To Be a Respected Corporate and Accounting Regulator
The above illustration depicts ACRA's efforts in regulating and ensuring compliance among businesses in order to establish a trusted and respected corporate environment.
High regulatory compliance is crucial in upholding strong public confidence in the corporate regulatory framework and in audit and financial reporting.
Refining Enforcement Strategies for the Benefit of Investors
Since 1 April 2017, ACRA has been working with companies to rectify misstatements by restating the financial statements on a timely basis and communicating these promptly to investors, as part of the Financial Reporting Surveillance Programme.
To boost the quality of financial reporting, ACRA's Financial Reporting Surveillance Programme adopted the "re-statement first" approach at the start of FY2017. The aim is to have companies rectify misstatements on a timely basis and communicate these promptly to investors. A Financial Reporting Practice Guidance highlighting the areas of review focus for the coming year was published on the ACRA website, to guide directors and other financial statements preparers on the risks of misstatements in the financial statements, as well as how to better meet the information needs of investors and other users of financial statements.
Tapping on Digital Means to Raise Compliance
In June 2017, ACRA launched the online version of the Directors Compliance Programme for participants to log on at their convenience for lessons on directors' duties and corporate governance.
To encourage voluntary compliance, the online e-Directors Compliance Programme was launched in June 2017 to allow first-time offenders who have failed to comply with statutory filing requirements under the Companies Act, to go through an online training programme in lieu of prosecution.
New Regulatory Measures to Enhance Corporate Transparency
As part of larger nation-wide efforts to strengthen Singapore's regulatory framework to combat money laundering and the terrorism financing, ACRA introduced the Beneficial Ownership regime that provides greater transparency in the ownership and control of corporate entities.
Register of Controllers
Since 31 May 2017, ACRA requires all companies and Limited Liability Partnerships to maintain beneficial ownership information that has to be made available to public agencies upon request.
Since 31 May 2017, ACRA requires all existing companies and limited liability partnerships to set up a Register of Controllers to maintain beneficial ownership information that must be made available to public agencies upon request. In line with international standards, this aims to establish a reliable and transparent business register that seeks to prevent the misuse of corporate entities for illicit purposes.
Beneficial Ownership Regime Compliance Checks
Ms Janice Poon, Principal Inspector from the ACRA Practice Monitoring Department presented at the ISCA 6th Small and Medium Practices Dialogue on 20 April 2017, to help practitioners better understand and manage the risks in implementing EP 200.
Over 140 inspections were conducted from September 2017 to March 2018, with enforcement actions taken against companies that were non-compliant.
Since February 2017, such compliance checks were also included in the audit inspections on public accountants and public accountants entities.
ACRA also revised the guidelines for Registered Filing Agents in August 2017 to include new obligations on the identification of beneficial owners and strengthening of some customer due diligence measures.
Global Forum on Transparency and Exchange Of Information
ACRA was part of a multi-agency team that participated in the Global Forum on Transparency and Exchange of Information on-site evaluation from 19 to 23 March 2018, during which Singapore was assessed for our adherence to international transparency standards. Singapore was assessed to be compliant with the Global Forum's standard.
Singapore Accountancy and Audit Convention 2017
A record 1,100 participants including accountants, auditors and business leaders joined us at the Singapore Accountancy and Audit Convention 2017 on 3 October 2017.
ACRA held the Singapore Accountancy and Audit Convention (SAAC) on 3 October 2017 with the Institute of Singapore Chartered Accountants and the Singapore Accountancy Commission. The event saw a record turnout of over 1,100 participants comprising accountants, auditors and business leaders.
Raising the Audit Quality Bar
Review of Accountants Act
Guest-of-Honour Ms Indranee Rajah, Senior Minister of State for Law and Finance, announced a review of the Accountants Act to further raise audit quality standards for the accountancy sector.
At the Singapore Accountancy and Audit Convention 2017, Ms Indranee Rajah, Senior Minister of State for Law and Finance, announced that the Ministry of Finance and ACRA will review the Accountants Act to further raise audit quality. One area under consideration is to make firm-level audit inspection a statutory requirement. Public consultations will be held in 2018 to gather feedback on the proposed legislative amendments.
Study on Enhanced Auditor Reporting Standards
At SAAC 2017, ACRA released findings from a study on the annual reports of 180 companies listed on the Singapore Exchange that examined the impact of the first-year implementation of Enhanced Auditor Reporting standards in Singapore. It was revealed that the more insightful auditor's reports had led to greater corporate disclosures. Investors were also using these enhanced reports to identify significant accounting and audit issues. This bodes well for ACRA's on-going efforts to enhance corporate transparency.
The study was a collaboration between ACRA, Association of Chartered Certified Accountants, Institute of Singapore Chartered Accountants and Nanyang Technological University.
Addressing Repeated Audit Deficiencies
The 11th Practice Monitoring Programme Report issued in 2017 found noticeable improvements in audit quality for the segment comprising audit firms auditing non-listed companies.
The latest round of audit inspections by ACRA's Practice Monitoring Programme showed noticeable improvements in audit quality for the segment comprising audit firms auditing non-listed companies. However, some firms in this segment continued to show recurring audit deficiencies. Since 1 April 2017, ACRA has published on its website the names of public accountants who have failed a second or revisit inspection and who have been issued a hot review or restriction order, to deter repeated audit deficiencies and uphold market transparency. It is an extension of the current audit regime which already publishes the names of public accountants whose licenses have been suspended or cancelled for serious audit deficiencies found during ACRA's inspections.
Sharing Promoting High Voluntary Compliance
ACRA Chief Executive Mr Ong Khiaw Hong addressed an audience of over 450 directors of listed companies at the fourth ACRA-SGX-SID Audit Committee Seminar held on 16 January 2018.
ACRA Divisional Director for the Public Accountancy Division, Mr Lee Tze Shiong, provided regulatory updates at the ISCA Quality Assurance Seminar on 22 May 2017.
We continue to reach out to the business community with support from our partners to raise awareness and promote voluntary compliance with our regulatory regimes. On 12 April 2017, ACRA and the Singapore Institute of Directors (SID) conducted a deep dive session for over 60 audit committee members on using Audit Quality Indicators, and on key learning points from ACRA's Financial Reporting Surveillance Programme.
At ISCA's Quality Assurance Seminar held on 22 May 2017, over 300 participants from the public accountancy sector were updated on upcoming audit regulatory initiatives and key observations from the Ethics Pronouncement 200 inspections conducted under ACRA's Practice Monitoring Programme.
ACRA organised the fourth ACRA-SGX-SID Audit Committee Seminar together with the Singapore Exchange (SGX) and SID on 16 January 2018. Using case studies, ACRA and SGX shared with over 450 directors of listed companies on how they could improve the quality of their financial reporting and fulfil their obligations as directors.
Contributing to Better Global Audit Quality
ACRA continues to actively support regional and international efforts to raise global audit quality.
International Forum of Independent Audit Regulators (IFIAR)
ACRA Chief Executive Mr Ong Khiaw Hong hosted Mr Arnold Schilder, International Auditing and Assurance Board Chairman, and Mr James Gunn, International Federation of Accountants Managing Director (29 January 2018) .
ACRA was elected to the IFIAR Board on 7 April 2017 for a four-year term. IFIAR promotes global collaboration and sharing of experience among audit regulators. It actively engages the global leadership of the six largest international networks of audit firms to drive audit quality.
Visits by Foreign Counterparts
Former ACRA Chairman Ms Lim Soo Hoon received Sir Winfried Bischoff, Chairman of the United Kingdom's Financial Reporting Council (19 September 2017).
ACRA shared our audit regulatory experience when hosting foreign delegations, such as the United Kingdom's Financial Reporting Council and the International Auditing and Assurance Board.