PART 6 | FINANCIAL STATEMENTS AND AUDIT |
[36/2014] | Division 1 — Financial statements |
[36/2014] | Accounting records and systems of control |
| 199.—(1) Every company must cause to be kept such accounting and other records as will sufficiently explain the transactions and financial position of the company and enable true and fair financial statements and any documents required to be attached thereto to be prepared from time to time, and must cause those records to be kept in such manner as to enable them to be conveniently and properly audited. [36/2014] | (2) The company must retain the records referred to in subsection (1) for a period of not less than 5 years from the end of the financial year in which the transactions or operations to which those records relate are completed. [2/2007] |
(2A) Every public company and every subsidiary company of a public company must devise and maintain a system of internal accounting controls sufficient to provide a reasonable assurance that —| (a) | assets are safeguarded against loss from unauthorised use or disposition; and | | (b) | transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets. [36/2014] |
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| (3) The records referred to in subsection (1) must be kept at the registered office of the company or at such other place as the directors think fit and must at all times be open to inspection by the directors. |
| (4) If accounting and other records are kept by the company at a place outside Singapore there must be sent to and kept at a place in Singapore and be at all times open to inspection by the directors such statements and returns with respect to the business dealt with in the records so kept as will enable to be prepared true and fair financial statements and any documents required to be attached thereto. [36/2014] |
| (5) The Court may in any particular case order that the accounting and other records of a company be open to inspection by a public accountant acting for a director, but only upon an undertaking in writing given to the Court that information acquired by the public accountant during his or her inspection must not be disclosed by the public accountant except to that director. |
| (6) If default is made in complying with this section, the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months and also to a default penalty. [36/2014] |
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| 200. [Repealed by Act 36 of 2014] |
| 200A. [Repealed by Act 39 of 2007] |
| Financial statements and consolidated financial statements |
| 201.—(1) The directors of every company must lay before the company at its annual general meeting the financial statements for the financial year in respect of which the annual general meeting is held. [15/2017] | (2) Subject to subsections (12) to (15), the financial statements mentioned in subsection (1) must comply with the requirements of the Accounting Standards and give a true and fair view of the financial position and performance of the company. [36/2014] |
| (3) [Deleted by Act 15 of 2017] |
| (4) [Deleted by Act 15 of 2017] |
(5) Subject to subsections (12) to (15), the directors of a company that is a parent company at the end of its financial year need not comply with subsection (1) but must cause to be made out and laid before the company at its annual general meeting —| (a) | consolidated financial statements dealing with the financial position and performance of the group for the financial year in respect of which the annual general meeting is held; and | | (b) | a balance sheet dealing with the state of affairs of the parent company at the end of its financial year, |
| each of which complies with the requirements of the Accounting Standards and gives a true and fair view of the matters referred to in paragraph (a) or (b) (as the case may be) so far as it concerns members of the parent company. |
[36/2014; 15/2017] |
| (6) [Deleted by Act 15 of 2017] |
(7) The directors must (before the financial statements mentioned in subsection (1) and the balance sheet mentioned in subsection (5)(b) are made out) take reasonable steps —| (a) | to ascertain what action has been taken in relation to the writing off of bad debts and the making of provisions for doubtful debts and to cause all known bad debts to be written off and adequate provision to be made for doubtful debts; | | (b) | to ascertain whether any current assets (other than current assets to which paragraph (a) applies) are unlikely to realise in the ordinary course of business their value as shown in the accounting records of the company and, if so, to cause —| (i) | those assets to be written down to an amount which they might be expected so to realise; or | | (ii) | adequate provision to be made for the difference between the amount of the value as so shown and the amount that they might be expected so to realise; and |
| | (c) | to ascertain whether any non‑current asset is shown in the books of the company at an amount which, having regard to its value to the company as a going concern, exceeds the amount which would be recoverable over its useful life or on its disposal and (unless adequate provision for writing down that asset is made) to cause to be included in the financial statements such information and explanations as will prevent the financial statements from being misleading by reason of the overstatement of the amount of that asset. [36/2014] |
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| (8) The financial statements must be duly audited before they are laid before the company at its annual general meeting as required by this section, and the auditor’s report required by section 207 must be attached to or endorsed upon those financial statements. [36/2014] |
(9) The directors of the company must —| (a) | take reasonable steps to ensure that the financial statements are audited as required by this Part not less than 14 days before the annual general meeting of the company, unless all the persons entitled to receive notice of general meetings of the company agree that the financial statements may be audited as required by this Part less than 14 days before the annual general meeting of the company; and | | (b) | cause to be attached to those financial statements the auditor’s report that is furnished to the directors under section 207(1A). [36/2014] |
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(10) In subsections (8) and (9), “financial statements”, in relation to a company, means —| (a) | in the case where the company is not a parent company — the financial statements required to be laid before the company at its annual general meeting under subsection (1); or | | (b) | in the case where the company is a parent company — the consolidated financial statements of the group and the balance sheet of the parent company required to be laid before the company at its annual general meeting under subsection (5). [36/2014] |
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| (11) Where at the end of a financial year a company is the subsidiary company of another corporation, the directors of the company must state in, or in a note as a statement annexed to, the financial statements laid before the company at its annual general meeting the name of the corporation which is its ultimate parent corporation. [36/2014] |
| (12) The financial statements or consolidated financial statements of a company need not comply with any requirement of the Accounting Standards for the purposes of subsection (1) or (5), if the company has obtained the approval of the Registrar to such non‑compliance. [36/2014] |
| (13) Where financial statements or consolidated financial statements prepared in accordance with any requirement of the Accounting Standards for the purposes of subsection (1) or (5), would not give a true and fair view of any matter required by this section to be dealt with in the financial statements or consolidated financial statements, the financial statements or consolidated financial statements need not comply with that requirement to the extent that this is necessary for them to give a true and fair view of the matter. [36/2014] |
(14) In the event of any non‑compliance with a requirement of the Accounting Standards mentioned in subsection (13), there must be included in the financial statements or consolidated financial statements, as the case may be —| (a) | a statement by the auditor of the company that the auditor agrees that such non‑compliance is necessary for the financial statements or consolidated financial statements (as the case may be) to give a true and fair view of the matter concerned; | | (b) | particulars of the departure, the reason therefor and its effect, if any; and | | (c) | such further information and explanations as will give a true and fair view of that matter. [36/2014] |
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| (15) The Minister may, by order in the Gazette, in respect of companies of a specified class or description, substitute other accounting standards for the Accounting Standards, and the provisions of this section and sections 207 and 209A apply accordingly in respect of such companies. [36/2014] |
| (16) The financial statements laid before a company at its general meeting (including any consolidated financial statements annexed to the balance sheet of a parent company) must be accompanied, before the auditor reports on the financial statements under this Part, by a statement signed on behalf of the directors by 2 directors of the company containing the information set out in the Twelfth Schedule. [36/2014] |
(17) Any document (other than any financial statements or a balance sheet prepared in accordance with this Act) or advertisement published, issued or circulated by or on behalf of a company (other than a banking corporation) must not contain any direct or indirect representation that the company has any reserve unless the representation is accompanied —| (a) | if the reserve is invested outside the business of the company — by a statement showing the manner in which and the security upon which it is invested; or | | (b) | if the reserve is being used in the business of the company — by a statement to the effect that the reserve is being so used. [36/2014] |
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| (18) The provisions of this Act relating to the form and content of the statement of directors and the annual financial statements apply to a banking corporation with such modifications and exceptions as are determined either generally or in any particular case by the Monetary Authority of Singapore established under section 3 of the Monetary Authority of Singapore Act 1970. [36/2014] |
| (19) In respect of a company that is registered as a charity or approved as an institution of a public character under the Charities Act 1994, the requirements of this section as to the form and content of a company’s financial statements or consolidated financial statements being in compliance with the Accounting Standards apply subject to any modification prescribed under section 12(1)(f) of that Act in respect of such a company. [36/2014] |
| (20) For the purposes of subsections (1) and (5), a reference to the preceding financial statements includes the profit and loss account, balance sheet and consolidated accounts required to be laid before the company at its annual general meeting under section 201 in force before 1 July 2015. [36/2014] |
| (21) For the purposes of subsections (1) and (5), a reference to the requirement to lay financial statements before a company includes the laying of the profit and loss account, balance sheet and consolidated accounts prepared in accordance with section 201 in force immediately before 1 July 2015, where such profit and loss account, balance sheet and consolidated accounts have been prepared in respect of a financial year which ended before 1 July 2015. [36/2014] |
| (22) Subsection (16) does not apply to any company in respect of any financial year which ended before 1 July 2015; and section 201(5) to (8), (11), (12) and (15) in force immediately before that date continues to apply to such company for that financial year. [36/2014] |
| (23) Without limiting section 197(2), a company referred to in subsection (22) must, when lodging a return with the Registrar under section 197, attach a copy of the report prepared in accordance with section 201(5) in force immediately before 1 July 2015. [36/2014] |
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| Certain dormant companies exempted from duty to prepare financial statements |
| 201A.—(1) Subject to subsection (3), the directors of a dormant relevant company are exempt from the requirements of section 201 for a financial year if the requirements set out in subsection (2) are satisfied. [36/2014] (2) The requirements referred to in subsection (1) are —| (a) | that the relevant company has been dormant —| (i) | from the time of its formation; or | | (ii) | since the end of the previous financial year; |
| | (b) | that the directors of the relevant company have lodged with the Registrar a statement by the directors that —| (i) | the company has been dormant for the period set out in paragraph (a)(i) or (ii), as the case may be; | | (ii) | no notice has been received under subsection (3) in relation to the financial year; and | | (iii) | the accounting and other records required by this Act to be kept by the company have been kept in accordance with section 199; and |
| | (c) | that the statement mentioned in paragraph (b) has been lodged with the Registrar at the same time that the annual return is required to be lodged under section 197(1). [36/2014] |
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| (3) A relevant person may by written notice require the directors of a dormant relevant company to comply with any or all of the requirements of section 201 in respect of a financial year but the written notice must be issued to the directors not less than 3 months before the end of the financial year. [36/2014] |
(4) In subsection (3), “relevant person” means —| (a) | the Registrar; | | (b) | one or more members holding not less than 5% of the total number of issued shares of the company (excluding treasury shares); or | | (c) | not less than 5% of the total number of members of the company (excluding the company itself if it is registered as a member). [36/2014] |
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(5) For the purposes of this section —| (a) | “relevant company” means a company —| (i) | which is not a listed company or a subsidiary company of a listed company; | | (ii) | whose total assets at any time during the financial year in question does not exceed —| (A) | $500,000 in value; or | | (B) | such other amount as may be prescribed in substitution by the Minister; and |
| | (iii) | which, if it is a parent company (which is not itself a subsidiary company of another corporation), belongs to a group the consolidated total assets of which at any time during the financial year in question does not exceed —| (A) | $500,000 in value; or | | (B) | such other amount as may be prescribed in substitution by the Minister; and |
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| | (b) | section 205B(2) and (3) applies in determining whether a relevant company is dormant. [36/2014] |
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| (6) This section does not apply to the directors of any company in respect of a financial year which ended before 3 January 2016 and the directors of such company must prepare the accounts or consolidated accounts for that financial year and lay the accounts or consolidated accounts of the company at its annual general meeting for that financial year, in accordance with Part VI in force immediately before that date. [36/2014] |
| (7) Without limiting section 197(2), a company referred to in subsection (6) must, when lodging a return with the Registrar under section 197, attach a copy of the accounts or consolidated accounts so prepared. [36/2014] |
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| Retention of documents laid before company at annual general meeting |
201AA.—(1) Every company must cause to be kept at the company’s registered office, or such other place as the directors think fit —| (a) | a copy of each of the documents that was laid before the company at its annual general meeting under section 201 for a period of not less than 5 years after the date of the annual general meeting, being a date on or after 3 January 2016; or | | (b) | in respect of any financial year for which the company need not hold an annual general meeting because of section 175A(1) —| (i) | a copy of the financial statements; or | | (ii) | in the case of a parent company, a copy of the consolidated financial statements and balance sheet (including every document required by law to be attached thereto), |
| and a copy of the auditors’ report where such financial statements or consolidated financial statements are duly audited, that were sent to all persons entitled to receive notice of general meetings of the company in accordance with section 203(1) for a period of not less than 5 years after the date on which the documents were sent, being a date on or after 3 January 2016. |
[36/2014; 15/2017] |
| (2) If default is made in complying with subsection (1), the company and every officer of the company who is in default shall each be guilty of an offence and shall each be liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months and also to a default penalty. [36/2014] |
| (3) The Registrar or an authorised officer may at any time require the company to furnish any document kept under subsection (1), and may, without fee or reward, inspect, make copies of or extracts from such document. [36/2014] |
(4) Any person who —| (a) | without lawful excuse, refuses to produce any document required of the person by the Registrar or an authorised officer under subsection (3); or | | (b) | assaults, obstructs, hinders or delays the Registrar or the authorised officer in the course of inspecting or making copies or extracts from the document, |
| shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to both. |
[36/2014] |
| (5) In this section, “authorised officer” means an officer of the Authority authorised by the Registrar for the purposes of this section. [36/2014] |
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201B.—(1) Every listed company must have an audit committee.(2) An audit committee must be appointed by the directors from among their number (pursuant to a resolution of the board of directors) and must be composed of 3 or more members of whom a majority must not be —| (a) | executive directors of the company or any related corporation; | | (b) | a spouse, parent, brother, sister, son or adopted son or daughter or adopted daughter of an executive director of the company or of any related corporation; or | | (c) | any person having a relationship which, in the opinion of the board of directors, would interfere with the exercise of independent judgment in carrying out the functions of an audit committee. |
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| (3) The members of an audit committee must elect a chairperson from among their number who is not an executive director or employee of the company or any related corporation. |
| (4) If a member of an audit committee resigns, dies or for any other reason ceases to be a member with the result that the number of members is reduced below 3, the board of directors must, within 3 months of that event, appoint such number of new members as may be required to make up the minimum number of 3 members. |
(5) The functions of an audit committee are —| (a) | to review —| (i) | with the auditor, the audit plan; | | (ii) | with the auditor, the auditor’s evaluation of the system of internal accounting controls; | | (iii) | with the auditor, the auditor’s audit report; | | (iv) | the assistance given by the company’s officers to the auditor; | | (v) | the scope and results of the internal audit procedures; and | | (vi) | the financial statements of the company and, if it is a parent company, the consolidated financial statements, submitted to it by the company or the parent company, and thereafter to submit them to the directors of the company or parent company; and |
| | (b) | to nominate a person or persons as auditor, despite anything contained in the constitution or under section 205, |
| together with such other functions as may be agreed to by the audit committee and the board of directors. |
[36/2014] |
| (6) The auditor has the right to appear and be heard at any meeting of the audit committee and must appear before the committee when required to do so by the committee. |
| (7) Upon the request of the auditor, the chairperson of the audit committee must convene a meeting of the committee to consider any matters the auditor believes should be brought to the attention of the directors or shareholders. |
| (8) Each audit committee may regulate its own procedure and in particular the calling of meetings, the notice to be given of such meetings, the voting and proceedings thereat, the keeping of minutes and the custody, production and inspection of such minutes. |
| (9) Where the directors of a company or of a parent company are required to make a statement under section 201(16) and the company is a listed company, the directors must describe in the statement the nature and extent of the functions performed by the audit committee pursuant to subsection (5). [36/2014] |
| (10) [Deleted by Act 36 of 2014] |
| (11) Any reference in this section to a director who is not an executive director of a company is a reference to a director who is not an employee of, and does not hold any other office of profit in, the company or in any related corporation of that company in conjunction with his or her office of director and his or her membership of any audit committee, and any reference to an executive director is to be read accordingly. |
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| When directors need not lay financial statements before company |
| 201C.—(1) The directors of a private company need not comply with the requirement in section 201 to lay before the company at its annual general meeting financial statements or consolidated financial statements of the company if the company need not hold an annual general meeting because of section 175A(1). [15/2017] | (2) Where the financial statements or consolidated financial statements are not laid before the company at its annual general meeting under subsection (1), the reference in section 207(1) to financial statements required to be laid before the company in general meeting is to be read as a reference to the documents required to be sent to persons entitled to receive notice of general meetings of the company under section 203(1). [15/2017] |
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| Relief from requirements as to form and content of financial statements and directors’ statement |
| 202.—(1) The directors of a company may apply to the Registrar in writing for an order relieving them from any requirement of this Act relating to the form and content of financial statements or consolidated financial statements (other than a requirement of the Accounting Standards) or to the form and content of the statement required by section 201(16) and the Registrar may make such an order either unconditionally or on condition that the directors comply with such other requirements relating to the form and content of the financial statements or consolidated financial statements or directors’ statement as the Registrar thinks fit to impose. [36/2014] | (2) The Registrar may, where the Registrar considers it appropriate, make an order in respect of a specified class of companies relieving the directors of a company in that class from compliance with any specified requirements of this Act relating to the form and content of financial statements or consolidated financial statements (other than a requirement of the Accounting Standards) or to the form and content of the statement required by section 201(16) and the order may be made either unconditionally or on condition that the directors of the company comply with such other requirements relating to the form and content of financial statements or consolidated financial statements or directors’ statement as the Registrar thinks fit to impose. [36/2014] |
| (3) The Registrar must not make an order under subsection (1) unless he or she is of the opinion that compliance with the requirements of this Act would render the financial statements or consolidated financial statements or directors’ statement (as the case may be) misleading or inappropriate to the circumstances of the company or would impose unreasonable burdens on the company or any officer of the company. [36/2014] |
| (4) The Registrar may make an order under subsection (1) which may be limited to a specific period and may from time to time either on application by the directors or without any such application (in which case the Registrar must give to the directors an opportunity of being heard) revoke or suspend the operation of any such order. |
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| Voluntary revision of defective financial statements, or consolidated financial statements or balance sheet |
202A.—(1) Subject to subsection (3), this section applies at any time —| (a) | in the case where the holding of annual general meetings is dispensed with under section 175A — after the financial statements or, in the case of a parent company, consolidated financial statements and balance sheet are sent to the members of the company under section 203; or | | (b) | in any other case — after the financial statements or, in the case of a parent company, consolidated financial statements and balance sheet are laid before the company at an annual general meeting. [36/2014] |
| (2) Where this section applies, if it appears to the directors of the company that the financial statements or, in the case of a parent company, consolidated financial statements or balance sheet do not comply with the requirements of this Act (including compliance with the Accounting Standards), the directors may cause the financial statements, or consolidated financial statements or balance sheet (as the case may be), to be revised and make necessary consequential revisions to the summary financial statement or directors’ statement. [36/2014] |
(3) The revision of the financial statements, or consolidated financial statements or balance sheet (as the case may be), under subsection (2) must be confined to —| (a) | those aspects in which the financial statements, or consolidated financial statements or balance sheet (as the case may be), did not comply with this Act (including compliance with the Accounting Standards); and | | (b) | the making of any necessary consequential revisions. [36/2014] |
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| (4) Where the Registrar has given the directors of the company a notice under section 202B(1), the directors may not cause the financial statements, or consolidated financial statements or balance sheet (as the case may be), to be revised unless the Registrar agrees with the directors on the manner in which to revise the financial statements, or consolidated financial statements or balance sheet (as the case may be), referred to in section 202B(2)(b). [36/2014] |
(5) The Minister may make regulations under section 411 in respect of the revision of financial statements, consolidated financial statements, balance sheet, directors’ statement or summary financial statement, including but not limited to the following:| (a) | the manner of revision of financial statements, consolidated financial statements, balance sheet, directors’ statement or summary financial statement; | | (b) | the application of any provision of this Act to such financial statements, consolidated financial statements, balance sheet, directors’ statement or summary financial statement subject to such additions, exceptions and modifications as may be specified in the regulations; | | (c) | the taking of steps by the directors to bring any revision of the financial statements, consolidated financial statements, balance sheet, directors’ statement or summary financial statement to the notice of persons likely to rely on the previous financial statements, consolidated financial statements, balance sheet, directors’ statement or summary financial statement; | | (d) | the requirement to lodge the revised financial statements, consolidated financial statements, balance sheet, directors’ statement or summary financial statement with the Registrar and the payment of any filing fee pursuant to such lodgment. [36/2014] |
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| Registrar’s application to Court in respect of defective financial statements, or consolidated financial statements and balance sheet |
| 202B.—(1) If it appears to the Registrar that there is, or may be, a question whether the financial statements or, in the case of a parent company, consolidated financial statements and balance sheet comply with the requirements of this Act (including compliance with the Accounting Standards), the Registrar may give notice to the directors of the company indicating the respects in which it appears that such a question arises or may arise, and specify the period within which the directors must respond. [36/2014] (2) The directors of the company to whom notice under subsection (1) is given must at the end of the period mentioned in subsection (1), or such longer period as the Registrar may allow —| (a) | give the Registrar an explanation of the financial statements, or consolidated financial statements and balance sheet (as the case may be), if the directors do not propose to revise the financial statements, or consolidated financial statements or balance sheet, as the case may be; or | | (b) | inform the Registrar how the directors propose to revise the financial statements, or consolidated financial statements or balance sheet (as the case may be), to address the questions in respect of which the Registrar has given notice. [36/2014] |
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| (3) If the Registrar is satisfied with the explanation of the financial statements, or consolidated financial statements and balance sheet (as the case may be), mentioned in subsection (2)(a), no further action need be taken by the directors in respect of the notice under subsection (1). [36/2014] |
| (4) If the Registrar agrees with the directors on the manner in which to revise the financial statements, or consolidated financial statements or balance sheet (as the case may be), referred to in subsection (2)(b), the directors may cause the financial statements, or consolidated financial statements or balance sheet (as the case may be), to be revised in the manner provided in section 202A. [36/2014] |
(5) The Registrar may apply to Court under subsection (6) if —| (a) | the Registrar does not receive a response from the directors after giving the notice mentioned in subsection (1); | | (b) | the Registrar is not satisfied with the explanation of the financial statements, or consolidated financial statements and balance sheet (as the case may be), mentioned in subsection (2)(a); or | | (c) | the Registrar does not agree with the directors on the manner in which the financial statements, or consolidated financial statements or balance sheet (as the case may be), referred to in subsection (2)(b) are to be revised. [36/2014] |
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(6) An application to Court referred to in subsection (5) may be for —| (a) | a declaration that the financial statements, or consolidated financial statements or balance sheet (as the case may be), do not comply with the requirements of this Act (including compliance with the Accounting Standards); and | | (b) | an order requiring the directors of the company to cause the financial statements, or consolidated financial statements or balance sheet (as the case may be), to be revised. [36/2014] |
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(7) Where the Court orders the preparation of revised financial statements, or consolidated financial statements or balance sheet, under subsection (6), it may give directions as to —| (a) | the auditing of the financial statements, or consolidated financial statements or balance sheet, as the case may be; | | (b) | the making of revisions to the financial statements, consolidated financial statements, balance sheet, directors’ statement or summary financial statement in such manner as the Court considers necessary within a specified period; | | (c) | where the Court has given directions under paragraph (b) to make revisions to the summary financial statement, the review by the auditors of the revised summary financial statement; | | (d) | the making of necessary consequential revisions to any other document; | | (e) | the taking of steps by the directors to bring the making of the order to the notice of persons likely to rely on the previous financial statements, consolidated financial statements, balance sheet, directors’ statement or summary financial statement; and | | (f) | such other matters as the Court thinks fit. [36/2014] |
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(8) If the Court finds that the financial statements, or consolidated financial statements or balance sheet (as the case may be), did not comply with the requirements of this Act (including the Accounting Standards), it may order that all or part of —| (a) | the costs of or incidental to the application; and | | (b) | any reasonable expenses incurred by the company in connection with or in consequence of the preparation of revised financial statements, or consolidated financial statements or balance sheet, as the case may be, |
| must be borne by any or all the directors who were directors of the company as at the date of the directors’ statement which accompanied the defective financial statements, or consolidated financial statements and balance sheet, as the case may be. |
[36/2014] |
| (9) The provisions of this section apply equally to revised financial statements, or consolidated financial statements or balance sheet (as the case may be), in which case they have effect as if the references to revised financial statements, or consolidated financial statements or balance sheet (as the case may be), were references to further revised financial statements, or consolidated financial statements or balance sheet, as the case may be. [36/2014] |
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| Members of company entitled to financial statements, etc. |
203.—(1) A copy of the financial statements or, in the case of a parent company, a copy of the consolidated financial statements and balance sheet (including every document required by law to be attached thereto), which is duly audited and which (or which but for section 201C) is to be laid before the company in general meeting accompanied by a copy of the auditor’s report thereon must be sent to all persons entitled to receive notice of general meetings of the company —| (a) | unless subsection (2) applies — not less than 14 days before the date of the meeting; or | | (b) | if the company is not required to hold an annual general meeting because of section 175A(1)(a) — not later than 5 months after the end of the financial year to which the financial statements, or consolidated financial statements and balance sheet, relate. [36/2014; 15/2017] |
| (2) The financial statements, or consolidated financial statements, balance sheet and documents referred to in subsection (1) may be sent less than 14 days before the date of the meeting as required under subsection (1)(a) if all the persons entitled to receive notice of general meetings of the company so agree. [36/2014] |
| (3) Any member of a company (whether or not entitled to have sent to the member copies of the financial statements, or consolidated financial statements and balance sheet) to whom copies have not been sent and any holder of a debenture must, on a request being made by the member or debenture holder to the company, be furnished by the company without charge with a copy of the last financial statements, or consolidated financial statements and balance sheet (including every document required by this Act to be attached thereto) together with a copy of the auditor’s report thereon. [36/2014] |
| (3A) If default is made in complying with subsection (1) or (3), the company and every officer of the company who is in default shall, unless it is proved that the member or holder of a debenture in question has already made a request for and been furnished with a copy of the financial statements, or consolidated financial statements and balance sheet, and all documents referred to in subsection (1) or (3), each be guilty of an offence and shall each be liable on conviction to a fine not exceeding $5,000 and also to a default penalty. [36/2014] |
| (4) In a case referred to in subsection (1)(b), any member or auditor of the company may, by notice to the company not later than 14 days after the day on which the documents referred to in subsection (1) were sent out, require that a general meeting be held for the purpose of laying those documents before the company. [36/2014] |
| (4A) Where a company is not required to hold an annual general meeting because of section 175A(1)(b), any member or auditor of the company may, by notice to the company not later than 14 days after the day on which the documents referred to in subsection (1) were sent out, require that a general meeting be held for the purpose of laying those documents before the company. [15/2017] |
| (5) Section 175A(5) applies, with the necessary modifications, to the giving of a notice under subsection (4) or (4A). [15/2017] |
| (6) The directors of the company must, within 14 days after the date of giving of the notice mentioned in subsection (4) or (4A), convene a meeting for the purpose referred to in that subsection. [36/2014; 15/2017] |
(7) If default is made in convening the meeting under subsection (6) —| (a) | each director in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000; and | | (b) | the Court may, on application of the member or auditor, order a general meeting to be called. |
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|
| Provision of summary financial statement to members |
| 203A.—(1) Despite section 203 and anything in its constitution, a company may, in such cases as may be specified by regulations and provided all the conditions so specified are complied with, send a summary financial statement instead of copies of the documents referred to in section 203(1) to members of the company. [36/2014] | (2) Where a company sends to its members a summary financial statement under subsection (1), any member of the company, and any holder of a debenture, entitled to be furnished by the company with a copy of the documents referred to in section 203(3) may instead request for a summary financial statement. [36/2014] |
| (3) A summary financial statement need not be sent to any member of the company who does not wish to receive the statement. |
| (4) Copies of the documents referred to in section 203(1) must be sent to any member of the company who wishes to receive them. |
| (5) The summary financial statement must be derived from the company’s annual financial statements or consolidated financial statements, and directors’ statement and must be in such form and contain such information as may be specified by regulations. [36/2014] |
(6) Every summary financial statement must —| (a) | state that it is only a summary of information in the company’s annual financial statements or consolidated financial statements, and directors’ statement; and | | (b) | contain a statement by the company’s auditors (if any) of their opinion as to whether the summary financial statement is consistent with the financial statements or consolidated financial statements, and the directors’ statement and complies with the requirements of this section and any regulations made under subsection (9). [36/2014] |
|
| (6A) The directors of the company must ensure that the summary financial statements comply with the requirements referred to in subsections (5) and (6). [36/2014] |
| (7) If default is made in complying with this section other than subsection (6A) or any regulations made under subsection (9), the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and also to a default penalty. [36/2014] |
| (8) [Deleted by Act 36 of 2014] |
| (9) The Minister may make regulations to give effect to this section, including making provision as to the manner in which it is to be ascertained whether a member of the company wishes to receive copies of the documents referred to in section 203(1) or does not wish to receive the summary financial statement under this section. |
|
| 204.—(1) If any director of a company fails to comply with section 201(2) or (5), he or she shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000. [36/2014] [Act 17 of 2023 wef 01/07/2023] | (1AA) If any director of a company fails to comply with section 201(16), he or she shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000. [Act 17 of 2023 wef 01/07/2023] |
(1A) If any director of a company —| (a) | fails to comply with any provision of this Division (other than section 201(2), (5) or (16)); | | (b) | fails to take all reasonable steps to secure compliance by the company with any such provision; or | | (c) | has by his or her own wilful act been the cause of any default by the company of any such provision, |
| he or she shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years. |
[36/2014] |
| (2) In any proceedings against a person for failure to take all reasonable steps to comply with, or to secure compliance with, the preceding provisions of this Division relating to the form and content of the financial statements of a company or consolidated financial statements of a parent company by reason of an omission from the financial statements or consolidated financial statements, it is a defence to prove that the omission was not intentional and that the information omitted was immaterial and did not affect the giving of a true and fair view of the matters required by section 201 to be dealt with in the financial statements or consolidated financial statements. [36/2014] |
(3) If an offence under this section is committed with intent to defraud creditors of the company or creditors of any other person or for a fraudulent purpose, the offender shall be liable on conviction —| (a) | in the case of an offence under subsection (1), to a fine not exceeding $250,000 or to imprisonment for a term not exceeding 3 years or to both; [Act 17 of 2023 wef 01/07/2023] | | (aa) | in the case of an offence under subsection (1AA), to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 3 years or to both; or [Act 17 of 2023 wef 01/07/2023] | | (b) | in the case of an offence under subsection (1A), to a fine not exceeding $15,000 or to imprisonment for a term not exceeding 3 years or to both. |
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| (4) A person shall not be sentenced to imprisonment for any offence under this section unless in the opinion of the Court dealing with the case the offence was committed wilfully. |
|
| Appointment and remuneration of auditors |
| 205.—(1) The directors of a company must, within 3 months after incorporation of the company, appoint an accounting entity or accounting entities to be the auditor or auditors of the company, and any auditor or auditors so appointed hold office, subject to this section, until the conclusion of the first annual general meeting. [36/2014] | (2) A company must at each annual general meeting of the company appoint an accounting entity or accounting entities to be the auditor or auditors of the company, and any auditor or auditors so appointed hold office, subject to this section, until the conclusion of the next annual general meeting of the company. [36/2014] |
| (3) Subject to subsections (7) and (8) and section 205AF, the directors may appoint an accounting entity to fill any casual vacancy in the office of auditor of the company, but while such a vacancy continues the surviving or continuing auditor or auditors (if any) may act. [36/2014] |
| (4) An auditor of a company may be removed from office by resolution of the company at a general meeting of which special notice has been given, but not otherwise. |
(5) Where special notice of a resolution to remove an auditor is received by a company —| (a) | it must immediately send a copy of the notice to the auditor concerned and to the Registrar; and | | (b) | the auditor may, within 7 days after the receipt by the auditor of the copy of the notice, make representations in writing to the company (not exceeding a reasonable length) and request that, prior to the meeting at which the resolution is to be considered, a copy of the representations be sent by the company to every member of the company to whom notice of the meeting is sent. |
|
| (6) Unless the Registrar on the application of the company otherwise orders, the company must send a copy of the representations as so requested and the auditor may, without affecting the auditor’s right to be heard orally, require that the representations be read out at the meeting. |
(7) Where an auditor of a company is removed from office pursuant to subsection (4) at a general meeting of the company —| (a) | the company may, at the meeting, by a resolution passed by a majority of not less than three‑fourths of such members of the company as being entitled to do so vote in person or, where proxies are allowed, by proxy immediately appoint another accounting entity nominated at the meeting as auditor; or | | (b) | the meeting may be adjourned to a date not earlier than 20 days and not later than 30 days after the meeting and the company may, by ordinary resolution, appoint another accounting entity as auditor, being an accounting entity notice of whose nomination as auditor has, at least 10 days before the resumption of the adjourned meeting, been received by the company. [36/2014] |
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| (8) A company must, immediately after the removal of an auditor from office pursuant to subsection (4), give written notice of the removal to the Registrar and, if the company does not appoint another auditor under subsection (7), the Registrar may appoint an auditor. [36/2014] |
| (9) An auditor appointed pursuant to subsection (7) or (8) must, subject to this section, hold office until the conclusion of the next annual general meeting of the company. |
| (10) If the directors do not appoint an auditor or auditors as required by this section, the Registrar may on the application in writing of any member of the company make the appointment. |
| (11) Subject to subsection (7), an accounting entity is not capable of being appointed auditor of a company at an annual general meeting unless it held office as auditor of the company immediately before the meeting or notice of its nomination as auditor was given to the company by a member of the company not less than 21 days before the meeting. [36/2014] |
| (12) Where notice of nomination of an accounting entity as an auditor of a company is received by the company whether for appointment at an adjourned meeting under subsection (7) or at an annual general meeting, the company must, not less than 7 days before the adjourned meeting or the annual general meeting, send a copy of the notice to the accounting entity nominated, to each auditor (if any) of the company and to each person entitled to receive notice of general meetings of the company. [36/2014] |
(12A) Where a company need not hold an annual general meeting for a financial year because of section 175A(1) and the auditor or auditors of the company is or are to be appointed by a resolution by written means under section 184A by virtue of section 175A(10), references in subsections (11) and (12) to the date of an annual general meeting are references to the time —| (a) | agreement to that resolution is sought in accordance with section 184C; or | | (b) | documents referred to in section 183(3A) in respect of the resolution are served or made accessible in accordance with section 183(3A), |
[15/2017] |
| (13) If, after notice of nomination of an accounting entity as an auditor of a company has been given to the company, the annual general meeting of the company is called for a date 21 days or less after the notice has been given, subsection (11) does not apply in relation to the accounting entity and, if the annual general meeting is called for a date not more than 7 days after the notice has been given and a copy of the notice is, at the time notice of the meeting is given, sent to each person to whom, under subsection (12), it is required to be sent, the company is deemed to have complied with that subsection in relation to the notice. [36/2014] |
| (14) [Deleted by Act 36 of 2014] |
| (15) [Deleted by Act 36 of 2014] |
(16) The fees and expenses of an auditor of a company —| (a) | in the case of an auditor appointed by the company at a general meeting — must be fixed by the company in general meeting or, if so authorised by the members at the last preceding annual general meeting, by the directors; and | | (b) | in the case of an auditor appointed by the directors or by the Registrar under this section or under section 205AF — may be fixed by the directors or by the Registrar, as the case may be, and, if not so fixed, must be fixed as provided in paragraph (a) as if the auditor had been appointed by the company. [36/2014] |
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| (17) If default is made in complying with this section, the company and every director of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000. |
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| Resignation of non‑public interest company auditors |
| 205AA.—(1) An auditor of a non‑public interest company (other than a company which is a subsidiary company of a public interest company) may resign before the end of the term of office for which the auditor was appointed by giving the company a notice of resignation in writing. [36/2014] (2) Where a notice of resignation is given under subsection (1), the auditor’s term of office expires —| (a) | at the end of the day on which notice is given to the company; or | | (b) | if the notice specifies a time on a later day for the purpose, at that time. [36/2014] |
|
| (3) Within 14 days beginning on the date on which a company receives a notice of resignation under subsection (1), the company must lodge with the Registrar a notification of that fact in such form as the Registrar may require. [36/2014] |
(4) In this section and sections 205AB, 205AC and 205AF —| “non‑public interest company” means a company other than a public interest company; |
| “public interest company” means a company which is listed or in the process of issuing its debt or equity instruments for trading on an approved exchange in Singapore, or such other company as the Minister may prescribe. [36/2014; 4/2017] |
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| Resignation of auditor of public interest company or subsidiary company of public interest company |
205AB.—(1) An auditor of a public interest company, or a subsidiary company of a public interest company, may by giving the company a notice of resignation in writing, resign before the end of the term of office for which the auditor was appointed, if —| (a) | the auditor has applied for consent from the Registrar to the resignation and provided a written statement of the auditor’s reasons for resigning and, at or about the same time as the application, notified the company in writing of the application to the Registrar and provided the company with the written statement of the auditor’s reasons for resigning; and | | (b) | the consent of the Registrar has been given. [36/2014] |
| (2) The Registrar must, as soon as practicable after receiving the application from an auditor under subsection (1), notify the auditor and the company whether it consents to the resignation of the auditor. [36/2014] |
(3) A statement made by an auditor in an application to the Registrar under subsection (1)(a) or in answer to an inquiry by the Registrar relating to the reasons for the application —| (a) | is not admissible in evidence in any civil or criminal proceedings against the auditor; and | | (b) | subject to subsection (4), may not be made the ground of a prosecution, an action or a suit against the auditor, |
| and a certificate by the Registrar that the statement was made in the application or in the answer to the inquiry by the Registrar is conclusive evidence that the statement was so made. |
[36/2014] |
| (4) Despite subsection (3), the statement referred to therein may be used in any disciplinary proceedings commenced under the Accountants Act 2004 against the auditor. [36/2014] |
(5) The resignation of an auditor of a public interest company, or subsidiary company of a public interest company, takes effect —| (a) | on the day (if any) specified for the purpose in the notice of resignation; | | (b) | on the day on which the Registrar notifies the auditor and the company of the Registrar’s consent to the resignation; or | | (c) | on the day (if any) fixed by the Registrar for the purpose, |
[36/2014] |
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| Written statement to be disseminated unless application to Court made |
| 205AC.—(1) Where an auditor of a public interest company, or a subsidiary company of a public interest company, gives the company a notice of resignation under section 205AB, the company must within 14 days after receiving the notice of resignation and the written statement of the auditor’s reasons for resigning (called in this section and sections 205AD and 205AE the written statement) send a copy of the written statement to every member of the company. [36/2014; 40/2019] | (2) Copies of the written statement need not be sent out if an application is made to the Court within 14 days, beginning on the date on which the company received the written statement, by either the company or any other person who claims to be aggrieved by the written statement, for a determination that the auditor has abused the use of the written statement or is using the provisions of this section to secure needless publicity for defamatory matter. [36/2014; 40/2019] |
(3) In the case where an application is made under subsection (2) by —| (a) | the company — the company must give notice of the application to the auditor of the company; or | | (b) | any other person — that person must give notice of the application to the company and the auditor of the company. [36/2014] |
|
| (4) If default is made in complying with subsection (1), the company and every director of the company who is in default shall each be guilty of an offence and shall each be liable on conviction to a fine not exceeding $5,000. [36/2014] |
|
| Court may order written statement not to be sent out |
| 205AD.—(1) This section applies if an application has been made under section 205AC(2) in relation to a written statement given by an auditor. [36/2014] (2) If the Court is satisfied that the auditor has abused the use of the written statement or is using the written statement to secure needless publicity for any defamatory matter, the Court —| (a) | must direct that copies of the written statement are not to be sent under section 205AC(1); and | | (b) | may order the auditor, though not a party to the application, to pay the applicant’s costs on the application in whole or in part. [36/2014] |
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(3) If the Court gives directions under subsection (2)(a), the company must, within 14 days beginning on the date on which the directions are given send a notice setting out the effect of the directions to —| (a) | every member of the company; and | | (b) | unless already named as a party to the proceedings, the auditor who gave the written statement. [36/2014] |
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(4) If the Court decides not to grant the application, the company must, within 14 days beginning on the date on which the decision is made or on which the proceedings are discontinued for any reasons —| (a) | give notice of the decision to the auditor who has given the written statement; and | | (b) | send a copy of the written statement to every member of the company and to that auditor. [36/2014] |
|
| (5) If default is made in complying with subsection (3) or (4), the company and every director of the company who is in default shall each be guilty of an offence and shall each be liable on conviction to a fine not exceeding $5,000. [36/2014] |
|
| Privilege against defamation |
205AE. A person is not liable to any action for defamation at the suit of any person —| (a) | in the absence of malice, in respect of the publication of the written statement to the member of the company pursuant to section 205AC(1); or | | (b) | in respect of the publication of the written statement to the member of the company pursuant to section 205AD(4)(b). [36/2014] |
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| Appointment of new auditor in place of resigning auditor |
205AF.—(1) Subject to subsection (3), if —| (a) | an auditor of a non‑public interest company (other than a subsidiary company of a public interest company) gives notice of resignation under section 205AA(1); or | | (b) | an auditor of a public interest company, or a subsidiary company of a public interest company, gives notice of resignation under section 205AB(1), and the Registrar approves the resignation of the auditor under section 205AB(2), |
| the directors of the company in question — |
| (c) | must call a general meeting of the company as soon as is practicable, and in any case not more than 3 months after the date of the auditor’s resignation, for the purpose of appointing an auditor in place of the auditor who desires to resign or has resigned; and | | (d) | upon appointment of the new auditor, must lodge with the Registrar a notification of such appointment within 14 days of the appointment. [36/2014] |
| (2) If the directors of a company fail to appoint an auditor in place of the auditor who desires to resign or has resigned, the Registrar may, on the application in writing of any member of the company, make the appointment. [36/2014] |
| (3) Subsections (1) and (2) do not apply if the financial statements of the company are not required to be audited under this Act, or where the resigning auditor is not the sole auditor of the company. [36/2014] |
| (4) An auditor appointed pursuant to subsection (1) or (2) must, unless the auditor is removed or resigns, hold office until the conclusion of the next annual general meeting of the company. [36/2014] |
| (5) If default is made in complying with subsection (1), the company and every director of the company who is in default shall each be guilty of an offence and shall each be liable on conviction to a fine not exceeding $5,000. [36/2014] |
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| Certain companies exempt from obligation to appoint auditors |
205A.—(1) Despite section 205, a company which is exempt from audit requirements under section 205B or 205C, and its directors, are exempt from section 205(1) or (2), as the case may be.| (2) Where a company ceases to be so exempt, the company must appoint a person or persons to be auditor or auditors of the company at any time before the next annual general meeting; and the auditors so appointed hold office until the conclusion of that meeting. |
| (3) If default is made in complying with subsection (2), the company and every director of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000. |
|
| Dormant company exempt from audit requirements |
205B.—(1) A company is exempt from audit requirements if —| (a) | it has been dormant from the time of its formation; or | | (b) | it has been dormant since the end of the previous financial year. |
| (2) A company is dormant during a period in which no accounting transaction occurs; and the company ceases to be dormant on the occurrence of such a transaction. |
(3) For the purpose of subsection (2), transactions of a company arising from any of the following are to be disregarded:| (a) | the taking of shares in the company by a subscriber to the constitution pursuant to an undertaking of the subscriber in the constitution; | | (b) | the appointment of a secretary of the company under section 171; | | (c) | the appointment of an auditor under section 205; | | (d) | the maintenance of a registered office under sections 142, 143 and 144; | | (e) | the keeping of registers and books under sections 88, 131, 173, 189 and 191; | | (f) | the payment of any fee or charge (including any fee, penalty or interest for late payment) payable under any written law; | | (fa) | the payment of any composition amount payable under section 409B or any other written law; | | (fb) | the payment or receipt by the company of such nominal sum not exceeding such amount as may be prescribed; | | (g) | such other matter as may be prescribed. [36/2014] |
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(4) Where a company is, at the end of a financial year, exempt from audit requirements under subsection (1) —| (a) | the copies of the financial statements or consolidated financial statements and balance sheet of the company to be sent under section 203 need not be audited; | | (b) | section 203 has effect with the omission of any reference to the auditor’s report or a copy of the report; | | (c) | copies of an auditor’s report need not be laid before the company in a general meeting; and | | (d) | the annual return of the company to be lodged with the Registrar must be accompanied by a statement by the directors —| (i) | that the company is a company referred to in subsection (1)(a) or (b) as at the end of the financial year; | | (ii) | that no notice has been received under subsection (6) in relation to that financial year; and | | (iii) | as to whether the accounting and other records required by this Act to be kept by the company have been kept in accordance with section 199. [36/2014] |
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| (5) Where a company which is exempt from audit requirements under subsection (1) ceases to be dormant, it thereupon ceases to be so exempt; but it remains so exempt in relation to accounts for the financial year in which it was dormant throughout. |
| (6) Any member or members holding not less than 5% of the total number of issued shares of the company (excluding treasury shares) or any class of those shares (excluding treasury shares), or not less than 5% of the total number of members of the company (excluding the company itself if it is registered as a member) may, by written notice to the company during a financial year but not later than one month before the end of that year, require the company to obtain an audit of its accounts for that year. |
| (7) Where a notice is given under subsection (6), the company is not entitled to the exemption under subsection (1) in respect of the financial year to which the notice relates. |
| (8) In this section, “accounting transaction” means a transaction the accounting or other record of which is required to be kept under section 199(1). |
|
| Small company exempt from audit requirements |
| 205C.—(1) Subject to subsections (3), (4) and (6), a company that is a small company in respect of a financial year is exempt from audit requirements for that financial year. [36/2014] | (2) Section 205B(4), (6) and (7) applies, with the necessary modifications, to a small company so exempt. [36/2014] |
(3) Subsection (1) does not apply to a parent company unless the parent company —| (a) | is a small company; and | | (b) | is part of a small group. [36/2014] |
|
(4) Subsection (1) does not apply to a subsidiary company unless the subsidiary company —| (a) | is a small company; and | | (b) | is part of a small group. [36/2014] |
|
| (5) In this section, “small company” and “small group” have the meanings given in the Thirteenth Schedule. [36/2014] |
| (6) This section does not apply to a company with respect to its financial statements for a financial year commencing before 1 July 2015 and such a company must prepare its accounts or consolidated accounts and its directors must lay them at its annual general meeting in accordance with Part VI in force immediately before that date. [36/2014] |
| (7) Without limiting section 197(2), a company mentioned in subsection (6) must, when lodging a return with the Registrar under section 197, attach a copy of the accounts or consolidated accounts so prepared. [36/2014] |
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| Registrar may require company exempt from audit requirements to lodge audited financial statements |
205D. Despite sections 205B and 205C, the Registrar may, if he or she is satisfied that there has been a breach of any provision of section 199 or 201 or that it is otherwise in the public interest to do so, by written notice to a company exempt under either of those sections, require that company to lodge with the Registrar, within such time as may be specified in that notice —| (a) | its financial statements duly audited by the auditor or auditors of the company or, where none has been appointed, an auditor or auditors to be appointed by the directors of the company for this purpose; and | | (b) | an auditor’s report mentioned in section 207 in relation to those financial statements prepared by the auditor or auditors of the company. [36/2014] |
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206.—(1) If a company is served with a notice sent by or on behalf of —| (a) | at least 5% of the total number of members of the company; or | | (b) | the holders in aggregate of not less than 5% of the total number of issued shares of the company (excluding treasury shares), |
| requiring particulars of all emoluments paid to or receivable by the auditor of the company or any person who is a partner or employer or employee of the auditor, by or from the company or any subsidiary corporation in respect of services other than auditing services rendered to the company, the company must immediately — |
| (c) | prepare or cause to be prepared a statement showing particulars of all emoluments paid to the auditor or other person and of the services in respect of which the payments have been made for the financial year immediately preceding the service of such notice; | | (d) | forward a copy of the statement to all persons entitled to receive notice of general meetings of the company; and | | (e) | lay such statement before the company in general meeting. [36/2014] |
| (1A) Without affecting subsection (1), a public company must, under prescribed circumstances, undertake a review of the fees, expenses and emoluments of its auditor to determine whether the independence of the auditor has been compromised, and the outcome of the review must be sent to all persons entitled to receive notice of general meetings of the company. |
| (2) If default is made in complying with this section, the company and every director of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000. |
|
| Powers and duties of auditors as to reports on financial statements |
207.—(1) An auditor of a company must report to the members —| (a) | on the financial statements required to be laid before the company in general meeting and on the company’s accounting and other records relating to those financial statements; and | | (b) | where the company is a parent company for which consolidated financial statements are prepared, on the consolidated financial statements. [36/2014] |
| (1A) A report by an auditor of a company under subsection (1) must be furnished by the auditor to the directors of the company in sufficient time to enable the company to comply with the requirements of section 203(1) in relation to that report but no offence is committed by an auditor under this subsection if the directors have not submitted the financial statements for audit as required under this Part in sufficient time, having regard to the complexity of the financial statements, for the auditor to make the auditor’s report. [36/2014] |
(2) An auditor must, in a report under this section, state —| (a) | whether the financial statements and, if the company is a parent company for which consolidated financial statements are prepared, the consolidated financial statements are in the auditor’s opinion —| (i) | in compliance with the requirements of the Accounting Standards; and | | (ii) | give a true and fair view of —| (A) | the financial position and performance of the company; and | | (B) | if consolidated financial statements are required, the financial position and performance of the group; |
|
| | (aa) | if the financial statements or consolidated financial statements do not comply with any requirement of the Accounting Standards and the approval of the Registrar under section 201(12) to such non‑compliance has not been obtained, whether such non‑compliance is, in the opinion of the auditor, necessary for the financial statements or consolidated financial statements to give a true and fair view of any matter required by section 201 to be dealt with in them; | | (b) | whether the accounting and other records required by this Act to be kept by the company and, if it is a parent company, by the subsidiary corporations other than those of which the auditor has not acted as auditor have been, in the auditor’s opinion, properly kept in accordance with this Act; | | (c) | [Deleted by Act 5 of 2004] | | (d) | any defect or irregularity in the financial statements or consolidated financial statements and any matter not set out in the financial statements or consolidated financial statements without regard to which a true and fair view of the matters dealt with by the financial statements or consolidated financial statements would not be obtained; and | | (e) | if the auditor is not satisfied as to any matter referred to in paragraph (a), (aa) or (b), the auditor’s reasons for not being so satisfied. [36/2014] |
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(3) It is the duty of an auditor of a company to form an opinion as to each of the following matters:| (a) | whether the auditor has obtained all the information and explanations that the auditor required; | | (b) | whether proper accounting and other records, excluding registers, required to be kept under section 199(1), have been kept by the company as required by this Act; | | (c) | whether the returns received from branch offices of the company are adequate; | | (d) | [Deleted by Act 36 of 2014] | | (e) | where consolidated financial statements are prepared otherwise than as one set of consolidated financial statements for the group, whether the auditor agrees with the reasons for preparing them in the form in which they are prepared, as given by the directors in the financial statements, |
| and the auditor must state in the auditor’s report particulars of any deficiency, failure or shortcoming in respect of any matter referred to in this subsection. |
[36/2014] |
| (4) An auditor is not required to form an opinion in the auditor’s report as to whether the accounting and other records of subsidiary corporations (which are not incorporated in Singapore) of a Singapore parent company have been kept in accordance with this Act. [36/2014] |
| (5) An auditor of a company has a right of access at all times to the accounting and other records, including registers, of the company, and is entitled to require from any officer of the company and any auditor of a related company such information and explanations as the auditor desires for the purposes of audit. |
| (6) An auditor of a parent company for which consolidated financial statements are required has a right of access at all times to the accounting and other records, including registers, of any subsidiary corporation, and is entitled to require from any officer or auditor of any subsidiary corporation, at the expense of the parent company, such information and explanations in relation to the affairs of the subsidiary corporation as the auditor requires for the purpose of reporting on the consolidated financial statements. [36/2014] |
| (7) The auditor’s report must be attached to or endorsed on the financial statements or consolidated financial statements and must, if any member so requires, be read before the company in general meeting and must be open to inspection by any member at any reasonable time. [36/2014] |
| (8) An auditor of a company or an agent authorised by the auditor in writing for the purpose is entitled to attend any general meeting of the company and to receive all notices of, and other communications relating to, any general meeting which a member is entitled to receive, and to be heard at any general meeting which the auditor attends on any part of the business of the meeting which concerns the auditor in such capacity as auditor. |
(9) If an auditor, in the course of the performance of such duties as auditor of a company, is satisfied that —| (a) | there has been a breach or non‑observance of any of the provisions of this Act; and | | (b) | the circumstances are such that in the auditor’s opinion the matter has not been or will not be adequately dealt with by comment in the auditor’s report on the financial statements or consolidated financial statements or by bringing the matter to the notice of the directors of the company or, if the company is a subsidiary company, of the directors of the parent company, |
| the auditor must immediately report the matter in writing to the Registrar. |
[36/2014] |
| (9A) Despite subsection (9), if an auditor of a public company or a subsidiary corporation of a public company, in the course of the performance of the auditor’s duties as such, has reason to believe that a serious offence involving fraud or dishonesty is being or has been committed against the company by officers or employees of the company, the auditor must immediately report the matter to the Minister. [36/2014] |
| (9B) No duty to which an auditor of a company may be subject is to be regarded as having been contravened by reason of the auditor reporting the matter mentioned in subsection (9A) in good faith to the Minister. |
| (9C) An auditor who is under a legal duty under any other written law to make a report to the Monetary Authority of Singapore in relation to an offence involving fraud or dishonesty that the auditor becomes aware of in the course of the performance of the auditor’s duties as such, is not required to make a report to the Minister under subsection (9A) if the auditor has already made a report in relation to the same offence under that written law to the Monetary Authority of Singapore. |
(9D) In subsection (9A), “a serious offence involving fraud or dishonesty” means —| (a) | an offence that is punishable by imprisonment for a term that is not less than 2 years; and | | (b) | the value of the property obtained or likely to be obtained from the commission of such an offence is not less than $100,000. [36/2014] |
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| (10) An officer of a corporation who refuses or fails without lawful excuse to allow an auditor of the corporation or an auditor of a corporation who refuses or fails without lawful excuse to allow an auditor of its parent company access, in accordance with this section, to any accounting and other records, including registers, of the corporation in the officer’s or auditor’s custody or control, or to give any information or explanation as and when required under this section, or otherwise hinders, obstructs or delays an auditor in the performance of the auditor’s duties or the exercise of the auditor’s powers, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $4,000. [36/2014] |
(11) The reference to the registers of —| (a) | a company in subsection (5); | | (b) | a subsidiary corporation of a parent company in subsection (6); or | | (c) | a corporation in subsection (10), |
| does not include any register kept by the company, subsidiary corporation of a parent company or corporation (as the case may be) under Part 11A. |
[15/2017] |
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| Auditors and other persons to enjoy qualified privilege in certain circumstances |
208.—(1) An auditor shall not, in the absence of malice on the auditor’s part, be liable to any action for defamation at the suit of any person in respect of any statement which the auditor makes in the course of the auditor’s duties as such, whether the statement is made orally or in writing.| (2) A person shall not, in the absence of malice on the person’s part, be liable to any action for defamation at the suit of any person in respect of the publication of any document prepared by an auditor in the course of the auditor’s duties and required by this Act to be lodged with the Registrar. |
| (3) This section does not limit or affect any other right, privilege or immunity that an auditor or other person has as defendant in an action for defamation. |
|
| Provisions indemnifying auditors |
| 208A.—(1) Any provision, whether in the constitution or in any contract with a company or otherwise, for exempting any auditor of the company from, or indemnifying the auditor against, any liability which by law would otherwise attach to the auditor in respect of any negligence, default, breach of duty or breach of trust of which the auditor may be guilty in relation to the company is void. [36/2014] (2) This section does not prevent a company from indemnifying such auditor against any liability incurred or that will be incurred by the auditor —| (a) | in defending any proceedings (whether civil or criminal) in which judgment is given in the auditor’s favour or in which the auditor is acquitted; or | | (b) | in connection with any application under section 76A(13) or 391 or any other provision of this Act, in which relief is granted to the auditor by the court. [36/2014] |
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| Duties of auditors to trustee for debenture holders |
| 209.—(1) The auditor of a borrowing corporation must within 7 days after furnishing the corporation with any financial statements or any report, certificate or other document which the auditor is required by this Act or by the debentures or trust deed to give to the corporation, send by post to every trustee for the holders of debentures of the borrowing corporation a copy thereof. [36/2014] | (2) Where, in the performance of the auditor’s duties as auditor of a borrowing corporation, the auditor becomes aware of any matter which is in the auditor’s opinion relevant to the exercise and performance of the powers and duties imposed by this Act or by any trust deed upon any trustee for the holders of debentures of the corporation, the auditor must, within 7 days after so becoming aware of the matter, send by post a report in writing on such matter to the borrowing corporation and a copy thereof to the trustee. |
| (3) If any person fails to comply with subsection (2), the person shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000 and also to a default penalty. |
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| Interpretation of this Part |
209A. In this Part, unless the contrary intention appears —| “balance sheet”, in relation to a company, means the balance sheet, by whatever name called, prepared in accordance with the Accounting Standards; |
| “consolidated financial statements” has the meaning given by the Accounting Standards; |
“consolidated total assets” —| (a) | in the case where consolidated financial statements are prepared in relation to a group — are determined in accordance with the accounting standards applicable to the group; or | | (b) | in the case where consolidated financial statements are not prepared in relation to a group — means the aggregate total assets of all the members of the group; |
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| “directors’ statement” means the statement of the directors mentioned in section 201(16); |
| “entity” means an entity that is referred to in the Accounting Standards in relation to the preparation of financial statements and the requirements for the preparation of financial statements; |
| “financial statements” means the financial statements of a company required to be prepared by the Accounting Standards; |
| “group” has the meaning given by the Accounting Standards; |
| “parent company” means a company that is required under the Accounting Standards to prepare financial statements in relation to a group; |
| “subsidiary company” means a company that is a subsidiary as defined in the Accounting Standards; |
| “subsidiary corporation” means a corporation that is a subsidiary as defined in the Accounting Standards; |
| “ultimate parent corporation” means a corporation which is a parent but is not a subsidiary, within the meaning of the Accounting Standards. [36/2014] |
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| 209B. [Repealed by Act 5 of 2004] |
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