ACRA, ISCA sign agreement on financial reporting surveillance

January 17, 2014 Leave a comment

ACRA, ISCA sign agreement on financial reporting surveillance

By Nicole Tan
POSTED: 16 Jan 2014 22:33
More companies will have their financial statements come under closer scrutiny by Singapore’s Accounting and Corporate Regulatory Authority, through a tie-up with the Institute of Singapore Chartered Accountants.

SINGAPORE: More companies will have their financial statements come under closer scrutiny by Singapore’s Accounting and Corporate Regulatory Authority (ACRA), through a tie-up with the Institute of Singapore Chartered Accountants (ISCA).The collaboration will allow ACRA to expand the scope of its financial reporting surveillance programme.

Under the terms of an agreement signed on Thursday, ISCA will share its views on financial statements which do not fully meet the regulator’s standards.

This will allow ACRA to take enforcement action against directors under the Companies Act, if necessary.

ISCA’s Financial Statements Review Committee currently reviews financial statements as part of industry self-regulation efforts.

Josephine Teo, Senior Minister of State for Finance, said: “Presently, ACRA is able to extend its surveillance programme to listed companies that have modified statements, whereas through this partnership, your resources have been strengthened, and the surveillance programme can be extended to firstly non-listed companies, and even those without modified statements, but which are of public interest.”

Besides modified statements, which are those identified to have uncertainties, including non-compliance with accounting standards, the new programme will also selectively cover financial statements that have been given a clean bill.

ACRA will choose firms with ‘clean’ statements to review based on their level of risk, the nature of the company, and whether or not new standards have been introduced in the sector.

Dr Ernest Kan, president of the Institute of Singapore Chartered Accountants, said: “For companies that have a weak finance team, or a team that does not have qualified accountants, given this surveillance programme, they really have to step up as with both ACRA and ISCA looking at this, if they do not get their financial statements properly prepared… the regulator would then have to take appropriate action against the company for any non-compliance.”

Non-listed companies with public interest may also be reviewed depending on their size, revenue and capitalisation.

Dr Kan said: “For banks who lend money to private companies, given the surveillance programme, for bankers, lenders of companies, this is actually very good news for them.”

ISCA also signed an agreement with the Institute of Chartered Accountants in England and Wales to offer its members the globally-recognised Associate Chartered Accountant designation, subject to requirements.

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