The 10 Best Compliance Audit Services Companies in Singapore for Assessing Tax Laws and Regulations Compliance

How to Obtain Independent Compliance Audit and Evaluation for Regulatory Adherence

The purpose of a compliance audit is to evaluate whether an organisation is sticking to the agreed-upon terms of a contract or specific laws and regulations. By examining a company's practices, compliance audits help regulators determine if the company follows its operating license terms. The audit report will evaluate the security policies, compliance preparations, risk management procedures, and user access controls.

A compliance audit is, in short, a way to measure whether an organisation meets minimum requirements. The audit report will identify gaps in coverage and provide solutions for potential problems. For example, audits could verify the following:

• Whether the terms of a bond indenture are being followed
• The accuracy of royalty calculation and payment 
• That workers’ compensation is correctly reported

What is Compliance Auditing?

As a business owner or manager, you need to ensure that your company complies with relevant regulations. This can be daunting, especially if you are unfamiliar with the regulatory requirements.

There are many reasons why compliance is essential. Aside from demonstrating professional standards, such as ISO 9000, ISO 14000, and other guidelines, failing to comply with regulatory guidelines could result in sanctions and penalties.

One way to ensure compliance is to undergo a compliance assessment. A compliance assessment evaluates your company's compliance with finance and taxation, data protection, employment, anti-corruption, and environmental, health and safety regulations. It is conducted by an independent third party who includes a review of your company's policies and procedures, as well as on-site inspections.

A compliance assessment aims to identify areas of non-compliance and recommend corrective action. It can also help you understand the regulations' requirements and how to best meet them.

If you are thinking of undergoing a compliance assessment, here are some things you should know:

• A compliance assessment is a comprehensive overview of your company's current policies and procedures as well as inspections. The specific scope of the evaluation will depend on the regulations being assessed and the size and complexity of your company.
• The cost of a compliance assessment will depend on the scope of the assessment and the size and complexity of your company. It is vital to request quotes from several assessors so that you can compare costs.
• The duration of a compliance assessment will depend on the scope of the assessment and the size and complexity of specific operations. Generally, assessments can be completed within a few weeks.

What is Regulatory Compliance?

Compliance with applicable laws, rules, regulations, standards, and requirements is a company's observance of these procedures. In instances of regulatory non-compliance, firms may be fined by the government. Businesses will be compelled to stop operating in severe (and/or recalcitrant) cases of non-compliance.

There are 536 Acts that are in force in Singapore as of 202. It's reasonable to assume that all aspects of enterprises are regulated. As a result, corporate regulatory compliance officer positions were created. The primary aim of these jobs is to ensure that the firm complies with stringent, intricate legal rules and regulations.

5 Areas of Regulatory Compliance Explained

• Corporate Reporting and Taxation

According to Singapore’s Companies Act, the primary legislation regulating the conduct of companies in the country, companies must comply with the annual filing requirements of the Accounting and Corporate Regulatory Agency (ACRA) and the Inland Revenue of Singapore (IRAS).

The Companies Act requires all companies to prepare and submit annual financial statements to ACRA. These financial statements must give an accurate and fair view of the company's state of affairs and must comply with Singapore Financial Reporting Standards (SFRS). In addition, companies are required to prepare and submit an annual return to ACRA, which must contain information such as the names of the company’s directors and shareholders and the company's registered address.

Companies are also obligated to comply with the tax filing requirements of IRAS. All businesses must file a corporate income tax return and an estimated chargeable income tax return annually. In addition, they are also required to make tax payments every quarter.

• Data Protection

The Personal Data Protection Commission (PDPC) is the statutory body that is responsible for administering and enforcing the Personal Data Protection Act (PDPA) in Singapore. The PDPA regulates the collection, use, disclosure and care of personal data by organisations in Singapore.

Businesses that collect, use or disclose personal data must comply with the requirements of the PDPA. These requirements include obtaining consent from individuals for the collection, use and disclosure of their personal data, as well as ensuring that the personal data is accurate and up-to-date. In addition, organisations must take reasonable steps to protect personal data from unauthorised access, use or disclosure.

• Environmental, Health, and Safety

As a business owner or manager, you are responsible for ensuring that your workplace complies with environmental, health and safety (EH&S) regulations. To help you meet this responsibility, Singapore's Ministry of Manpower (MOM) has introduced the Workplace Safety and Health (WSH) compliance assessment.

The WSH compliance assessment is a voluntary assessment programme that aims to help businesses improve their workplace safety and health standards. It is open to all workplaces, regardless of size or industry.

The assessment comprises two parts: a self-assessment and an on-site assessment.

• Self-assessment

The self-assessment is a questionnaire that covers all aspects of workplace safety and health, from general housekeeping to the use of machinery. The questionnaire can be accessed online or the business can request a hard copy from MOM.

• On-site assessment

The on-site assessment is conducted by a team of WSH experts. They will assess your workplace against the requirements set out in the WSH (General Provisions) Regulations. The assessment team will also give you feedback on how well your workplace is complying with the regulations, and offer suggestions on how to improve. After the assessment, you will receive external audit reports detailing the findings and recommendations.

• Employment

The Singapore Employment Compliance Assessment (ECAS) is a government-led scheme that determines compliance with employment laws and regulations. It was introduced in 2013 to improve employment outcomes for Singaporeans.

The ECAS covers a wide range of employment matters, including:

• wages and working hours
• leave entitlements
• retrenchment benefits
• termination of employment
• workplace safety and health
• work injury compensation
• employment of foreign workers

Employers who are found to be non-compliant with the law may face penalties, including fines and imprisonment. The ECAS is an important tool for ensuring that employers in Singapore comply with the law. It helps to create a level playing field for businesses and protects the rights of workers.

• Corruption

The high regulatory compliance assessment for corruption in Singapore is attributable to the country's robust legal and institutional framework, as well as its strong political will to combat corruption. For instance, all public sector organisations have to put in place internal controls to prevent and detect corruption. 

Singapore has also put in place a number of laws and regulations to strengthen its anti-corruption regime. For instance, the Prevention of Corruption Act criminalises both active and passive bribery, and provides for enhanced penalties for public servants who commit corrupt acts. The Penal Code also contains a number of provisions that can be used to prosecute corruption-related offences. In addition, the Independent Commission Against Corruption is a statutory body that is empowered to investigate and prosecute corruption offences.

The Singapore Police Force has a Corruption Reporting Bureau which receives and investigates complaints of corruption. The ICAC also has a Corruption Reporting Centre which allows members of the public to lodge complaints of corruption anonymously.

Who is Obligated to Undergo Compliance Audit?

There are generally four groups of people who are obligated to undergo compliance audits: managers, employees, contractors, and vendors. Managers are responsible for ensuring that their employees comply with the organisation's policies and procedures. Employees must follow the procedures set forth by their managers. Contractors and vendors must follow the procedures set forth by the company in its contracts and agreements.

Companies typically have a compliance officer who is responsible for overseeing the compliance program and ensuring that all employees, contractors, and vendors comply with the company's policies and procedures. The compliance officer may also be responsible for conducting compliance audits.

Managers, employees, contractors, and vendors may be subject to disciplinary action, up to and including termination of their employment or contract, if they fail to comply with the organisation's policies and procedures.

Organisations should consult with their legal counsel to determine which compliance audits are required by law and which are best suited for their particular industry.

Benefits of Regulatory Compliance

Compliance with regulations can be a daunting task for businesses, but the benefits are clear. By taking the time to assess your company's compliance risks and put in place appropriate controls, you can protect your business and create a safer workplace.

There are many benefits to complying with regulations, including protecting public health and safety, ensuring the quality of products and services, and promoting fair competition.

Audits evaluate areas of potential improvement and make suggestions for how to fix them or prevent future issues. Auditors also check for compliance with federal regulations, which are often subject to change. In addition, audits identify risk factors related to noncompliance within the business and report these findings to management and relevant regulatory agencies as needed.

Compliance with regulations can also promote fair competition by ensuring that all businesses are held to the same standards. This level playing field can help to prevent larger, more established businesses from unfairly taking advantage of smaller, less established businesses.

Other benefits of complying with regulations include the following:

• improved safety for employees and customers
• reduced risk of accidents and injuries
• reduced liability for the company
• improved relationships with regulatory agencies
• lower insurance premiums
• improved reputation among customers and suppliers
• improved ability to attract and retain employees

How Compliance Audit Differs from Internal and Operational Audits

Although some people believe that compliance audits and internal audits are the same (and often use employees from an organisation's internal audit team), these two types of audits represent different approaches. Internal audits make sure that a company follows its own process, procedures, and guidelines — in other words, its own internal controls. Compliance audits, however, are done to figure out whether an organisation obeys external regulations or requirements.

Internal audits prevent and detect errors, illegal acts, or ensure the organisation is fulfilling outside obligations. Examples are operational audit, IT audit, financial audit, and regulatory compliance audit; each with different formalities to appropriate the subject area. While private and not generally accessible to regulators, internal audits assess whether a business is compliant with the standards. Sometimes companies will release the results of social compliance audits as part of a rebranding effort. Internal audits are often conducted prior to external compliance audits.

Internal and external audits are two types of compliance evaluations that differ in terms of their orientation. External inspections, for example, ensure that the firm follows legislation or ethical standards. Ideally, both internal and compliance audit activities should be conducted in the same language to ensure thoroughness.

Operational audits are essential in measuring how well departments and activities function within an organisation and if they align with the company's goals.

Take note as well the differences between accreditation and certifications, which may be an outcome of an assessment. An accreditation is an organisation's way of legitimising itself within its industry. On the other hand, certifications are provided to individuals in order to give them a measure of their competency and authority within a specific area.

Risk Assessment vs. Compliance Assessment

Compliance is prescriptive, whereas the risk approach is predictive. Compliance rules and regulations are often implemented proactively, but new requirements may take on a reactive style. In risk management, there are gray areas that may be addressed, but in the compliance world, things are looked at in black and white as is shown in the following points:

• Generally, people within the organisation adapt quickly to possible risks, but risk management agencies often take significantly longer to objectively identify those risks.
• Risk should be improved continuously, while compliance is only a starting point for security.
• Risk activities are commonly associated with processes – compliance adheres to a set of requirements.
• Risk deals with the unknown while compliance concentrates on following the rules.
• The risk management program is completely within the company, whereas compliance is dependent on external regulatory bodies.

Different Compliance Audit Criteria Explained

There are different types of compliance audits that focus on different aspects of a company’s operations. The most common types of compliance audits are:

• Data Protection Audit

A data protection audit focuses on a company’s compliance with data protection laws. The independent auditor will review a company’s policies and procedures to ensure that they are adequate and being followed. The auditor will also look for any red flags that may indicate data protection violations.

• Environmental Audit

Environmental audits focus on a company’s compliance with environmental laws. The auditor will review policies and procedures to ensure they are adequate, as well as look for any indications of environmental violations.

• Financial Audit

The purpose of a financial audit is to check whether a company has been adhering to financial laws. To do this, the auditor will analyse the company's past and present financial statements for accuracy against Generally Accepted Accounting Principles. They will also be on the lookout for anything that could suggest illegal or incorrect activity.

• Labour and Employment Audit

A labour and employment audit pays special attention to a company’s allegiance to labour and employment laws. The auditor will study a company’s policies and procedures to confirm that they are adequate and being obeyed. The auditor will also search for any signs that may suggest labour or employment violations.

• Product Safety Audit

An audit of a company's product safety compliance is the goal of a product safety audit. The auditor will examine a firm's policies and procedures to verify that they are adequate and that they are implemented. The auditing will also look for any potential warning signs of product safety issues.

• Anti-Bribery and Corruption Audit

This audit focuses on a company’s compliance with anti-bribery and corruption laws. The auditor will review a company’s policies and procedures to ensure that they are adequate, being followed, and not red flags for bribery or corruption.

Challenges in Regulatory Compliance Processes

Singapore's compliance landscape is constantly evolving, and companies face challenges in keeping up with the latest changes. Here are some of the key challenges that come with regulatory compliance:

• Keeping up with changing regulations: Businesses must stay up to date to ensure that they are in compliance. This can be a challenge, especially for small and medium-sized enterprises (SMEs) that may not have the resources to dedicate to compliance.
• Managing cross-border compliance: If your business is based in Singapore, you'll need to follow both foreign and local regulations. This can be complex because various jurisdictions have unique rules.
• Dealing with complex regulations: The regulatory environment in Singapore is complicated, and businesses must have a thorough knowledge of the regulations to assure compliance. This might be tough, especially for small and medium-sized enterprises that do not possess the financial means to comply.
• Managing risks: Risks must be identified and managed by businesses. This might be difficult since there are a variety of risks to consider, and it's hard to find them all.
• Ensuring compliance: While it may be challenging for companies to ensure compliance with all regulations, it is important to do so. This usually requires investing in more resources and manpower.

Compliance Audit Process Overview

Here are the steps in a compliance audit:

• After the company contacts the auditor, they decide whether or not the compliance auditor’s skillset meets their needs.
• For occasions when compliance audits should invoke client-attorney privilege, the auditing firm sends a proposal to either the company or its attorney.
• At the outset, the auditor explains the audit procedures and what is necessary to him or her. The auditor may give auditing checklists so that the customer can prepare.
• For a small firm, the auditor may conduct an audit over the phone. The company responds to audit questionnaires and supplies all required materials to the auditor. Auditors can visit locations in person to inspect paperwork, go through workspaces, study infrastructure and security features, and talk with management and staff.
• Within a short amount of time, the audit report should be delivered. For social compliance audits of facilities, the turnaround could even be as quick as 24 hours. At the last meeting, after presenting and discussing the findings in the report with recommendations to fix any areas potentially at risk.
• It is critical for businesses to identify and correct any shortcomings within 120 days of the audit, whether they are under a regulatory deadline or not. However, auditing firms generally provide follow-up assistance to help organisations resolve any risks or gaps. After that, auditors check to see if the requirements have been fulfilled.

Audit Exemptions Guidelines

The Small Company Concept was introduced by ACRA in July 2015 to exempt qualifying businesses from the requirement of having their accounts audited as well as appointing an auditor.

Companies need to fulfil at least two of the following criteria to be exempted: 

• Total revenue must not exceed S$10 million;
• Total number of full-time employees must not exceed 50; or
• Total assets of the company should not exceed S$10 million

In addition, companies must not be: a public listed company; or a Singapore subsidiary of a foreign company that is not itself a small company.

If a company does not qualify for audit exemption, it must prepare and file audited financial statements with ACRA. The statements must be prepared in accordance with Singapore Financial Reporting Standards (SFRS) or International Financial Reporting Standards (IFRS), as appropriate.

The Small Company Concept was implemented to reduce the compliance burden on small businesses in Singapore. The audit exemption will help save business owners time and money, as they will not have to prepare and file audited financial statements.

However, businesses should note that they may still be required to appoint an auditor if they are unable to comply with the Singapore Companies Act. Appointing an auditor is a requirement for companies that do not qualify for audit exemption.

How Do Companies Ensure Compliance?

A compliance audit for small companies might be tough since it necessitates investment in resources and personnel. However, external auditors or in-house teams may be hired to conduct compliance audits.

To prepare for a compliance audit, companies should:

• Understand the Singapore regulatory landscape and which laws and regulations apply to them
• Assess their compliance risks and put in place controls to mitigate these risks
• Have a plan for responding to audit findings
• Prepare audit documentation in advance. This should include policies and procedures, as well as records of compliance activities
• Appoint a team of employees who are responsible for compliance. This team should have the necessary skills and knowledge to support the compliance function
• Conduct regular training for employees on compliance matters
• Set up a system for tracking and reporting compliance breaches

Qualities to Look for in Compliance Auditors

When choosing a compliance auditor, it is important to consider the following qualities:

• Independence

An ideal external compliance auditor would have no conflicts of interest and would be unaffiliated with the company being audited. This maximises the credibility of the assessment report and increases the confidence with which the company can prove that it has designed and implemented an appropriate set of controls.

• Experience

Before you hire an auditor, make sure they have experience with the specific certification your company is seeking. This will ensure that the auditor is up to speed on Singapore's regulatory landscape and knows how to evaluate compliance risks. Furthermore, don't just think about the compliance you need right now to stay within the law. Examine your industry closely to see what other types of certification are becoming popular.

• Objectivity

In their analysis of the company's compliance, the auditor should be impartial. This implies that the auditor should not be swayed by personal preconceptions or objectives. The assessment procedure provides an opportunity for a third party to judge and improve your procedures, as well as help you keep and achieve compliance with laws. It also, if done correctly, offers you a sounding board to air your program's shortcomings and suggest improvements, giving you a new perspective in general.

• Knowledge

The auditor should be familiar with Singapore's legal and regulatory requirements. This will ensure that the auditor is able to identify compliance risks and implement adequate controls. Prior to the formal compliance audits, we recommend that you forward the auditor a copy of the work practices and training programs that will be covered. This allows the auditor to review procedures, ensure that training covers necessary focus points, and get an overview of work practices. It also gives them time to develop any initial questions they may have so they can be addressed before coming on-site.

• Communication

The auditor should be able to communicate effectively with the company's management. This is critical in order to acquire an accurate picture of the company's compliance concerns and how to reduce them. This allows for an honest and open exchange of information without managers or supervisors around, so crews can voice their concerns or ideas freely. The assessment staff can explain what the experience is meant to achieve without worrying about retribution.

How to Find a Compliance Assessment Company

If you are looking for a Singapore-based compliance assessment company or a conformity assessment body (CAB), there are a few things to keep in mind. First, make sure that the company is accredited by the Singapore Accreditation Council (SAC). This ensures that the firm has a good reputation and is able to provide references from past clients.

CABs that are accredited by the SAC will carry one of the SAC accreditation marks. Reports or certificates issued by these CABs will have the SAC mark and corresponding accreditation number.

Additionally, it is important to find a company that has experience with the type of assessment you need. For example, if you are looking for an energy audit, make sure to find a company that specialises in energy audits. Finally, be sure to get quotes from multiple companies so that you can compare prices and services.

Complying with Singapore regulations is essential for companies, though it can be tough to manage without the right resources and people. To make sure your company is staying within the legal limits, consider getting a compliance audit. This process examines how well your firm adheres to Singapore's rules and restrictions.

Browse our recommended compliance audit firms in Singapore if you need an external auditing process.