The Ultimate Guide to Non-Profit Audits in Singapore: What You Need to Know

Singapore’s vibrant non-profit sector plays a critical role in serving the community, from charities and volunteer welfare organisations to religious groups and advocacy associations. These entities often receive significant funding from donors, the public, and government bodies, and are expected to uphold the highest standards of accountability and transparency.

A key way to demonstrate this is through regular financial audits. Whether required by law or conducted voluntarily, audits serve as a stamp of credibility and a check on financial health and governance.

In this comprehensive guide, we’ll walk you through everything you need to know about non-profit audits in Singapore—including who needs one, what the audit process involves, and how to get your organisation audit-ready.

1. What is a Non-Profit Audit?

A non-profit audit is an independent examination of an organisation’s financial statements and related operations. It is conducted by a qualified public accountant, usually from a licensed audit firm, to ensure the financial statements are:

• Accurate and complete

• Prepared in accordance with applicable accounting standards

• Reflective of the organisation’s true financial position

Beyond compliance, audits can uncover issues in financial management, internal controls, and reporting practices—making them a valuable tool for continuous improvement.

2. Do All Non-Profits in Singapore Need an Audit?

Not all non-profits are legally required to undergo an audit. However, several categories of organisations must meet audit obligations under Singapore regulations. Let’s break them down:

a. Charities

Under the Charities Act, charities with:

• Gross annual receipts or total expenditure exceeding SGD 500,000 must submit audited financial statements.

• Charities below that threshold can submit unaudited financial statements, but many opt for audits to enhance credibility.

b. Institutions of a Public Character (IPCs)

IPCs—which are charities approved to receive tax-deductible donations—must submit audited accounts regardless of income level, as stipulated by the Commissioner of Charities (COC).

c. Societies

Societies registered under the Societies Act may be required to submit audited financial statements, depending on their constitution or by-laws. If your society collects large membership dues or receives public donations, it is generally advisable to conduct audits.

d. Companies Limited by Guarantee (CLGs)

Many non-profits are incorporated as CLGs under ACRA. If they are exempt private companies with annual revenue of SGD 10 million or more, they are required to have their accounts audited.

3. Why Are Audits Important for Non-Profits?

There are several compelling reasons for conducting regular audits:

✅ Demonstrates Financial Transparency

Donors and stakeholders want assurance that funds are being used responsibly. An audit signals transparency and fiscal integrity.

✅ Enhances Donor and Grantor Confidence

Most institutional donors and grantors require audited accounts as part of their funding criteria.

✅ Ensures Regulatory Compliance

Helps you stay compliant with the Charities Act, Societies Act, and IPC regulations.

✅ Strengthens Internal Controls

Auditors identify risks, gaps, and inefficiencies in your financial processes and governance structures.

✅ Prepares the Organisation for Growth

Whether you’re expanding services, applying for new grants, or forming partnerships, audited financials help build a strong foundation.

4. The Non-Profit Audit Process: What to Expect

Here’s a step-by-step overview of what typically happens during an audit:

Step 1: Engagement and Planning

Your organisation signs an engagement letter with the audit firm. The auditors will request key documents and plan their scope based on the organisation’s size and complexity.

Step 2: Preliminary Review

The auditors will conduct preliminary checks on your internal controls, accounting policies, and financial procedures.

Step 3: Fieldwork

This is the main audit phase, where auditors examine your books, source documents, bank statements, donation records, and payroll. They may also interview staff and management.

Step 4: Draft Audit Report

The auditors will prepare a draft audit report and discuss any findings or discrepancies with management.

Step 5: Final Audit Report

After resolving any queries, a final audit report is issued. If the auditors are satisfied with your statements, they will issue an unqualified (clean) opinion.

5. Key Areas of Focus During a Non-Profit Audit

Auditors pay particular attention to:

• Donation income and grant receipts: Ensuring these are properly recorded and not overstated.

• Restricted vs. unrestricted funds: Verifying that donor-imposed restrictions are respected.

• Use of funds: Checking if expenditures are aligned with the organisation’s mission and objectives.

• Internal controls: Assessing whether there are checks and balances to prevent fraud or errors.

• Board governance: Evaluating board oversight and management accountability.

6. Tips to Prepare for a Smooth Audit

Here’s how your non-profit can prepare for an efficient and stress-free audit:

✅ Keep records organised year-round
Use proper accounting software and maintain complete documentation for donations, invoices, and payroll.

✅ Know your reporting standards
Charities are expected to follow either the Charities Accounting Standard (CAS) or Singapore Financial Reporting Standards (SFRS), depending on size and complexity.

✅ Reconcile bank accounts regularly
Ensure your bank balances match what’s reported in your accounts.

✅ Segregate duties
Avoid situations where one person handles both cash and recordkeeping—this invites risk.

✅ Communicate with your auditor
Ask questions early and respond promptly to requests for information.

7. Common Audit Findings in Non-Profits

Based on experience, here are common issues auditors find in non-profit audits:

• Missing or incomplete donor documentation

• Poor tracking of restricted funds

• Inadequate internal controls for cash handling

• Lack of documented accounting policies

• Delays in bank reconciliations

• Expense claims with insufficient supporting documents

Identifying and fixing these issues early can improve governance and reduce audit stress.

8. Choosing the Right Audit Firm

Select an audit firm experienced in the non-profit sector. Look for the following:

• Familiarity with CAS and SFRS

• Understanding of charity regulations and IPC requirements

• Ability to provide value-added insights, not just compliance

• Reasonable pricing for small or mid-sized organisations

• Good client communication and responsiveness

A good auditor can be a partner in growth—not just a compliance checker.

Conclusion: Make the Audit Work for You

A non-profit audit, when done right, is more than just a financial check. It’s a strategic exercise that improves accountability, strengthens governance, and builds trust. In Singapore’s highly regulated environment, regular audits are a sign of a well-managed and forward-thinking organisation.

If your non-profit isn’t already conducting audits, it’s time to start thinking long-term. Whether required by regulation or chosen voluntarily, an audit demonstrates to donors, stakeholders, and the public that your organisation is committed to integrity and good governance.

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