align with tax computations for IRAS filings.

By fulfilling this responsibility, audit firms ensure their clients avoid penalties, late filings, or regulatory breaches.

2. Independent Financial Verification

An audit services company serves as an independent third party that examines and verifies a company’s financial information. The goal is to ensure the accounts present a true and fair view of the financial position of the business.

Responsibilities include:

• Reviewing balance sheets, income statements, cash flow statements, and equity statements

• Verifying the accuracy of journal entries and accounting records

• Matching supporting documents (like invoices and receipts) to reported figures

• Confirming the existence and valuation of assets and liabilities

This independence is crucial for building trust with stakeholders such as investors, banks, suppliers, and regulators.

3. Risk Assessment and Internal Controls Review

Auditors don’t just check if the numbers add up — they also evaluate whether the internal control systems of the company are strong enough to prevent errors or fraud.

Internal Control Responsibilities:

• Identify weaknesses in processes (e.g., cash handling, procurement, inventory control)

• Recommend improvements to mitigate risks

• Review segregation of duties to prevent manipulation or theft

• Assess compliance with internal policies and procedures

By identifying gaps in internal controls, audit firms help reduce operational risks and financial losses.

4. Detection of Fraud and Irregularities

While detecting fraud is not the primary objective of a statutory audit, it is often a byproduct of thorough auditing. Audit firms have a responsibility to report material misstatements, whether due to error or fraud.

Responsibilities in Fraud Detection:

• Flagging suspicious or inconsistent financial data

• Investigating abnormal transactions

• Tracing unexplained cash movements

• Reporting any potential fraud to management or board of directors

A reputable audit services firm acts as a safeguard against financial misreporting or dishonest practices within the organization.

5. Supporting Stakeholder Confidence

By validating a company’s financial statements, an audit firm helps to strengthen stakeholder confidence. This includes:

• Shareholders: who need assurance that management is acting in their best interest

• Lenders and financial institutions: who require audited accounts for credit assessment

• Potential investors or acquirers: who rely on audited figures for due diligence

• Government agencies and regulators: who want to ensure lawful and transparent operations

An audit firm’s responsibility extends to helping these stakeholders make informed decisions based on verified financial data.

6. Providing Management Insights and Recommendations

Good audit firms in Singapore go beyond compliance to deliver value-added advisory insights. During the audit process, they often identify areas where the business can operate more efficiently.

Advisory Responsibilities:

• Suggesting improvements to accounting systems

• Identifying cost control opportunities

• Highlighting tax-saving strategies (in collaboration with tax advisors)

• Benchmarking financial performance against industry norms

While they must remain independent and objective, audit firms can still offer strategic advice that helps a business grow sustainably.

7. Staying Up-to-Date with Regulatory Changes

Regulations and accounting standards in Singapore evolve over time. It is the responsibility of an audit firm to stay current with changes in:

• Singapore Financial Reporting Standards (SFRS)

• Singapore Companies Act

• IRAS tax regulations

• Industry-specific audit requirements (e.g., charities, MCSTs, construction)

Audit professionals continuously undergo training and professional development to ensure that audits are conducted according to the latest legal and ethical standards.

8. Preparing Audit Reports and Communication with Stakeholders

At the conclusion of each audit, the audit services company issues an audit report, which forms a key component of a company’s annual financial statements.

Responsibilities include:

• Issuing an audit opinion (Unqualified, Qualified, Adverse, or Disclaimer)

• Preparing a management letter to highlight findings and recommendations

• Communicating audit results to company directors and management

• Attending Annual General Meetings (AGMs) when necessary

Clear and transparent reporting allows all stakeholders to understand the financial health and areas for improvement within the company.

9. Supporting Business Expansion or Transaction Readiness

Audit firms play a crucial role when a business is preparing for major events such as:

• Raising capital

• Mergers and acquisitions (M&A)

• Initial Public Offerings (IPO)

Their responsibility is to ensure that financial statements are clean, accurate, and compliant, enabling smooth due diligence and investor readiness. A good audit firm helps businesses present their financials in the best light while maintaining transparency and integrity.

10. Maintaining Ethical Standards and Independence

Finally, one of the most critical responsibilities of a Singapore audit firm is to uphold professional ethics and remain independent. This includes:

• Avoiding conflicts of interest

• Maintaining objectivity and impartiality

• Respecting confidentiality

• Complying with the Code of Professional Conduct and Ethics

This ethical foundation is what makes audit firms trustworthy. Their independence allows them to report issues without fear or favour, ensuring that the public and stakeholders can rely on their findings.

Conclusion

In Singapore’s highly regulated and trust-based business environment, audit services companies shoulder a broad range of responsibilities. From verifying financial records and ensuring legal compliance to enhancing internal controls and offering strategic advice, these firms play an integral role in the sustainability and success of businesses.

Choosing a good audit firm isn’t just about ticking a box for regulatory purposes — it’s about securing a long-term partner who ensures your financial integrity, supports business goals, and builds trust with stakeholders. The best audit firms combine technical expertise, ethical conduct, industry experience, and a commitment to continuous improvement — ensuring your business remains compliant, credible, and future-ready.