Frequently asked questions

Accounting and Book-keeping (FAQ)

Q: Who are responsible for the accuracy of my company’s accounting records?

All directors of the company are responsible for the accuracy of the records, no matter whether they are involved in the operations or not.

Q: What will happen if my accounting records are incomplete?

The auditors will usually qualify the audit report; this means that they will report to the shareholders that the accounting records are incomplete. If the impact of the missing records is material (most records cannot be found), the auditor will state that they cannot express an opinion on whether the accounts presents a true and fair view of the financial position of the company.

As for corporate tax, the IRAS may query the company on why the accounting records are incomplete. In addition, IRAS may discretionarily charge an estimated tax amount on the company in a manner that they see fit.

Q: How long do I have to keep my accounting records?

Under Chapter 50 of the Companies Act, all accounting documents must be retained for not less than 5 years from the end of the financial year in which the transactions or operations to which those records relate are completed.

Q: Can I change the accounting year-end of my company?

Yes, you can change the accounting year-end, but it must be approved and resolved at a director’s meeting.

Q: Must my accounting staff be qualified?

It is not a mandatory requirement for accounting staff to be qualified. However, for established companies, it is a good practice to hire qualified accountants or to engage the service of a professional accounting firm to look after the company’s accounting records, so that both the accounting standards and proper accounting records can be maintained.

Q: If my company’s paid up capital is $100,000, must I maintain this amount in the company’s bank account ?

No, it’s not necessary to maintain the full amount of paid-up capital in the bank.