Keynote Address by Mrs Lim Hwee Hua, Minister in Prime Minister's Office, Second Minister for Finance and Transport, at the Public Accountants' Conference 2009, on 19 August 2009, Raffles City Convention Centre19 Aug 2009
Distinguished Speakers and Panelists,
Ladies and Gentlemen,
I am very pleased to be speaking at ACRA's fourth annual Public Accountants Conference.
2 The current economic climate has once again brought into sharp focus the importance of the fiduciary role of public accountants. Many public accountants will have already been called upon in various capacities to help manage the heightened risks in the business and financial reporting environment in some cases, and to help rectify shortcomings in others. This conference provides a good opportunity for the accountancy profession to take stock and look at how it can best serve the business community, as we seek to further strengthen confidence in both corporates and financial markets. At the same time there are exciting growth opportunities for the accountancy sector. These two missions ? serving the business community, and continual development of the profession, are really two sides of the same coin; or two sides of the same ledger if you will.
Accountants play a key role in corporate governance
3 I will thus speak on two areas: firstly, the accountancy profession's key role in the corporate governance framework and the importance of upholding quality; secondly, the need to seize opportunities for growth through reinvention, and to continue to value-add, and leverage off Singapore's trusted brand.
4 It is important that the corporate governance framework inspires confidence among businesses and investors when they look at the business environment in Singapore. The accountancy profession can make a profound contribution to reinforcing this confidence. Accountants are in a unique position because they contribute throughout the entire framework: as external accountants, audit committee members and chairpersons, CFOs, and internal auditors.
5 This spectrum of possible roles gives the profession aunique capacity to promote effective relationships among the players who share the responsibility to instil business confidence.
6 In particular, the profession can promote an effective working relationship between auditors and audit committees. Similar to the auditor, audit committees have a fiduciary duty to investors. A strong and healthy working relationship between auditors and audit committees will generate much value in terms of risk management for the company and confidence for its investors.
7 Because of the importance of interface between audit committees and auditors, ACRA commissioned a survey by the Singapore Management University on what Singapore's audit committees value when they appoint and work with auditors.
Value proposition of an audit as a professional service
8 You will shortly hear about the survey's findings, but I would like to note a key thread that runs through these findings. The survey indicates that two qualities audit committees look for most in auditors are the ability to communicate effectively, and the comfort and trust they engender. One can infer the following from the emphasis on communication and trust: Firstly, it highlights the importance of an effective relationship between the auditor and audit committee. Secondly, it suggests that the audit is valued for the professional qualities and skills that the public accountant offers throughout the audit process, and not just for the final report at the end.
9 These are heartening points to take note, and I encourage public accountants and audit committees to enhance mutual understanding, promote the value of the audit report, and thus strengthen investor confidence.
ACRA's rigorous oversight and the identified challenges and opportunities
10 Externally, confidence in audit reporting is also enhanced by ACRA's independent and robust auditor oversight. ACRA's regulatory regime is respected internationally and regarded as one of the leading regimes in the region. This level of confidence and trust is essential to maintaining Singapore's position as an international business hub.
11 To maintain this level of confidence and trust, it is important for us to continually reach for and sustain high standards. ACRA therefore conducts robust independent audit inspections that are internationally benchmarked. ACRA's audit inspections also provide a basis for confidence, and an appreciation of audit quality by stakeholders such as audit committees and investors.
12 Today, ACRA is releasing its 2009 Public Report on the Public Practice Monitoring Programme. The Report shows that most of the audit proceduresand work that ACRA has reviewed, have met regulatory expectations. However, ACRA has also identified areas for improvement to ensure that Singapore's public accountancy profession delivers the highest level of quality in its work. These areas of improvement include ensuring that public accountants are able to bring their most valued and distinguishable qualities to the audit ? such as experience and professional scepticism. Such qualities are important across the profession, from those who are involved in the largest and most complex audits to those who serve the burgeoning small business sector.
Opportunities for reinvention and growth
13 The public accountancy profession should therefore look upon the challenges to be discussed today as a call to focus on the qualities that are essential to the profession's future growth and success.
14 There are exciting prospects for growth in Singapore's accountancy sector. Singapore's trusted brand provides a solid platform from which the profession can launch to become a regional and international leader in many areas of accountancy.
15 We are already seeing some exciting buzz across Singapore's accountancy landscape. International accounting institutions are taking a strong interest in Singapore. The Institute of Chartered Accountants of England and Wales has recently set up its South East Asia hub in Singapore. Except for one, all of the 30 largest international accounting networks have established their presence here in Singapore. Our larger accounting firms are taking up regional leadership roles within their international networks. Singapore accountants are much sought after by companies to take on regional leadership roles in accounting and finance. There is a real sense that Singapore can become the accountancy hub of Asia.
16 This presents good opportunities for all levels of the accountancy sector, both to enhance its capacity and grow its market. Singapore's smaller accountancy firms do have unique challenges. But if these challenges are tackled squarely and the profession can successfully develop and serve the changing needs of Singapore's fast developing small and medium enterprise (SME) sector, many excellent opportunities will arise. This is an exciting time to redefine and reinvent the way that the accountancy profession serves businesses in Singapore and the region.
17 Together, the accountancy sector can grow under Singapore's trusted brand. The Institute of Certified Public Accountants of Singapore, as Singapore's national accountancy body, will play a key role in promoting the Singapore CPA brand and supporting its members who carry this brand throughout Singapore and the region, and even farther afield.
18 The Committee to Develop the Accountancy Sector, or CDAS has also been looking at these opportunities. CDAS has been busy surveying the different communities of the accountancy sector. Towards the end of the year, CDAS will conduct a public consultation on how we can better develop the accountancy sector. I encourage the profession to actively participate in the consultation to help shape the future of Singapore's accountancy sector and realize its full potential.
19 In conclusion, today, let me note that the Singapore accountancy profession's practices are already benchmarked against international standards and best practices, but there is still a need for vigilance and continuous improvement. The profession is building strong international ties which are generating exciting possibilities. The Singapore accountancy sector can build upon its strong foundations to take up regional leadership, which will serve as a platform for growing the accountancy sector.
20 With that, I wish you a fruitful discussion ahead. Thank you.