PRO-TEM Singapore Accountancy Council announces the launch of the CFO Institute and the inaugural CFO Connect event
In September, the Pro-Tem Singapore Accountancy Council (Pro-Tem SAC) launched the CFO Institute and the inaugural CFO Connect event.
The CFO Institute (CFOI) will be established under the purview of the Singapore Accountancy Council (SAC). It aims to be the premier association of CFOs and aspiring CFOs, for the business communities in Singapore and the Asia-Pacific. It will conduct training as well as facilitate the networking of CFOs.
An Advisory Council will be established to set the strategic direction for the establishment and development of the CFO Institute. The CFOI Advisory Council will be chaired by Mr Olivier Lim, former Group CFO and now Head of Strategic Corporate Development in CapitaLand Limited.
The inaugural CFO Connect was attended by more than 80 invited guests, comprising mainly Chief Financial Officers and senior executives.
More information is available at www.acra.gov.sg.
SGX Enhanced Listing Rules to Strengthen Corporate Governance Practice
In September, the Singapore Exchange Ltd (SGX) announced amendments to listing rules to strengthen corporate governance practices and foster greater corporate disclosure. These amendments are undertaken to keep abreast of the challenges and developments of the industry and are part of SGX’s ongoing efforts to enhance the quality of the marketplace.
More information is available at www.acra.gov.sg.
ASC issues Financial Reporting Standards
The Accounting Standards Council (ASC) has issued FRS 19 Employee Benefits, FRS 27 Separate Financial Statements, FRS 28 Investments in Associates and Joint Ventures, FRS 110 Consolidated Financial Statements, FRS 111 Joint Arrangements, FRS 112 Disclosure of Interests in Other Entities and FRS 113 Fair Value Measurement, effective for annual periods beginning on or after 1 January 2013.
The ASC has also issued Amendments to FRS 1 – Presentation of Items of Other Comprehensive Income, effective for annual periods beginning on or after 1 July 2012.
More information is available at www.asc.gov.sg
ACRA issues new Administrative Requirements for Public Accountants
ACRA has issued new administrative requirements relating to the registration of public accountants. With effect from 1 October 2011 an applicant for registration as a public accountant is required to obtain a confirmation letter from the Institute of Certified Public Accountants of Singapore (ICPAS), prior to submission of the application, to facilitate an assessment of the fulfilment of the requirements relating to professional qualification, ICPAS membership and completion of the Public Practice Programme.
He/she will also be required to provide relevant information and supporting documents relating to his application to ACRA’s email address email@example.com within 5 working days from the date of the online application.
More information is available at www.acra.gov.sg.
ACRA issues Guidance on Engagement Quality Control Review
ACRA has issued Audit Practice Bulletin No. 1 of 2011 – Engagement Quality Control Review.
The engagement quality control review process is an important aspect of a firm’s controls over audit quality. It serves as a safeguard in ensuring that the audit risks have been appropriately addressed and the audit opinions issued are correct and sufficiently supported.
This Audit Practice Bulletin seeks to provide guidance on how firms should assign engagement quality control reviewers (EQCR) to engagements, what constitutes sufficient and timely involvement of EQCR in an engagement and how the role of the EQCR can be strengthened by enhancing accountability.
More information is available at www.acra.gov.sg.
Companies Act Amendments
More than 200 proposed changes to the Companies Act were submitted to the Finance Ministry by the Steering Committee that was tasked with reviewing the Companies Act. These recommendations are expected to reduce the regulatory burdens of companies and improve company management.
One recommendation is to replace the concept of an exempt private company with a new definition of a small company, which would include companies that do not have more than S$10 million in annual revenue and gross assets, as well as not having more than 50 employees. It was felt that this change will help open up audit and filing exemptions to at least six-in-10 companies in Singapore.
Another recommendation was to extend the use of statutory derivative action to listed companies. This would effectively allow shareholders to sue directors for a breach of duty - something they cannot do under the current Act.
The Committee has also recommended that banks or the custodians of shares be able to appoint more proxies at Annual General Meetings (AGMs). This would potentially allow more Central Provident Fund investors to attend AGMs.
There had been expectations that the committee would recommend a list of duties for company directors to follow. However, the Committee decided against it as it was of the view that the ‘one-size-fits-all’ approach may not be appropriate.
The list of recommendations is subject to acceptance by the Ministry of Finance. The Committee expects the Act to ‘shape up’ over the next one to two years. The Act was last reviewed in December 1999.
Pro-Tem SAC invites tenders for development of Qualification Programme
The Committee to Develop the Accountancy Sector (CDAS) had recommended the development of a globally-recognised, Singapore-branded, post-university professional accountancy qualification programme (the Programme) to train audit professionals and professional accountants. In addition, the qualification is expected to have international portability and an “Asian market value factor”.
The Accounting and Corporate Regulatory Authority (ACRA), on behalf of the Pro-Tem Singapore Accountancy Council (Pro-Tem SAC), are inviting tenders for the procurement of consultancy services to develop this new Singapore post-university professional accountancy programme.
The tender seeks to invite proposals from interested parties with the relevant expertise to act as a Consultant to the Pro-Tem SAC in the development of the Programme, and is open for a period of eight weeks. It will close on 1 July 2011.
More details can be found at ACRA’s website http://www.acra.gov.sg
Singapore-Italy Double Taxation Agreement
Singapore and Italy signed an Additional Protocol to incorporate the internationally agreed Standard for the exchange of information for tax purposes, upon request, in their standing Agreement for the Avoidance of Double Taxation (DTA), among other provisions.
The full text of the protocol is available at IRAS’s website http://www.iras.gov.sg. The Protocol will enter into force after its ratification by both countries.
MOF and ACRA issue Consultation Paper on Companies Act Amendments
The Ministry of Finance (MOF), together with the Accounting and Corporate Regulatory Authority (ACRA) which administers the Companies Act, have invited the public to provide feedback on the Report of the Steering Committee for Review of the Companies Act. MOF and ACRA have also invited the public to provide feedback on the review of the regulatory framework for foreign entities in Singapore.
The Companies Act contains provisions relating to foreign companies. The Steering Committee took the view that the laws relating to the registration and regulation of foreign entities, namely branches of foreign corporations registered in Singapore, should be placed in separate legislation to facilitate the streamlining of the Companies Act. There is no intent for any significant widening of the scope of regulation of foreign entities. The proposed standalone legislation will not regulate the operations of subsidiaries (incorporated in Singapore) of foreign companies, which will continue to be regulated under the Companies Act.
The public consultation exercises will ran from 20 June 2011 to 16 September 2011. More information can be found at ACRA’s website www.acra.gov.sg
MOF issues Consultation Papers on Income Tax and GST
The Ministry of Finance (MOF) conducted a public consultation on the draft Income Tax (Amendment) Bill 2011 between 11 July 2011 and 1 August 2011. The proposed amendments to the Income Tax Act mainly relate to changes announced in the 2011 Budget Statement. The MOF also conducted a public consultation on the draft GST (Amendment) Bill 2011 from 8 July to 28 July 2011. The consultation documents together with the explanations for the draft Income Tax (Amendment) Bill 2011 and the draft GST (Amendment) Bill 2011 can be accessed on the Ministry of Finance's website www.mof.gov.sg and the REACH consultation portal www.reach.gov.sg
Council issues Consultation Paper on Corporate Governance Code
Since the last review of the Corporate Governance Code in 2005, global events such as the recent financial crisis have highlighted pertinent corporate governance issues that have led to a closer study of corporate governance issues around the world.
Consequently, the Corporate Governance Council has proposed changes to 14 of the principles in the Code and their accompanying guidelines, and introduced two new principles. The Council has also included a statement on ‘The Role of Shareholders’ as an annexure to the Code. A public consultation paper had been issued to invite the public to provide feedback on these proposed changes. The consultation period ended on 31 July 2011. More information is available at MAS’s website www.mas.gov.sg
In proposing changes to the Code, the Council recognises that corporate governance practices vary across jurisdictions and will necessarily reflect the unique and practical situations in each jurisdiction. Hence, the Council has sought to adapt, rather than replicate relevant practice of other jurisdictions.
MAS Strengthens Capital Requirements for Singapore-Incorporated Banks
The Monetary Authority of Singapore (MAS) announced that Singapore-incorporated banks will meet capital adequacy requirements that are higher than the Basel III global capital standards. MAS will require Singapore-incorporated banks to meet a minimum Common Equity Tier 1 (CET1) capital adequacy ratio (CAR) of 6.5%, Tier 1 CAR of 8% and Total CAR of 10% from 1 January 2015.
These standards are higher than the Basel III minimum requirements of 4.5%, 6% and 8% for CET1 CAR, Tier 1 CAR and Total CAR, respectively. In addition, MAS will require Singapore-incorporated banks to meet the Basel III minimum capital adequacy requirements from 1 January 2013, two years ahead of the Basel Committee on Banking Supervision’s 2015 timeline. This means that from 1 January 2013, Singapore-incorporated banks will meet a minimum CET1 CAR of 4.5% and Tier 1 CAR of 6%. MAS’ existing requirement for Total CAR will remain unchanged at 10%.
Capital requirements on Singapore-incorporated banks need to be set higher than the Basel III minimum requirements because each of the Singapore-incorporated banks is systemically-important in Singapore and has a substantial retail presence. While they remained strong throughout the global financial crisis, the higher capital requirements will further strengthen their ability to operate under stress conditions and will help protect depositors, reduce risks to the economy, as well as safeguard financial stability. More information can be found at MAS’s website www.mas.gov.sg
Amendments to Accountants Act
Singapore is reviewing its Accountants Act for the first time in seven years to ensure that the regulatory framework for public accountants remains relevant. The review may result in higher standards being set for public accounting firms that audit Public Interest Entities (PIEs), such as listed companies and charities. Special investigation powers could also be introduced to give ACRA, the regulator, to go after firms which do not comply with audit requirements. More information can be found at ACRA’s website www.acra.gov.sg
ACRA publishes 5th Practice Monitoring Programme Public Report
ACRA, in its role as a regulator of the public accountancy profession in Singapore, monitors the quality of public accountants through its Practice Monitoring Programme (PMP). The publication of the PMP Public Report serves to promote an understanding of ACRA’s work and objectives as well as to highlight certain key gaps so that the profession can take remedial actions to improve audit quality. This fifth report covers the observations from ACRA’s PMP reviews from April 2010 to March 2011.
ACRA has noted the efforts of PIE firms (i.e. firms that audit Public Interest Entities) in improving firm-wide quality controls including establishing additional internal pre and post-issuance quality reviews. While there has been progress in addressing issues identified in previous inspections, ACRA notes that audit quality in the non-PIE segment requires continual monitoring. More information can be found at ACRA’s website www.acra.gov.sg
SGX Introduces Sustainability Reporting Guide to Support Listed Companies
Singapore Exchange (SGX) has introduced a Sustainability Reporting Guide for its listed companies. This follows a public consultation, issued in August 2010 that received widespread attention and positive feedback in support of disclosure and accountability for operating and developing businesses in a sustainable manner.
Within the Guide, the Policy Statement sets out the principles and the Questions and Answers guide listed companies in extending their reporting beyond financial governance to sustainability aspects. A more holistic reporting will be achieved, with companies reporting their financials as well as the environmental and social risks and strengths, as appropriate.
The Policy Statement and Sustainability Reporting Guide are applicable to Mainboard and Catalist companies listed on SGX and are available on www.sgx.com under Rule Books.
ASC issues Charities Accounting Standard (CAS) and prescribes Financial Reporting Framework for Charities
The Accounting Standards Council (ASC) has issued the Charities Accounting Standard (CAS), which is tailored to meet the needs of the charity sector and its stakeholders. The new standard will make financial reporting simpler and more relevant for charities while enhancing disclosures for greater transparency. This latest initiative is also part of a larger effort by the Office of the Commissioner of Charities to improve governance and enhance public confidence in the charity sector.
The ASC has also set out the financial reporting framework for charities, which will apply to charities when they prepare their financial statements for financial periods beginning on or after 1 July 2011. Most charities can choose to adopt the Singapore Financial Reporting Standards (FRS) or the CAS based on their own needs and operations. For charities that hold significant investments in any subsidiary, associate or joint venture that is not a charity, the FRS will apply.
Statement of Applicability
The Office of the Commissioner of Charities (COC) has issued a statement that sets out the following implementation dates for charities to adopt the financial reporting framework. (The statement does not apply to charities that are Statutory Bodies and educational institutions.)
a. Phase 1: For financial periods beginning on or after 1 July 2011: Charities or Institutions of a Public Character (IPCs) that are companies, and large IPCs that are not companies, are required to comply with either the FRS or the CAS. However, charities that hold significant investments in any subsidiary, associate or joint venture that is not a charity are required to comply with the FRS.
b. Phase 2: For financial periods beginning on or after 1 January 2015: All other charities that are required to have their financial statements audited are required to comply with either the FRS or the CAS. However, charities that hold significant investments in any subsidiary, associate or joint venture that is not a charity are required to comply with the FRS.
More information is available on ASC’s website www.asc.gov.sg
MAS Requires Intermediaries to Assess Investment Knowledge and Experience of Retail Customers
The Monetary Authority of Singapore (MAS) has introduced new requirements for intermediaries to formally assess a retail customer’s investment knowledge and experience before selling certain investment products to the customer.
These new requirements will apply to the sale of Specified Investment Products (SIPs), which include listed SIPs such as futures and exchange traded funds, and unlisted SIPs such as investment linked insurance policies. More information is available at www.mas.gov.sg.
ACRA Launches First Handbook for Directors
The Accounting and Corporate Regulatory Authority (ACRA) has launched its first handbook for directors entitled ACRA & I – Being an Effective Director.
The handbook is written for new or aspiring directors as well as those who have no formal training, to help them better understand their responsibilities and duties. It serves as a practical hands-on guide for directors on the know-how in performing their statutory duties and meeting their legal and compliance requirements, with useful information including the requirements of directors, common statutory requirements, as well as step-by-step guides for electronic form filings. More information is available at www.acra.gov.sg.
ACRA Services Go Mobile with New iPhone App
ACRA has introduced its first mobile application for iPhone users, called ACRA On The Go, which provides mobile versions of three services unique to ACRA: the ‘Directory Search’, a simplified version of ACRA’s ‘Directory Search on Registered Business Entities’; the ‘AGM Calculator’ which allows offline calculation of the last possible date for the company’s next AGM; and ‘mFAQ’, a mobile version of ACRA’s online enquiry service, ‘Ask ACRA’.
The iPhone app is a mobile extension of existing services currently available on ACRA’s homepage (www.acra.gov.sg) and BizFile, ACRA’s electronic online filing and information retrieval portal (www.bizfile.gov.sg). ACRA is launching the mobile app as part of its efforts to enhance its one-stop business facilitation service that serves to promote a business-friendly environment in Singapore.
Avoidance of Double Taxation between Singapore and India
The Second Protocol to the standing Agreement for the Avoidance of Double Taxation (DTA) between Singapore and India, which incorporates the internationally agreed Standard for exchange of information into the standing DTA, entered into force on 1 September 2011. The full text of the Second Protocol is available at IRAS’s website www.iras.gov.sg.