Raising the Quality of Audits and Financial Reporting in Singapore

Audit plays a crucial role in raising the quality and reliability of a company’s financial disclosure to investors. Appointing the right auditor who can act as an effective and independent gatekeeper is crucial to protecting the interests of investors.

Audit Committees (AC) play a key role in evaluating and selecting the right auditor for listed companies. There is however limited information available for ACs to measure and evaluate the quality of an audit. Thus, differentiating and selecting the audit firm best suited to the size and complexity of a company can be a difficult task.

In October 2015, ACRA introduced an Audit Quality Indicators (AQIs) Disclosure Framework to help ACs of listed companies better evaluate and select the right auditor. The AQI Disclosure Framework comprises comparable quality markers that correlate closely with audit quality. In August 2016, to further enhance the use of AQIs, ACRA introduced six targets on selected AQIs to provide ACs with a common yardstick for comparison and to facilitate meaningful audit quality conversations with the auditors.

As part of ongoing efforts to raise audit quality, ACRA regularly monitors the effectiveness of the AQI Disclosure Framework and its relevance to ACs. Following a detailed review which included extensive consultations with audit firms and ACs, ACRA has revised the AQI Disclosure Framework, taking into account feedback from audit firms and ACs, to ensure that the indicators can better meet the needs of the ACs. The revised Framework and changes are summarised below:

1. Revisions to the ACRA’s AQIs Disclosure Framework

Original AQIs in Framework  What has changed?    Revised AQIs
 Audit hours – Time spent by senior team members To include breakdown of hours incurred by the audit engagement team by grade and by the various audit phases (e.g. planning, fieldwork and completion)


Rationale: To track achievement of milestones and to assess the timeliness of auditor involvement

Audit hours – Involvement of audit team members during each audit phase
 Quality Control – Headcount of partners and managers in quality control functions

To include total headcount of quality control personnel and to present in relative terms as a ratio of total audit staff headcount


 Quality Control – Headcount of partners, managers and professional staff in quality control functions and comparison vis-à-vis audit staff strength
 Independence – Compliance with independence requirements  

Removed from framework


Rationale: Firms are already declaring their independence to their audit clients under the relevant professional standards (e.g. ACRA's Code of Professional Conduct and Ethics)

 Training – Average training hours and industry specific training No change
 Inspections – Results of External and Internal Inspections  No change
 Staff oversight – Staff per partner / manager ratios  No change
 Experience – Years of audit experience and industry specialisation  No change
 Attrition rate – Degree of personnel losses  No change
2. Disclosure of industry average and range for relevant AQIs

In place of the AQI targets introduced in 2016, ACRA will instead provide relevant information on industry average and range for the audit firms in the listed companies segment (categorised by Big 4 and non-Big 4 firms), to better facilitate industry comparison: 


Industry information

Staff oversight – Staff per partner / manager ratio

Partner to Audit professional staff and Manager leverage ratio

Manager to Audit professional staff leverage ratio

Experience – Years of audit experience and industry specialisation

Average years of experience (by grade)

Attrition rate – Degree of personnel losses

Staff attrition rate (overall)


The industry information will be updated every half-yearly and annually, and published on the ACRA website as follows:

Duration Published on ACRA website 
 6 months period ending 31 Mar  30 Jun
 12 months period ending 30 Sep  31 Dec
Please click here  (PDF, 171KB) for the latest industry information.

The revised AQI Disclosure Framework is available for voluntary adoption by audit firms for audits of financial statements of listed entities in Singapore for periods ending on or after 31 March 2020. Audit firms are encouraged to adopt the revised AQI Disclosure Framework early, and to share the AQI data with the ACs so as to ensure meaningful analysis and discussion.


Guidance for Audit Committees

Guidance to audit committees on ACRA's Revised AQI Disclosure Framework (PDF, 388KB) & Sample presentation format for ACRA's Revised AQI Disclosure Framework (PDF, 166KB) – Information to help ACs with practical application of the AQIs and how each AQI should be interpreted. 

Guidance for Audit Firms

Guidance to audit firms on ACRA's Revised AQI Disclosure Framework (PDF, 302KB) – Information to help audit firms in computing and preparing their AQI data to ensure consistency and comparability

Past Resources

Press Release


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