In order to undertake public sector construction projects, a construction company is required to be registered under the Building and Construction Authority (BCA) Contractors Registration System (CRS). The type of construction-related services that the construction company can perform are then based on the registration categories administered under the BCA CRS. These categories are further divided according to grades, with higher grades allowing a higher tendering limit.
For grades allowing higher tendering limits, under the CRS, audited accounts are required to determine the company’s net worth. Any modification made in the auditor’s report may affect the company’s grade, resulting in a lower tendering limit for the company. In order to better appreciate how a modified auditor’s report arises, it is important to have an understanding of key challenges faced during the audits of construction companies.