We prepare Unaudited financial reports for Limited Liability Companies which are defined small as per the Companies Act.
A Limited Liability Company is considered to be small if it fulfils two of the following three conditions:
- Total annual revenue of the company for the financial year must not exceed SGD 10 million
- Total assets of the company for the financial year must not exceed SGD 10 million
- The number of full-time employees at the end of the financial year must not exceed 50
There is a prevailing confusion to label bookkeeping activities and accounting activities interchangeably with each other. This is not necessarily wrong. However, it is important to know the distinction between the two.
Bookkeeping activities are only concerned with recording financial transactions as per assets, liabilities, equity, income, and expenses.
Accounting activities include recording, measuring, classifying, verifying, summarizing, interpreting, and communicating financial information. Accounting reveals profit or loss for a given period, and the value of a firm’s assets, liabilities, and shareholders’ equity. The primary objective of accounting is to provide information for decision-making.
For an unincorporated business structure like a sole proprietor or partnership, we can use the financial reports generated from the accounting software. For incorporated business structures like private limited companies, there are additional requirements.
If any private limited company fulfils two of the three criteria listed below, it must prepare an unaudited financial report:
- The total annual revenue of the company for the financial year must not exceed SGD 10 million;
- Total assets of the company for the financial year must not exceed SGD 10 million;
- The number of full-time employees at the end of the financial year must not exceed 50.
If the private limited company does not satisfy two of the three criteria listed above, it must prepare an audited financial report.
The unaudited financial report must be prepared by a qualified chartered accountant registered with ISCA. For the audited financial report, it must be prepared by a public accountant registered with ACRA.
The set of financial statements for both unaudited and audited financial reports includes the following:
- a statement of financial position as of the end of the period;
- a statement of profit or loss and other comprehensive income for the period;
- a statement of changes in equity for the period;
- a statement of cash flows for the period;
- notes, comprising material accounting policy information and other explanatory information.
For audited financial reports, in addition to the above, the auditor must include an opinion of the overall presentation and compliance of the financial report to relevant standards.
Upon completion of either an audited or unaudited report, these reports will be used to comply with ACRA and IRAS requirements.
The rates for corporate accounting services are very competitive and no two companies can have the same rates as the underlying business operations may differ.
If you are looking for cheap accounting services in Singapore there is no shortage of service providers. They can include small and medium public accounting firms, freelance service providers, and business consultancy firms. It is not always a good idea to outsource work solely on cost alone. Clients should be prepared to pay a small premium for a reasonable quality of work to address compliance requirements.
The engagement of accounting services can be negotiated on a basis which is comfortable both for the client and the service provider.
Typically, it is quite common to have the following services included in a service-level agreement:
- Monthly bookkeeping data entries (optional);
- Monthly accounting services (optional);
- Yearly preparation of unaudited or audited reports;
- Yearly preparation of tax computation (optional);
- Any other service requirements (optional).