Singapore Society Audit Engagement Letter
Singapore Society Audit Engagement Letter
An Audit Engagement Letter for a society incorporated under the Societies Act 1966 in Singapore (adapted from Appendix 1 of SSA 210):
[Date]
To the Management Committee / Those Charged with Governance
[Name of Society]
[Address of Society]
AUDIT ENGAGEMENT LETTER FOR THE AUDIT OF FINANCIAL STATEMENTS FOR THE YEAR ENDED [31 DECEMBER 20XX]
Objective and Scope of the Audit
You have requested that we audit the financial statements of [Name of Society] (the "Society"), which comprise the statement of financial position as at [31 December 20XX], and the statement of comprehensive income, statement of changes in funds, and statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information. We are pleased to confirm our acceptance and our understanding of this audit engagement by means of this letter.
The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Singapore Standards on Auditing (SSAs) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Responsibilities of the Auditor
We will conduct our audit in accordance with SSAs. Those standards require that we comply with ethical requirements. As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Society's internal control. However, we will communicate to you in writing concerning any significant deficiencies in internal control relevant to the audit of the financial statements that we have identified during the audit.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management / the Management Committee.
Conclude on the appropriateness of management's / the Management Committee's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Society's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Society to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Because of the inherent limitations of an audit, together with the inherent limitations of internal control, there is an unavoidable risk that some material misstatements may not be detected, even though the audit is properly planned and performed in accordance with SSAs.
Responsibilities of Management and Those Charged with Governance
Our audit will be conducted on the basis that [management and, where appropriate, the Management Committee / those charged with governance] acknowledge and understand that they have responsibility:
For the preparation of financial statements that give a true and fair view in accordance with the provisions of the Societies Act 1966 (the "Act") and [Singapore Financial Reporting Standards (International) / Financial Reporting Standards in Singapore].
For devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.
To provide us with:
Access to all information of which [management / the Management Committee] is aware that is relevant to the preparation of the financial statements, such as records, documentation, and other matters.
Additional information that we may request from [management / the Management Committee] for the purpose of the audit.
Unrestricted access to persons within the Society from whom we determine it necessary to obtain audit evidence.
As part of our audit process, we will request from [management / the Management Committee], written confirmation concerning representations made to us in connection with the audit.
We look forward to full cooperation from your staff during our audit.
Fees and Billing Arrangements
1. Fee Estimate and Basis of Calculation
Our audit fee is based on the degree of responsibility, complexity of the engagement, and the time required by our professionals to complete the work. For the audit of the financial statements for the year ended [31 December 20XX], our professional fee is estimated to be S$[Amount], exclusive of Goods and Services Tax (GST) and out-of-pocket expenses.
2. Out-of-Pocket Expenses
Direct out-of-pocket expenses incurred on your behalf (such as courier charges, travel expenses, regulatory filing fees, and bank confirmation costs) will be billed separately at actual cost.
3. Billing Schedule and Payment Terms
Our invoices will be issued in accordance with the following schedule:
[30%] upon acceptance of this engagement letter.
[50%] upon commencement of the audit fieldwork.
[20%] upon issuance of the draft audit report.
All invoices are due and payable within [30 days] from the date of the invoice. We reserve the right to suspend work or withhold the final audit report if any invoice remains unpaid after the due date.
4. Scope Changes and Additional Work
The fee estimate is based on the assumption that the Society’s financial records are complete, fully reconciled, and supported by necessary schedules, and that key personnel will be available to assist us during the audit. Should we encounter unforeseen complications, significant deficiencies in internal accounting controls, or delay in obtaining requested documents requiring additional work beyond our original scope, we will notify the Management Committee promptly and agree upon additional fees before proceeding with such work.
Specific Engagement Terms
1. Assistance from Society Personnel
Management and the Management Committee will ensure that appropriate members of staff are made available to prepare schedules, locate documents, and answer queries from our audit team in a timely manner. A detailed Audit Requirements List (PBC List) will be provided prior to the commencement of fieldwork.
2. Electronic Communications and Data Protection
During the engagement, we may communicate via email or electronic file-sharing platforms. While we employ standard technical measures to secure data transmission, electronic communications carry inherent risks of data corruption or unauthorized intercept. Both parties agree to comply with the Personal Data Protection Act 2012 (PDPA) regarding the collection, use, and disclosure of personal data provided during the audit.
3. Limitation of Liability
Our total liability to the Society in respect of any claim arising out of or in connection with this engagement, whether in contract, tort (including negligence), or otherwise, shall be limited to an amount equal to [e.g., three times the total audit fees paid] under this agreement.
4. Statutory and Regulatory Disclosures
Under relevant laws, regulations, and professional ethical guidelines, we may be required to report certain identified or suspected non-compliance with laws and regulations (NOCLAR) or illegal acts directly to relevant regulatory bodies or authorities.
5. Governing Law and Jurisdiction
This engagement letter shall be governed by and construed in accordance with the laws of the Republic of Singapore. Any disputes arising out of or in connection with this engagement shall be submitted to the exclusive jurisdiction of the Courts of Singapore.
Reporting
Expected Form and Content of the Auditor’s Report
Forming part of our engagement, we will issue an independent auditor’s report addressed to the Members of [Name of Society] on the financial statements for the year ended [31 December 20XX]. The report will state whether, in our opinion:
The financial statements give a true and fair view of the financial position of the Society as at [31 December 20XX] and of its financial performance, changes in funds, and cash flows for the year then ended in accordance with [Singapore Financial Reporting Standards (International) / Financial Reporting Standards in Singapore].
The accounting and other records required by the Societies Act 1966 (the "Act") to be kept by the Society have been properly kept in accordance with the provisions of the Act.
Auditor's Responsibilities Relating to Other Information under SSA 720 (Revised)
Management / the Management Committee is responsible for the Other Information included in the Society’s Annual Report. The Other Information comprises information included in the Annual Report (e.g., the Management Committee’s Report, President’s Statement, or Operational Review), but does not include the audited financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the Other Information, and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility under SSA 720 (Revised) is to read the Other Information and, in doing so, consider whether the Other Information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
To enable us to fulfill our responsibilities:
Management / the Management Committee agrees to make available to us the final draft of the Annual Report (containing the Other Information) in a timely manner and, if possible, prior to the date of our auditor’s report.
If any portion of the Other Information will not be available prior to the date of the auditor's report, Management / the Management Committee will provide a written representation that the final version of such document(s) will be provided to us when available, and prior to its issuance by the Society, to allow us to complete our required audit procedures.
When we read the Other Information, if we conclude that a material misstatement of the Other Information exists prior to issuing our report, we are required to communicate the matter to those charged with governance and request that it be corrected. In accordance with SSA 720 (Revised), our auditor’s report will include a dedicated "Other Information" section describing Management's responsibilities and our audit responsibilities regarding such information.
Unavoidable Circumstances Affecting the Report
The form and content of our auditor's report may need to be modified or amended in light of our audit findings—for example, if we are unable to obtain sufficient appropriate audit evidence or if we identify a material misstatement in the financial statements.
The form and content of our report may need to be amended in the light of our audit findings.
Please sign and return the attached copy of this letter to indicate your acknowledgement of, and agreement with, the arrangements for our audit of the financial statements, including our respective responsibilities.
Bestar Assurance PAC
Public Accountants and Chartered Accountants
Acknowledged and agreed on behalf of [Name of Society] by:
(Signed)
Name:
Title: [e.g., President / Treasurer]
Date:
How Bestar Singapore Empowers Societies with Comprehensive Society Audit & Governance Services
Bestar Singapore provides specialized audit, assurance, and compliance services tailored specifically to societies registered under the Societies Act 1966 in Singapore. Under Singapore regulations, societies with gross income or expenditure exceeding S$500,000 in a financial year are statutorily required to have their accounts audited by a qualified public accountant. Bestar helps non-profits, trade associations, and social clubs navigate complex Singapore Financial Reporting Standards (International) / Financial Reporting Standards in Singapore (SFRS / SFRS(I)), evaluate internal financial controls, manage ROS (Registry of Societies) filings, and uphold institutional transparency.
Key Highlights & Quick Key-Takeaways
Statutory Requirement: Any Singapore society with annual revenue or expenditure over S$500,000 must engage a licensed auditor.
Framework Expertise: Bestar performs audits compliant with Singapore Standards on Auditing (SSAs) and statutory frameworks (SFRS / SFRS(I)).
Governance & Internal Control: Bestar evaluates fund accounting, donation tracking, and internal approval matrices to mitigate fraud and compliance risks.
Turnkey Compliance: Beyond financial audits, Bestar assists with ROS Annual Returns, tax filings (IRAS), and IPC (Institutions of a Public Character) compliance requirements.
What is a Society Audit in Singapore and Why is It Required?
A Society Audit is an independent examination of the financial statements of an organization registered under the Registry of Societies (ROS) pursuant to the Societies Act 1966.
The Statutory Threshold (S$500,000 Rule)
According to Singapore regulations, a society’s auditing requirements depend on its annual financial turnover:
Gross Income/Expenditure > S$500,000: The society must appoint a approved Public Accountant/Audit Firm in Singapore to audit its statement of accounts annually.
Gross Income/Expenditure ≤ S$500,000: The accounts may be audited by an internal auditor appointed by the society or a qualified accountant, depending on the society’s specific constitution.
┌────────────────────────────────────────────────────────┐
│ Singapore Society Audit Threshold │
├───────────────────────────────┬────────────────────────┤
│ Annual Income / Expenditure │ Audit Requirement │
├───────────────────────────────┼────────────────────────┤
│ Exceeds S$500,000 │ Mandatory Public Audit │
│ S$500,000 or lower │ Internal Audit / Opt. │
└───────────────────────────────┴────────────────────────┘
How Bestar Singapore Delivers Value in Society Audits
Bestar Singapore brings deep technical competency, market experience, and streamlined methodologies to non-profit organizations, trade groups, and social societies across Singapore.
1. Independent Financial Statement Audits (SSAs & SFRS Compliance)
Bestar conducts audits in strict adherence to Singapore Standards on Auditing (SSAs). Their team evaluates whether financial statements present a true and fair view of the society’s financial position, performance, changes in funds, and cash flows in accordance with SFRS or SFRS(I).
2. Fund Accounting & Donor Transparency
Unlike standard commercial entities, societies often deal with restricted funds, grants, membership subscriptions, and designated donations. Bestar verifies:
Proper segregation of Restricted Funds vs. Unrestricted General Funds.
Compliance with grant conditions from government bodies (e.g., MCCY, NCSS).
Proper documentation and internal control over physical/digital cash collection.
3. Review of Internal Accounting Controls
In accordance with SSA 210, management and the governing committee are responsible for maintaining internal accounting controls sufficient to safeguard assets against loss or unauthorized disposition. Bestar reviews control environments, identifies control deficiencies, and provides actionable recommendation letters to strengthen internal processes.
4. ROS Annual Return & Statutory Filing Support
Audited financial statements must be submitted alongside the society's Annual Return to the Registry of Societies (ROS) via the ROS portal. Bestar ensures all statements, audit opinions, and disclosures meet statutory formats to prevent filing delays or penalties.
Comparison: Commercial Statutory Audit vs. Society Audit
Key Feature | Commercial Company Audit | Society Audit (ROS) |
|---|---|---|
Governing Legislation | Companies Act 1967 | Societies Act 1966 |
Regulatory Body | ACRA | Registry of Societies (ROS) / MCCY |
Primary Statutory Threshold | Small entity exemption criteria (Revenue/Assets ≤ S$10M, Employees ≤ 50) | Gross Income or Expenditure > S$500,000 |
Equity Structure | Share Capital & Retained Earnings | Accumulated General / Restricted Funds |
Primary Governance | Board of Directors | Executive Management Committee / Board of Trustees |
Frequently Asked Questions
Who can audit a society in Singapore?
A society with gross annual income or expenditure exceeding S$500,000 must engage an approved Public Accountant or Audit Firm registered in Singapore, such as Bestar Singapore.
What happens if a society fails to submit audited accounts to ROS?
Failing to submit audited statements or annual returns to the Registry of Societies constitutes an offense under the Societies Act 1966. It can lead to fines, enforcement actions, or statutory deregistrations.
Does a society need an engagement letter prior to an audit?
Yes. Under SSA 210 (Agreeing the Terms of Audit Engagements), the auditor and the society's Management Committee must execute an Audit Engagement Letter defining the scope, responsibilities, reporting framework, and fee arrangements before audit work commences.
What accounting standards apply to societies in Singapore?
Societies in Singapore typically prepare general purpose financial statements under Singapore Financial Reporting Standards (International) [SFRS(I)] or Financial Reporting Standards in Singapore (FRS).
Why Choose Bestar Singapore for Your Society's Audit?
Deep Non-Profit Sector Experience: Proven track record with societies, voluntary welfare organizations (VWOs), and member associations.
Cost-Effective & Transparent Pricing: Clear fee arrangements with no hidden charges, tailored to non-profit operational budgets.
End-to-End Governance Solutions: Bestar provides integrated support spanning corporate secretarial, tax advisory, bookkeeping, and audit services.
Take Action Today
Ensure your society remains fully compliant with the Societies Act 1966 and Registry of Societies regulations. Contact Bestar Singapore today to get a quote and schedule your audit engagement:
Website: www.bestar-sg.com
Email: admin@bestar-asia.com
Phone: +65 6299 4730 / +65 8836 4489
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