What to Expect When Engaging an Audit Firm in Singapore

Whether you are a startup growing steadily, an SME expanding your reach, or an established corporation refining your financial structure, engaging a professional audit firm in Singapore is an important milestone. The audit process is not just about compliance — it’s about reinforcing the credibility, transparency, and operational health of your business.

If this is your first time working with an audit firm, understanding what to expect can help you prepare better and ensure a smooth collaboration. In this article, we’ll walk you through what companies can typically expect when engaging an audit firm in Singapore.

1. Initial Consultation and Understanding of Your Business

The first step in engaging a professional audit firm is an initial consultation. During this meeting, the auditors will aim to understand:

• Your company’s business operations

• Organizational structure

• Financial reporting processes

• Industry-specific challenges

This step is crucial because every business is different, and a good audit firm tailors its audit plan according to your company’s unique profile.

A reputable firm like Koh & Lim Audit PAC invests time in this early stage to ensure that the audit approach is effective, efficient, and relevant to your operations.

2. Formal Engagement and Audit Planning

Once both parties agree to proceed, a formal engagement letter will be signed. This document outlines:

• The scope of the audit

• Timelines and milestones

• Deliverables and responsibilities

• Audit fees and billing terms

After engagement, the audit firm begins planning the audit. This involves risk assessment procedures such as:

• Identifying areas that may require deeper focus (e.g., revenue recognition, inventory management, cash handling)

• Setting a timeline for fieldwork and reporting

• Allocating audit resources based on complexity and size

Audit planning ensures that the actual audit work is organized and conducted systematically, minimizing disruptions to your daily operations.

3. Request for Financial and Business Documentation

Before the fieldwork starts, your audit firm will request a list of necessary documents, such as:

• Financial statements (balance sheet, profit & loss, cash flow)

• General ledger reports

• Bank statements and reconciliations

• Invoices, contracts, and purchase orders

• Tax filings and compliance documents

• Company constitution, board resolutions, and shareholder information

Providing accurate and complete documents promptly helps auditors work more efficiently and reduces delays in the audit process.

4. Fieldwork and On-Site Auditing

Fieldwork is the heart of the audit process. During this phase, the audit team visits your office (or accesses your financial systems remotely) to perform detailed testing and verification.

Key activities during fieldwork include:

• Examining supporting documents for transactions

• Testing internal controls and processes

• Performing analytical reviews

• Conducting interviews with key personnel

• Observing physical inventory counts (if applicable)

The goal is to validate the information presented in the financial statements and assess the effectiveness of your internal controls.

During fieldwork, it’s normal for auditors to ask questions, request additional documentation, and seek clarification on specific transactions. Maintaining open communication with your auditors during this phase ensures that any issues are addressed promptly.

5. Drafting of Audit Findings and Discussions

After completing fieldwork, the audit team drafts their findings. If they uncover significant issues, such as material misstatements, compliance breaches, or weaknesses in internal controls, they will discuss them with management before finalizing the audit report.

At this stage, you can expect:

• A preliminary review meeting to go over findings

• Discussions on proposed audit adjustments (if any)

• Opportunities to provide explanations or additional evidence

A good audit firm will not just highlight problems — they will offer practical recommendations to strengthen your processes and prevent future issues.

6. Issuance of Audit Report

Once all issues have been addressed and management agrees on any necessary adjustments, the audit firm issues the final audit report. This report includes:

• An opinion on whether the financial statements present a true and fair view

• Notes on significant accounting policies and judgments

• Any findings or observations worth highlighting to shareholders or directors

The audit report is a powerful document that not only fulfills compliance obligations but also strengthens your company’s reputation with banks, investors, and regulators.

Firms like Koh & Lim Audit PAC ensure that reports are prepared professionally, accurately, and delivered on time to support your financial reporting cycle.

7. Management Letter and Recommendations

In addition to the formal audit report, many audit firms issue a management letter. This letter provides:

• Observations on internal controls

• Risk management issues

• Operational inefficiencies

• Practical recommendations for improvement

For SMEs and growing businesses, these recommendations are incredibly valuable. They provide actionable insights that can lead to stronger financial health, reduced risk exposure, and improved business efficiency.

8. Post-Audit Support and Follow-Up

A professional audit firm doesn’t end the relationship once the audit report is delivered. Instead, they continue to provide support by:

• Answering questions from directors or stakeholders

• Assisting with the implementation of recommended improvements

• Preparing for future audits or regulatory reviews

• Advising on new accounting standards or regulatory changes

This ongoing partnership ensures that your business continues to evolve, stays compliant, and maintains high financial reporting standards year after year.

9. Common Challenges and How to Overcome Them

While most audits proceed smoothly, challenges can arise if companies are unprepared. Common challenges include:

• Incomplete or disorganized documentation

• Delays in providing requested information

• Resistance from internal staff unfamiliar with audit processes

• Discovering control weaknesses during the audit

To minimize issues:

• Prepare documents early

• Educate your team on the audit process

• Maintain clear and open communication with your auditors

Approaching the audit proactively and collaboratively can turn it into a value-adding experience rather than a stressful obligation.

10. How to Choose the Right Audit Firm

Not all audit firms are the same. When selecting a partner, consider:

• Accreditation with ACRA and relevant bodies

• Experience with your industry and company size

• Clear communication and responsiveness

• Transparent pricing and fee structures

• A reputation for professionalism and reliability

Choosing the right firm ensures not just compliance, but also strategic business support that grows with your company.

Conclusion

Engaging a professional audit firm in Singapore is a critical step in ensuring financial transparency, regulatory compliance, and long-term business success. From initial consultation and risk assessment to fieldwork, reporting, and post-audit support, each stage of the audit process plays a crucial role in strengthening your business.

By working with a trusted partner like Koh & Lim Audit PAC, you can expect not only a smooth audit experience but also valuable insights that drive operational excellence and strategic growth.

Whether you’re undergoing your first audit or looking for a better auditing experience, knowing what to expect allows you to prepare well and maximize the benefits that a professional audit can bring to your business.