Audit Services

Overview

Our mission is to help businesses enhance financial transparency, strengthen management efficiency, and ensure compliance with Singapore Financial Reporting Standards (SFRS) and local regulatory requirements. Our audit services cover all types of company structures—from SMEs to multinational groups—delivering forward-looking and compliant professional support.

We have extensive experience serving clients in:
Trading, Shipping & Logistics, Investment Holding, Real Estate Development, Variable Capital Companies (VCCs), Fund Management, and Family Offices.

Mandatory auditing based on the Companies Act

The Company Law primarily focuses on protecting the interests of creditors and shareholders. According to the law, non-listed companies that meet the statutory thresholds for “Large Company” must undergo an annual statutory financial audit. A company is considered a Large Company if it meets either of the following conditions:

Its paid-in capital at the time of incorporation or after a capital increase reaches or exceeds 500 million yen.
Its total liabilities on its balance sheet at the end of the fiscal year reach or exceed 20 billion yen (assessed on a standalone basis).

Furthermore, even if the above financial thresholds are not met, if the company adopts a specific corporate governance structure (such as establishing a nomination committee or an audit and oversight committee), it must undergo a statutory audit.

Mandatory audit based on the Financial Instruments and Exchange Act (FIEA)

The core purpose of the Financial Instruments and Exchange Act is to protect investors, and therefore it primarily targets companies with public responsibility. Companies subject to this law and required to undergo rigorous audits include:

All listed companies on stock exchanges (such as the Tokyo Stock Exchange).
Companies applying for listing, companies that have submitted securities registration statements, and non-listed public companies with a certain number of shareholders.

These companies face more stringent scrutiny, requiring not only annual financial statement audits but also mandatory quarterly financial statement reviews and internal control audits of financial reporting (similar to the requirements of the Sarbanes-Oxley Act in the United States).

Audit Exemptions and Industry-Specific Requirements for Small and Medium Enterprises (SMEs)

Small and Medium-sized Enterprises (SMEs) Exemption: Generally, SMEs that do not meet the aforementioned “large company” criteria and are not publicly listed are exempt from statutory audit obligations. However, Japanese SMEs that are subsidiaries of multinational corporations often choose to undergo voluntary audits to comply with the consolidated financial statement requirements of their overseas parent companies or to improve operational transparency.
Specific Industries: Even if not publicly listed or large companies, certain entities involved in public interest (such as large non-listed financial institutions, medical corporations, social welfare organizations, and government-subsidized educational institutions) are subject to specific regulations and must undergo statutory audits.

Audit Practice and Standards

In Japan, all statutory audits must be performed by qualified independent certified public accountants (CPAs) or formal auditing firms. The audit process must strictly adhere to the Japanese Generally Accepted Auditing Standards (J-GAAS) issued by the Business Accounting Council of Japan (BAC).

Why Choose MSMC ASIA

Deep understanding of Southeast Asia’s regulatory environment
ACRA-registered professional accountants
Comprehensive knowledge of Companies Act amendments and SFRS
One-stop professional services: Audit, Tax, Accounting, Legal
Dedicated to compliance and growth for Chinese and regional enterprises
Proven expertise across Trading, Shipping, Investment, Real Estate Development, and VCC structures

Kindly contact us to explore tax planning solutions designed to support your business goals.

MSMC ASIA

#19-06 160 Robinson Rd, SBF Center, Singapore 068914