Change in Auditor

Change in Auditor | Bestar

Auditor Appointment Request

Change in Auditor

Change of Auditor in Singapore

A change of auditor in Singapore typically involves the following steps:

1. Directorial Decision: The directors of the company decide to change auditors, usually due to factors like cost, service quality, or a change in the company's needs.

2. Shareholders' Approval: The change of auditor requires the approval of shareholders through a special resolution at a general meeting. This typically requires a 75% majority vote.

3. Appointment of New Auditor: At the same shareholders' meeting or a subsequent meeting, the company appoints a new auditor through a special resolution.

4. Communication with Auditors: The company formally notifies both the outgoing and incoming auditors of the change.

5. Predecessor-Successor Communication: The incoming auditor typically contacts the outgoing auditor to inquire about any matters that may be relevant to the audit engagement.

6. ACRA Notification: The company must notify the Accounting and Corporate Regulatory Authority (ACRA) of the change of auditor within 14 days of the appointment of the new auditor.

Key Considerations:

• Special Notice: Shareholders must be given at least 28 days' notice of the resolution to remove the auditor.

• Auditor's Representation: The outgoing auditor has the right to submit a representation to the shareholders regarding the change of auditor.

• Compliance with Regulations: The entire process must comply with the requirements of the Companies Act and other relevant regulations in Singapore.

Importance of a Smooth Transition:

• Continuity: A smooth transition between auditors is crucial for maintaining the integrity of the audit process.

• Transparency: Open communication between the company, outgoing auditor, and incoming auditor enhances transparency.

• Minimizing Disruptions: A well-managed change of auditor minimizes disruptions to the company's financial reporting and operations.

Further Considerations for Change of Auditor in Singapore

• Reasons for Change: Companies may change auditors for various reasons, including:

  • Cost: Seeking a more cost-effective audit solution.

  • Service Quality: Dissatisfaction with the current auditor's service quality or responsiveness.

  • Industry Specialization: Needing an auditor with specific industry expertise.

  • Change in Company Needs: The company's business needs may have evolved, requiring a different type of audit service.

  • Auditor Resignation: The current auditor may resign due to various reasons, such as retirement or a conflict of interest.

• Communication with Shareholders: When proposing a change of auditor, it's essential to communicate clearly and transparently with shareholders. This typically involves:

  • Disclosure of Reasons: Disclosing the reasons for the change of auditor in the notice of the shareholders' meeting.

  • Providing Information on the New Auditor: Providing shareholders with information about the proposed new auditor, such as their experience, qualifications, and reputation.

  • Addressing Concerns: Addressing any concerns raised by shareholders regarding the change of auditor.

• Role of the Audit Committee: If the company has an audit committee, it plays a crucial role in evaluating the performance of the current auditor and recommending a change of auditor if necessary.

• Impact on Financial Reporting: A change of auditor can have an impact on the company's financial reporting process. It's important to plan and coordinate the transition carefully to minimize disruptions.

• Regulatory Considerations: Companies must ensure that the change of auditor process complies with all relevant regulations, including the Companies Act and any applicable Singapore Exchange (SGX) rules.

By carefully considering these factors and adhering to the relevant regulations, companies can ensure a smooth and efficient change of auditor process.

How Bestar can Help

Bestar can provide invaluable assistance during a change of auditor in Singapore. Here's how:

• Navigating Legal Requirements: We can ensure compliance with all relevant provisions of the Companies Act, SGX rules, and other applicable regulations.

• Drafting Legal Documents: We can draft necessary legal documents, such as:

  • Shareholders' resolutions: For appointing and removing auditors.

  • Notices to shareholders: For convening shareholder meetings and informing them about the change of auditor.

• Advising on Corporate Governance: We can advise on corporate governance best practices related to auditor selection and appointment.

• Representing the Company: We can represent the company in any professional matters arising from the change of auditor.

• Financial Reporting Expertise: We can provide guidance on financial reporting matters and ensure a smooth transition in financial reporting processes.

• Selecting Suitable Auditors: We can assist in identifying and evaluating potential auditors based on their experience, expertise, and suitability for the company's specific needs.

• Coordinating with Auditors: We can coordinate with both the outgoing and incoming auditors to ensure a smooth transition of audit files and information.

• Preparing for the Audit: We can assist in preparing the company for the audit by ensuring that all necessary financial records and information are readily available.

• Advising on Accounting Standards: We can advise on the application of relevant accounting standards and ensure compliance with accounting regulations.

By working closely with Bestar, companies can navigate the change of auditor process effectively, minimize disruptions, and ensure compliance with all relevant regulations.