The Companies Act penalties for non compliance is heavy and can go upto $10,000 or imprisonment not exceeding 2 years!
Compilation Report Service | Unaudited Financial Statements
The Companies Act has provisions for certain types of companies to be exempted from audit. These companies are
- – dormant company, defined as a company that has ceased trading and does not have any accounting transactions.
- – small company, defined as a company where for the immediate past two consecutive financial years, the company meets at least 2 of 3 following criteria:
(i) its total annual revenue in the financial year does not exceed S$10 million;
(ii) its total assets in the financial year does not exceed S$10 million
(iii) its total number of employees does not exceed 50 full time employees at the end of the financial year;
Further to the above, no minority shareholders representing more than 5% of the company’s total shares have requested that the accounts to be audited.
If your company fits the requirements above, then you need not have to be audited and therefore you can prepare the compilation report aka unaudited financial statements or Directors reports.
However, Companies and directors still have a legal responsibility to ensure that proper accounting and other records are kept to enable the unaudited financial statements/ compilation report to show a true and fair view to be prepared in accordance with the Singapore Financial Reporting Standards. The preparer of such compilation report has to have the professional competence and due care in preparing the compilation of financial statements report.
What is a Compilation Report (Compilation of financial statements)?
A compilation of financial statements refers to a company's full set of financial statements including the explanatory notes that have been prepared after the completion of a financial year. Usually this is done by an outsource accountant where the outsource accounting service provider converts the client's data into compilation of financial statements to comply with the Singapore FRS without providing any assurances or auditing services.
The Compilation Report or unaudited Financial Statements consists of:- Directors’ Report
- Statement of Directors
- Statement of Comprehensive Income
- Statement of Financial Position
- Statement of Changes in Equity
- Accounting Policies
- Notes to Financial Statements
- Detailed Income Statement
As there is no auditing done, the service fees to prepare the Compilation Report or Compilation of financial statements is much lower than an audit engagement.If you are an exempt private company and you are required to prepare the compilation report, our Compilation Report service starts from only $350!