System of accounting audit
The accounting system in Singapore is based on English Act, so generally all of the corporations including foreign subsidiaries must receive the accounting audit from accounting auditor. According to Companies Act, it is forced to receive the audit by compulsory.
Based on Companies Act 207, it is necessary to appoint a certified public accountant to be the accounting auditor with three months of setup of companies. And it is required to receive the audit one time for a year. In other words, all of the corporations are forced to receive accounting audit by certified public accountant.
However, there are some exceptions that can be excluded for audit.
The private corporations, which the shareholders are below 20 and the yearly sales are under 5,000,000 dollars or dormant corporations, can be excluded for audit.
The contents of accounting audit
- Types of audit report
⑴ Unqualified opinion
Result of audit: Auditor ensures financial statements are made adequately and reasonably.
⑵ Qualified opinion
Result of audit: Auditor ensures financial statements are made almost reasonably. However, though there is no serious problem, some not proper parts exist.
⑶ Adverse opinion
Result of audit: the financial statements are not made reasonably.
Result of audit: the important procedure cannot be conducted, so that the opinions of audit cannot express.
In general, the listed corporations must obtain the opinion of unqualified opinion.
In the year of 2010, Corporate Governance Council is established and the governance regulations are reviewed again. Generally, listed companies are required to establish Audit Committee based on Companies Act 201B.
According to Companies Act, The Audit Committee should keep independence and it should corporate with accounting auditor to consider the audit plan and internal audit procedure. In the new governance regulations, the observation audit is strengthened and the necessity of cost performance audit, internal governance is also included.
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