Singapore toughens financial statement scrutiny
More companies in Singapore are to have their financial statements come under closer scrutiny following a deal between the country’s regulator and accontancy trade body.
Oversight of statements by Singapore's Accounting and Corporate Regulatory Authority (ACRA) will be tougher thanks to a tie-up with the Institute of Singapore Chartered Accountants (ISCA).
It will allow ACRA to expand the scope of its financial reporting surveillance programme. Under the deal ISCA will share its views on potential non-compliance in financial statements, which will allow ACRA to take enforcement action against directors under the Companies Act, if necessary.
Mr Kenneth Yap, chief executive of ACRA, commented: “While we have a robust system in place to oversee the work of auditors, the duty to provide reliable financial reports lies ultimately with directors. This duty can be more meaningfully enforced if we combine efforts with ISCA to pro-actively monitor a broader scope of financial statements, giving investors greater confidence in financial information received from companies.”
The stepping up of ACRA’s financial reporting surveillance programme is part of the regulator’s strategic plans to further strengthen the quality of financial reporting in Singapore, as first announced at its Public Accountants Conference in August 2013.
Mr Yap went on to say that the collaboration involves tapping ISCA’s expertise and experience in reviewing financial statements in order to avoid duplication.
Indeed the regulator will have acces to ISCA’s Financial Statements Review Committee, which currently reviews financial statements as part of industry self-regulation efforts. The members of this body comprise some 30 senior experienced practitioners from the accountancy sector.
Dr Ernest Kan, ISCA president, believes it is important to reach out to directors of companies. “By having a better understanding of their role in the financial reporting process, and in working collaboratively with the auditors, benefits such as improved levels of corporate governance and stakeholder confidence could be reaped,” he said.