How much is audit fee in Singapore

How do auditors determine audit fees

Auditors in Singapore consider several factors when determining audit fees:

Client Size and Complexity: Larger companies with more complex financial structures typically require more audit work, leading to higher fees. This complexity can come from factors like having a presence in multiple countries or dealing with specialized industries.
Level of Audit Risk: Companies with a higher risk of fraud or errors require more extensive auditing procedures, which translates to a higher cost.
Auditor Experience and Reputation: Reputable audit firms with a strong track record can command higher fees due to the expertise and quality of service they provide.
Scope of the Audit: The specific procedures performed during the audit will influence the fee. More comprehensive audits involving additional testing or procedures will naturally cost more.
Non-Audit Services: While there are ethical guidelines around auditor independence, some firms may offer non-audit services (e.g., tax consulting) to the client. The fees for these extra services are separate but can influence the overall fee structure.

How do audit firms charge audit fees

Audit firms in Singapore typically follow a few common methods for charging audit fees:

Hourly Rate: This is a straightforward approach where the firm charges a fixed hourly rate for the time spent on your audit. The total fee depends on the number of hours required to complete the audit, which can vary based on factors mentioned previously (company size, complexity, etc.).

Fixed Fee: Some firms may offer fixed fees for audits of companies with a simpler financial structure and predictable workload. This provides certainty about the total cost upfront.

Combination: A hybrid approach combining hourly rates and fixed fees is also common. A base fee might cover standard audit procedures, with additional hourly charges for any unforeseen complexities or additional services requested.

Here are some additional points to consider:

Non-Audit Services: Audit firms may offer additional services beyond the core audit, such as tax preparation or internal audit services. These services are typically charged separately. There are regulations in place to ensure auditor independence, so fees for non-audit services cannot exceed 50% of the total fees paid to the firm.
Engagement Letter: Before the audit begins, a formal engagement letter will be signed by you and the audit firm. This letter outlines the scope of the audit, the fees to be charged, and the payment terms.

It's important to discuss the fee structure with any potential audit firm before making a decision. A reputable firm will be transparent about their fees and be willing to answer your questions.