In a dynamic and ever-evolving business landscape, the decisions made by international companies to establish their presence in a foreign market can significantly impact their global operations. One of the key aspects of setting up a company in Singapore is the mandatory audit process. Many business owners who are not familiar with the Singapore law find themselves in a difficult position when it comes to choosing the right auditor and what steps they need to take.
Today, we have the privilege of gaining insights from a seasoned company audit expert, Mr. Zhao, the founder of Dexin Assurance, a prominent audit firm. He has written a book: Audit Insights: Mastering Audits for International Companies in Singapore, where he has shared his experiences and key pointers for companies who need their company to be audited to take note. With his wealth of experience, Mr. Zhao sheds light on the current market conditions in Singapore and how they influence international companies’ strategic choices.
Mr. Zhao’s Experience and Expertise:
Mr. Zhao, the founder of Dexin Assurance, an Audit and Assurance firm led by a team of experienced Singapore Chartered Accountants, specializes in high-quality audit and assurance services for clients in various industries, both in Singapore and overseas. The founder, Mr. Zhao, brings over 20 years of audit expertise, overseeing the firm’s operations and providing technical support. The firm is also an accredited training organization, offering accounting training programs and materials for aspiring graduates. He provides valuable insights into the intricacies of the Singapore market and the challenges faced by international companies operating in this environment.
Question:
Can you share some insights into the current market conditions in Singapore and how they impact the decisions of international companies to establish their presence here?
Answer:
I think in the current market, Singapore is like a safe haven for a lot of companies. Its low taxes, safety, and work environment make it a magnet for many companies to use it as their hub for Southeast Asia. That’s why you can see a lot of Chinese businessmen. They rushed to Singapore during these two years. I mean, a lot of this China family office was set up during these two years after the pandemic. And Singapore was forced to raise the threshold of setting up a single-family office to 20 million SGD in 2023. It used to be 5 million SGD two years ago. But there are too many applicants in these two years.
Can you explain the key steps involved in conducting a comprehensive audit for an international company operating in Singapore?
There are a lot of international companies in Singapore and they are very similar. They only have a simple trading company here, maybe just a few staff or a marketing director in Singapore. The difference compared to a local company is that for international companies, most of the time the audit is done on a remote basis, whereby the client sends us the accounts and the supporting documents by email, Dropbox, Google Drive, or WhatsApp. These are remote or virtual storage. So our staff will do the audit based on the electronic documents provided and liaise with the clients via WhatsApp. We don’t see each other. And when we’re doing the audit, sometimes we don’t even need to go to the client’s place. And the audit is done.
How does your firm assist international companies in ensuring compliance with local and international regulations, especially in a complex regulatory environment like Singapore?
Our job is to make sure that the client’s financial statements comply with Singapore’s Companies Act and financial reporting standards because we are issuing a Singapore audit report, and we are governed by Singapore’s ACRA. But sometimes the accounts are done by the client internally; for example, we have some UK clients. The accounts were done in the UK by the UK accountant and sent to us for audit in Singapore. So we helped the client to pass in some audit adjustments so that the accounts will comply with Singapore standards. And then, we send the revised financial statements for the client to review. For tax compliance, there’s this transfer pricing compliance, so we’ll have to inform the client they have to comply with the transfer pricing policies across the whole globe. So, we may recommend some transfer pricing experts to the client, for them to draft the transfer price documentation to comply with the global tax requirement.
Transparency is vital in audit reporting. How does your firm ensure transparency in the audit process, especially when dealing with complex financial structures or multinational operations?
Transparency is not a serious issue for us because we always follow the accountant’s code of conduct to be independent. I mean, my staff or myself, in every audit job, we have to declare independence that we are not related to the client, client’s management or in any way. It is rare but when it happens that one of our audit team is related to the audit client, we may choose to resign as statutory auditors.
Can you provide examples of challenges unique to certain industries and how your firm tailors its audit approach to address these challenges?
I think number one is the audit fee. Some new auditors tend to use this low-fee strategy to attract customers first. But later on, they’re going to increase the fee. The audit fee is subject to change as mentioned in our quotation, that the proposed fees are estimated based on our understanding of the level of activities and complexity of the transactions of your Company, and are charged on a time-cost basis. Where the actual time cost incurred deviates substantially from the above estimate, we will advise you of any fee adjustment accordingly.
Some auditors agreed to a $5,000 audit fee on a construction contract audit. But after they get the job, they realize the work to be done is much more than they initially expected. So they may end up charging a higher fee. And the audit may be delayed because the workload is much more than expected. In the worst case, they may not be able to issue the report because the technical requirement of the work is beyond their capacity. This happened before. This may bring about serious consequences, for e.g. the client may lose a tender because they cannot produce an audit report on time.
So are there any emerging trends or innovations in the field of audits for the companies you should be aware of, or how are you adapting to stay ahead of the trends?
Well, there are some automated audit software in the market nowadays. But we don’t see the need at this moment yet. We find Microsoft Office served our audit needs well. We are continuing to monitor the situation closely, but we don’t want to adopt something that makes the audit process more difficult. We saw some audit firms adopt the audit software, but it makes the audit process more complex and tedious. So yeah, we’re monitoring the trend now.
So when I’m choosing the auditor, what do you suggest I do? To see if they will be the right people to work with?
You need to talk to the audit partner or manager personally. You need to find out whether they understand your industry or your company. And whether he/she is of the type of personality that you can work with.
Conclusion:
In conclusion, the insights shared by Mr. Zhao, the founder of Dexin, provide invaluable guidance for businesses navigating the intricate landscape of international business in Singapore. Dexin’s commitment to transparency, expertise, and adaptability makes it a strategic choice for companies seeking reliable audit services. For businesses embarking on their international ventures, choosing the right auditing partner is not just a compliance requirement; it’s a pivotal decision that can shape their future success. Dexin’s dedication to understanding industries and delivering exceptional audit services exemplifies the qualities necessary for seamless integration into Singapore’s thriving market.
For further inquiries or to explore Dexin’s comprehensive audit services, please contact us, where you can access our company profile and get in touch with our experienced team.
Dexin Assurance
Phone: +65 6265 2480
Email: [email protected]
Website: Dexin.sg
Address:
110 Middle Road, #07-03A
Chiat Hong Building,
Singapore 188968
Media ContactCompany Name: Dexin AssuranceContact Person: Zhao YangEmail: Send EmailPhone: +65 6265 2480Address:110 Middle Road, #07-03A Chiat Hong Building City: Singapore 188968Country: SingaporeWebsite: Dexin.sg
