Compilation of Financial Statements
Audit exemption for small companies [New section 205C and Thirteenth Schedule]
|Current Provision/Requirement||Changes and Background|
An exempt private company with annual revenue of $5m or less for the financial year is exempt from auditing its financial statements.
An exempt private company is a company which has not more than 20 members and in which no corporation holds any beneficial interest in its shares.
A new small company concept will be introduced for exemption from statutory audit.
A company qualifies as a small company if:
(a) it is a private company in the financial year in question; and
(i) total annual revenue ≤ $10m;
For a company which is part of a group:
(a) the company must qualify as a small company; and
For a group to be a small group, it must meet at least 2 of the 3 quantitative criteria on a consolidated basis for the immediate past two consecutive financial years.
Where a company has qualified as a small company, it continues to be a small company for subsequent financial years until it is disqualified. A small company is disqualified if:
(a) it ceases to be a private company at any time during a financial year; or
Where a group has qualified as a small group, it continues to be a small group for subsequent financial years until it does not meet at least 2 of the 3 the quantitative criteria for the immediate past two consecutive financial years.
Existing safeguards will remain, such as requiring all companies to keep proper accounting records, and empowering shareholders with at least 5% voting rights to require a company to prepare audited accounts.
The preparation of unaudited financial statements/compilation includes the following:
- Directors’ Report
- Statement by Directors
- Statement of Financial Position
- Statement of Comprehensive Income
- Statement of Changes in Equity
- Statement of Cash Flows
- Notes to the Financial Statements
- Detailed Income Statement
This page was last updated on 24th August, 2015.