Unaudited Financial Statements in Singapore: What SMEs Need to Know

What Are Unaudited Financial Statements?

Unaudited financial statements are financial reports prepared by a company without independent audit verification from an external auditor.

These reports are commonly used by:

• small and medium-sized enterprises (SMEs)

• exempt private companies

• businesses that qualify for audit exemption

  
  

Although they are not audited, the statements must still be prepared accurately and in accordance with Singapore Financial Reporting Standards (SFRS).

Typical unaudited financial statements include:

• Statement of Financial Position (Balance Sheet)

• Profit and Loss Statement

• Cash Flow Statement

• Notes to Financial Statements

Why Unaudited Financial Statements Matter

Many business owners assume that if financial statements are not audited, they are less important. In reality, unaudited financial statements are still essential for:

• annual return filing

• corporate tax filing

• management reporting

• business financing applications

• investor reporting

  
  

Accurate financial statements help businesses understand their financial performance and maintain regulatory compliance.

Who Can Prepare Unaudited Financial Statements?

In Singapore, companies that qualify for audit exemption can prepare unaudited financial statements instead of audited reports.

Generally, a company may qualify as a “small company” if it satisfies at least two of the following:

• annual revenue not more than S$10 million

• total assets not more than S$10 million

• not more than 50 employees

This exemption significantly reduces compliance costs for SMEs.

What Is Included in Unaudited Financial Statements?

Unaudited financial statements typically include several core sections.

1. Statement of Financial Position

Also known as the balance sheet, this shows:

• company assets

• liabilities

• shareholders’ equity

It provides a snapshot of the company’s financial health at a specific date.

2. Profit and Loss Statement

This report summarises:

• revenue

• expenses

• net profit or loss

It helps business owners evaluate operational performance and profitability.

3. Cash Flow Statement

The cash flow statement tracks:

• operating cash flow

• investing activities

• financing activities

This helps businesses monitor liquidity and cash management.

4. Notes to Financial Statements

These notes provide additional explanations regarding:

• accounting policies

• liabilities

• financial commitments

• related-party transactions

Proper disclosures improve transparency and reporting accuracy.

Unaudited vs Audited Financial Statements

Many SMEs are unsure about the difference between audited and unaudited reports.

Unaudited Financial Statements	Audited Financial Statements
Prepared internally or by accountants	Reviewed by external auditors
Lower compliance cost	Higher compliance cost
Suitable for audit-exempt companies	Required for non-exempt companies
Faster preparation process	More detailed verification process

Even without an audit, companies remain responsible for ensuring their financial data is accurate.

Why Accurate Bookkeeping Is Important

The quality of unaudited financial statements depends heavily on bookkeeping accuracy.

Poor bookkeeping may result in:

• incorrect financial reports

• tax filing issues

• compliance risks

• cash flow inaccuracies

Maintaining proper accounting records throughout the year simplifies year-end financial statement preparation.

How Unaudited Financial Statements Support Tax Filing

Financial statements are closely connected to:

• Estimated Chargeable Income (ECI) filing

• Corporate tax submission (Form C-S/Form C)

• Annual return filing with ACRA

Inconsistent financial data across filings may trigger compliance reviews or tax queries.

This is why businesses should ensure their bookkeeping and financial reporting are aligned.

Common Mistakes SMEs Make

Many growing businesses encounter issues such as:

• incomplete bookkeeping records

• missing supporting documents

• incorrect expense classification

• outdated accounting systems

These mistakes can delay financial reporting and affect tax compliance.

Benefits of Professional Financial Statement Preparation

Working with professional accountants helps businesses:

• improve reporting accuracy

• ensure compliance with SFRS

• prepare reports efficiently

• reduce risk of filing errors

Professional support is especially valuable for SMEs without an internal finance team.

How Podwerx Helps with Unaudited Financial Statements

Podwerx provides end-to-end accounting and financial reporting support for SMEs.

Financial Statement Preparation

• preparation of unaudited financial statements

• SFRS-compliant reporting

• year-end closing support

Bookkeeping Services

• monthly bookkeeping

• account reconciliation

• cloud accounting support

Tax & Compliance Support

• ECI filing

• corporate tax submission

• annual return filing support

By integrating bookkeeping, reporting, and compliance, Podwerx helps businesses maintain accurate and reliable financial records.