Audit Adjustment Study and Survey to Evaluate the Effectiveness of the Finance Function

12 January 2021

1. ACRA is commissioning a second study on proposed audit adjustments to the financial statements of listed companies in Singapore. In addition to the study, the study team will also gather inputs from audit committee chairs and chief financial controllers on their assessments of the effectiveness of their finance functions. The study will help ACRA gather insights into the common audit adjustments and highlight potential areas of improvement in the financial reporting value chain in Singapore.

Background 

2.  In 2014, ACRA commissioned the inaugural study titled “Audit Adjustments Matter: Upholding Financial Reporting Quality” (PDF, 3.62MB).  The study, the first of its kind in the world, provided useful insights into the nature and extent of proposed audit adjustments to the financial statements of Singapore’s listed companies. The study also reaffirmed the value of audits in our financial reporting eco system. 

Audit Adjustment Study 2021 

3.  This year, ACRA is commissioning a study team comprising Assoc Prof Themin Suwardy (Singapore Management University), Dr Lim Chu Yeong (Nanyang Technological University) and Assoc Prof Kevin Ow Yong (Singapore Institute of Technology) to conduct a second study, following the 2014 study.  

4. In addition to gathering detailed audit adjustments data, the study will examine the correlation between audit adjustment(s) and the effectiveness of the finance function as viewed by audit committee chairs and chief financial controllers. The latter is done in the form of a survey based on an assessment tool published by the International Federation of Accountants (IFAC)¹.  The survey will be conducted securely on a web-based platform. 

5. The following audit firms will participate in the study, and will be reaching out to the audit committee chairs and chief financial controllers of their listed audit clients in the first quarter of 2021 to complete the survey:

• Baker Tilly TFW LLP

• BDO LLP

• Crowe Horwath First Trust LLP

• Deloitte & Touche LLP

• Ernst & Young LLP

• Foo Kon Tan LLP

• KPMG LLP

• Mazars LLP

• Moore Stephens LLP

• Nexia TS Public Accounting Corporation

• PricewaterhouseCoopers LLP

• RSM Chio Lim LLP

• RT LLP

6. ACRA is grateful for the support of the participating audit firms and would encourage the audit committee chairs and chief financial controllers of their listed clients to complete the survey. Given the importance of finance functions in the overall financial reporting value chain, inputs to the survey from a financial statement preparer’s perspective would also provide deeper and more comprehensive insights to the study. All responses to the study and survey will be kept strictly confidential. 

7. We thank all the audit firms as well as the audit committee chairs and chief financial controllers of their listed companies in advance, for your cooperation and participation in this study to improve the financial reporting landscape in Singapore.

¹ https://www.ifac.org/knowledge-gateway/preparing-future-ready-professionals/publications/evaluating-finance-function