What Are Unaudited Financial Statements?

Unaudited financial statements are financial reports prepared by a company without independent verification from an external auditor. They present the company’s financial performance and position based on internal accounting records and management preparation.

These reports provide a snapshot of a company’s finances and are widely used by SMEs for internal decision-making, regulatory compliance, and tax reporting.

Although they do not include an external audit opinion, unaudited financial statements must still be prepared accurately and in accordance with applicable accounting standards.

Key Components of Unaudited Financial Statements

A typical set of unaudited financial statements usually includes:

1. Statement of Financial Position (Balance Sheet)

This shows the company’s assets, liabilities, and equity at the end of the financial year.

2. Statement of Comprehensive Income (Profit & Loss)

This report summarises:

• Revenue

• Operating expenses

• Net profit or loss

  
  

3. Statement of Cash Flows

Tracks the movement of cash across:

• Operating activities

• Investing activities

• Financing activities

  
  

4. Statement of Changes in Equity

Shows changes in shareholders’ equity throughout the financial year.

5. Notes to the Financial Statements

These notes provide detailed explanations of financial data and accounting policies used.

Together, these documents provide a clear overview of a company’s financial health.

Who Needs Unaudited Financial Statements in Singapore?

All companies in Singapore must maintain proper financial records and prepare financial statements for each financial year.

However, not all companies are required to have their accounts audited.

Many businesses qualify for audit exemption and therefore only need to prepare unaudited financial statements.

Companies That May Qualify for Audit Exemption

A private company may be considered a “small company” if it meets at least two of the following criteria:

• Annual revenue ≤ S$10 million

• Total assets ≤ S$10 million

• ≤ 50 employees

Companies that qualify under these thresholds may prepare unaudited financial statements instead of audited accounts.

Dormant companies with no significant business activity may also be exempt from audit requirements.

Why Unaudited Financial Statements Are Important

Even if an audit is not required, preparing accurate financial statements is still essential for businesses.

1. Corporate Tax Filing

Companies may need to submit financial statements when filing corporate income tax returns with tax authorities.

2. Business Decision Making

Unaudited financial statements help business owners monitor:

• profitability

• expenses

• cash flow

• growth trends

  
  

3. Compliance Requirements

Companies must maintain proper accounting records under Singapore’s regulatory framework.

4. Financing and Banking

Banks and investors often request financial statements when evaluating loan applications or funding requests.

Unaudited vs Audited Financial Statements

Feature	Unaudited Financial Statements	Audited Financial Statements
Verification	No external audit	Verified by an independent auditor
Cost	Lower preparation cost	Higher due to audit procedures
Purpose	Internal management & compliance	Regulatory assurance & credibility
Preparation	Accountant or internal team	Certified external auditor

Audited statements provide higher assurance for investors and regulators, while unaudited reports are often sufficient for smaller companies or internal reporting.

How to Prepare Unaudited Financial Statements

Preparing financial statements usually involves several key steps:

1. Collect Financial Data

Gather all records for the financial year, including:

• bank statements

• invoices

• expense receipts

• payroll records

  
  

2. Compile Financial Reports

Convert raw accounting data into formal reports such as profit & loss statements and balance sheets.

3. Review for Compliance

Ensure the reports follow applicable accounting standards such as Singapore Financial Reporting Standards (SFRS).

4. Present at Annual General Meeting

Financial statements are typically reviewed by company directors and presented to shareholders during the annual meeting.

5. Use for Regulatory Filing

These reports support annual compliance obligations, such as tax filings and regulatory submissions.

Common Challenges SMEs Face

Many SMEs struggle with preparing financial statements due to:

• Incomplete bookkeeping records

• Lack of accounting expertise

• Errors in financial reporting

• Last-minute tax preparation

• Difficulty meeting compliance deadlines

Without accurate financial records, businesses risk compliance issues and poor financial visibility.

How Podwerx Helps Businesses Prepare Unaudited Financial Statements

Podwerx provides end-to-end support for companies that need to prepare reliable financial statements.

Accounting Services

• Monthly accounting support

• Financial reporting

• Year-end account preparation

  
  

Professional Bookkeeping

• Transaction recording

• Expense categorisation

• Bank reconciliation

  
  

Financial Statement Compilation

• Preparation of unaudited financial statements

• Compliance with accounting standards

• Support for annual tax filing

  
  

Advisory and Compliance Support

• Financial health analysis

• Tax compliance preparation

• Business growth insights

  
  

With the right accounting partner, companies can ensure their financial statements are accurate, compliant, and useful for strategic decision-making.