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Second Reading (Response) Speech by Mrs Josephine Teo, Minister of State for Finance and Transport on the Singapore Accountancy Commission Bill at The Parliament, 14 Jan 2013

14 Jan 2013

1. Mdm Speaker, I thank both Mr Dhinakaran and Mr Sitoh Yih Pin for their support of the Singapore Accountancy Commission (SAC) Bill and for expressing confidence in the Committee to Develop the Accountancy Sector (CDAS)’s vision. In particular, Mr Dhinakaran spoke passionately and it is not often in a Bill that a Member’s speech is actually longer than the Minister’s.
Role of SAC

2. Before I respond to the specific concerns, I would like to reiterate two key points made earlier. First, to avoid duplication, the SAC will not be a membership body and, second, the SAC will act as an umbrella body pooling together the resources and coordinating the efforts of various stakeholders, including professional bodies like ICPAS. Madam, let me now respond specifically to Members’ concerns.

(i) ICPAS as the Designated Entity

3. Mr Dhinakaran voiced concerns over ICPAS’ role after the SAC is established. As I have explained earlier, ICPAS will have a critical role to play as a Designated Entity. ICPAS will be responsible for registering and renewing the registration of Chartered Accountants and will be the professional body holding membership of the Chartered Accountants. ICPAS is entrusted this important role in recognition of its good efforts to transform itself and to serve its members better. These roles involve frequent and close interactions with the accountants which the SAC had made a conscious decision to involve ICPAS in.

4. As is the case, for accountancy professional bodies in other leading jurisdictions, ICPAS will also be responsible for the professional competence, standards and ethics of their chartered accountant members. This is a heavy responsibility as the success of the Singapore Qualification Programme (SQP) hinges on the international standing of our Chartered Accountants.

5. In these above roles, I see ICPAS having the opportunity to add much more value beyond administration. I certainly hope that ICPAS shares that perspective. I should add that I fully support the ambitions of ICPAS to play a more prominent global role and I am very encouraged by the steps taken by ICPAS recently to strengthen itself.

6. Mr Dhinakaran asked if ICPAS will be the only Designated Entity. We do not have plans to appoint another Designated Entity, although the Bill has been drafted to give the Government this flexibility. The fact that the Government has named ICPAS as the Designated Entity in the SAC Bill reflects our desire and commitment to work with ICPAS on this national initiative.

7. The Government values ICPAS’ views as an important stakeholder in the sector. MOF and the Pro-Tem SAC have involved ICPAS in many of the discussions. For example, ICPAS was represented on the CDAS and has been represented on the Pro-Tem SAC and its various key committees and work groups. And this has been the case since the Pro-Tem SAC was formed in 2010. ICPAS also actively participated in the working groups responsible for the design of the SQP, including the academic framework, curriculum and learning materials.

8. Mr Dhinakaran shared that professional bodies in other countries own the professional accounting qualifications and designations. This is indeed the case where the professional bodies had moved ahead of the government to build up their own professional accountancy qualifications. However, in the United States and Hong Kong, the conferment of their respective professional designations is governed by legislative instruments, similar to the proposed regime in Singapore. Although both approaches can work, the benefit of our Government-led effort is that it sends a very clear signal of commitment. This is also a point which Mr Dhinakaran acknowledged in his speech.

9. Madam, at this stage of the Singapore Qualification Programme development, it is probably less important who owns it and more important to ensure that the qualification earns the trust and confidence of the industry, both in and outside of Singapore. In this regard, the Singapore Qualification Programme is off to a good start. Already, more than 40 organisations have expressed interest to become Accredited Training Organisations (ATOs) to provide on-the-job training for their own employees as part of the SQP practical experience requirement.

10. The SAC, as developer and guardian of this SQP, is entrusted to protect and preserve the integrity and reputation of the Chartered Accountant designation. So, although we refer to the SAC as being the owner, I think, in substance, the SAC really thinks of itself more as a developer and guardian of the Singapore QP. This role does not duplicate and indeed complements those of ICPAS which I had reiterated earlier. For the Singapore QP to succeed, both the SAC and ICPAS have to execute their roles well, and I would urge both organisations to focus efforts on the arduous tasks ahead.

(ii) Mutual Recognition Agreements

11. Mr Dhinakaran said that the SAC should not be initiating Mutual Recognition Agreements or MRA negotiations on its own with international counterparts. For the benefit of Members, let me explain why MRAs are important. An audit professional is able to sign off the audit opinion in a jurisdiction outside of Singapore only if he or she is registered as a public accountant in that country. In most countries, one of the criteria for registration is that the individual must be a member of the local professional body, which can be achieved if an MRA exists. Although MRAs are normally entered into between professional accountancy bodies, MRAs in the United States are negotiated by the International Qualifications Appraisal Board (IQAB) which represents the National Association of State Boards of Accountancy (NASBA) comprising the 55 state boards of accountancy and the AICPA, the professional accountancy body in the United States. This recognises the important roles played by both the statutory and professional bodies.

12. The Singapore approach, where the SAC and ICPAS will jointly negotiate MRAs, is thus similar to that of the United States, because we envision both the SAC and the ICPAS, both the statutory and professional bodies, to play important and complementary roles. I hope Mr Dhinakaran will contribute to strengthening the partnership between both organisations.

(iii) Chartered Accountant of Singapore

13. Madam, let me turn to Mr Sitoh’s comments. He has suggested that there be only one Singapore-branded professional accountancy designation, given our small market and size of profession. I agree with him and confirm the intention to only have the Chartered Accountant of Singapore designation. This will allow us to build a strong and internationally recognised brand and enhance our ability to secure MRAs with other major leading accountancy hubs.

14. Mr Sitoh had asked about the principles behind the transitional provisions. As he has rightly pointed out, existing CPA Singapore holders have contributed much to our economic success.

15. The Pro-Tem SAC has therefore, formed a dedicated Singapore QP Transitional Panel to recommend appropriate transitional arrangements. The panel is chaired by Mr Yeoh Oon Jin, who is the Executive Chairman of PricewaterhouseCoopers, one of the Big Four accountancy firms. Besides being a respected industry leader, Mr Yeoh is also an ICPAS council member and will certainly have insights into the concerns of existing CPAs. So, the very useful inputs that Mr Sitoh had highlighted pertaining to students and those who are already enrolled in CPA courses are very relevant and will have to be addressed by Mr Yeoh’s committee.

16. While the transitional arrangements are still being deliberated, I should share that the preliminary thinking is that existing CPA holders will not have to go through the Singapore QP to be registered as Chartered Accountants of Singapore. This means that their practice in Singapore will be unaffected. However, when it comes to mutual recognition by other jurisdictions, a Singapore QP qualification may well be needed. Existing CPAs may then find it advantageous to achieve the Singapore QP qualification. It is for each of them to decide how valuable the network of MRAs is and whether to invest time and effort to attain the QP qualification. Together with ICPAS, SAC will make every effort to facilitate CPAs in their decision making and to acquire the Singapore QP qualifications if they so desire.


17. Madam, once again, I thank Members for their thoughtful comments and support of the Bill.