Part 6: Compliance & Operations
Chapter 2
Accounting Requirements Compared
دليل 2 min read
Accounting standards: the basics
Every company must maintain accounting records. The question is: to what standard, how complex, and does a third party (auditor) need to review them?
The two main global accounting frameworks:
- IFRS (International Financial Reporting Standards): Used in the EU, UK, Singapore, Australia, Hong Kong, and many others. Developed by the IASB.
- US GAAP (Generally Accepted Accounting Principles): Used for US entities. More prescriptive than IFRS in some areas.
Most small private companies can use simplified or modified accounting standards:
- UK: FRS 102 Section 1A (small companies) or FRS 105 (micro-entities) — significantly simpler than full IFRS
- Ireland: FRS 102 Section 1A — similar to UK
- Singapore: SFRS for Small Entities — simplified SFRS for smaller companies
- Germany: HGB (Handelsgesetzbuch / German Commercial Code) — separate from IFRS; more conservative
Audit requirements by jurisdiction
Audit requirements depend on company size. Most countries exempt small companies from mandatory audit.
| Jurisdiction | Audit threshold |
|---|---|
| UK | Two of: turnover ≤£10.2M, balance sheet ≤£5.1M, employees ≤50 |
| Ireland | Two of: turnover ≤€12M, balance sheet ≤€6M, employees ≤50 |
| Germany | Two of: revenue ≤€12M, balance sheet ≤€6M, employees ≤50 (for small GmbH) |
| Singapore | Two of: revenue ≤SGD 10M, assets ≤SGD 10M, employees ≤50 |
| Hong Kong | Small companies (turnover <HKD 100M, not a holding/subsidiary) — audit still required for all incorporated companies; "small company" simplified audit |
| Australia | Small proprietary companies (two of: revenue <AUD 50M, assets <AUD 25M, employees <100) generally audit-exempt unless: shareholder request, ASIC direction, or foreign-controlled |
| Estonia | Audit required if two of: net revenue >€4M, balance sheet total >€2M, employees >50; review engagement required at lower threshold |
| UAE | DMCC, DIFC, and ADGM require audit for companies above certain thresholds; other free zones vary |
Practical accounting setup for international founders
For a solo digital business (UK Ltd, US LLC, Georgian LLC):
- Use cloud accounting software: Xero, QuickBooks, FreeAgent, or Wave
- Integrate with your bank account for automatic transaction import
- Reconcile monthly (not at year end — annual reconciliation is a nightmare)
- Find a qualified accountant who specialises in your jurisdiction
- Budget for quarterly or annual meetings with your accountant
For a UAE free zone company:
- UAE does not have mandatory audit for most free zones below certain thresholds
- Corporate Tax requires financial statements that determine taxable income
- An annual engagement with a UAE-based accountant or auditor is standard
- Many free zones have preferred accountant lists
For a Singapore Pte Ltd:
- Use a licensed corporate secretary to handle ACRA filings
- Xero or QuickBooks for bookkeeping
- Annual accounts must comply with SFRS — work with a Singapore-based accountant
- Estimated Chargeable Income (ECI) filing within 3 months of FYE — your accountant prepares this
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This content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.