Second Reading Speech by Second Minister for Finance, Ms Indranee Rajah on The Accountancy Functions (Consolidation) Bill, at The Parliament, on 9 November 202209 Nov 2022
Mr Deputy Speaker, I beg to move, "That the Bill be now read a second time."
2. The Accountancy Functions (Consolidation) Bill merges the Accounting and Corporate Regulatory Authority (ACRA), the Accounting Standards Council (ASC), and the Singapore Accountancy Commission (SAC) under one entity. The merger was first announced in July last year, and the merged entity will take on the name of ACRA. Upon the passing of the Bill, we intend for the merger to take effect on 1 April 2023.
3. The Government’s accountancy-related functions have evolved over the years.
a. The ACRA was created in 2004, following the merger of the Registry of Companies and Businesses, and the Public Accountants Board, to consolidate complementary functions in financial statement regulation and audit regulation. ACRA currently registers and regulates public accountants, business entities and corporate service providers.
b. The ASC was formed in 2007 to set accounting standards that would apply to companies and non-corporate entities such as charities, societies and co-operative societies.
c. The SAC was set up in 2013, following a recommendation made by the Committee to Develop the Accountancy Sector (CDAS). SAC’s key function is to grow the accountancy sector and related fields in Singapore, including the development of the Singapore Chartered Accountant Qualification (SCAQ) which leads to the conferment of the “Chartered Accountant of Singapore” designation.
4. The Government has reviewed the structure of these entities, and assessed that there is value in consolidating these accounting-related functions within one entity. The merger seeks to achieve the two key objectives, while preserving the existing strengths of the constituent parts:
a. One, it will strengthen the effectiveness of regulation, standards- setting, and sector development by harnessing synergies across complementary functions.
i. Sustainability reporting is an example. ACRA has set up a sustainability reporting office and is taking the lead to monitor global reporting developments on this front. ACRA is also working with industry stakeholders to develop an implementation roadmap.
ii. For the roadmap to be feasible, our accounting firms and professionals need to be equipped with the necessary knowledge. Such capability building and sector development initiatives are currently overseen by SAC.
iii. The merger of these entities will allow for closer partnership and forge a stronger feedback loop between regulatory and sector development matters, enabling us to respond more nimbly.
iv. We expect more of such cross-cutting issues in the future, for example on the valuation of intangible assets and implications on financial reporting standards. Thus, a merger of these entities is timely.
b. Two, it will strengthen the merged entity’s ability to develop and manage talent in a sustained manner, as well as provide better career development opportunities to officers.
i. Today, SAC and ASC secretariat are both small organisations, with a staff strength of less than 30 officers. By merging them with ACRA which has a wider range of responsibilities and larger staff strength of about 200 officers, there will be more opportunities for existing SAC and ASC secretariat officers to be cross-deployed, cross-trained and move forward in their careers.
5. The Bill seeks to give effect to the merger, through two key sets of amendments, and let me elaborate on them.
Key Amendments Set 1: Amendments to the ACRA Act and repeal of SAC Act
6. The first set of amendments relates to amendments to the ACRA Act, and the repeal of the SAC Act.
7. Currently, the SAC Act provides for the SAC to perform the functions and powers relating to the growth and development of the accountancy sector and its related fields, such as business valuation. The SAC Act also provides for SAC to register persons as Chartered Accountants of Singapore, and handle issues relating to the suspension or termination of such membership.
8. Part 1 of the Bill amends the ACRA Act to allow ACRA to take on the functions and powers that currently reside with SAC. The Bill also provides for SAC’s assets, liabilities, records and employees to be transferred to ACRA, with no change to the employment terms of SAC’s employees. SAC’s current employment terms are the same as those of ACRA.
9. Consequentially, the SAC Act will be repealed, and the SAC dissolved accordingly. Savings and transitional provisions have been provided under Part 5 of the Bill to ensure that the handover from SAC to ACRA can be smoothly effected, for example, where there are pending applications relating to Chartered Accountants of Singapore.
Key Amendments Set 2: Amendments to the Accounting Standards Act
10. The second set of amendments pertains to amendments to the Accounting Standards Act.
11. Currently, the ASC sets accounting standards that apply to companies, charities, societies and co-operative societies in Singapore.
12. Following the merger, the Bill provides for an Accounting Standards Committee to be established within ACRA. The appointment of members to the Committee will have to be approved by the Minister for Finance, as is the case with the appointment of members to the ASC today.
13. The Bill confers the accounting standards-setting function for companies, charities, societies and co-operative societies in Singapore on ACRA. This would allow the Accounting Standards Committee, which will now be reconstituted under ACRA, to continue performing its function of setting accounting standards in the same way as the Accounting Standards Council does today.
14. The Bill also provides that the accounting standards made or formulated by the ASC that are currently in force will remain valid, until otherwise superseded by the Accounting Standards Committee.
15. Part 3 of the Bill provides for the amendments to the Accounting Standards Act.
Consequential and related Amendments
16. Finally, Part 2 and Part 4 of the Bill provide for consequential and related amendments to other Acts. These are to allow non-ACRA Board members to be appointed to the Public Accountants Oversight Committee, and to replace existing references to “Singapore Accountancy Commission” with “Accounting and Corporate Regulatory Authority”, and existing references to the “Accounting Standards Council” with “Accounting Standards Committee”.
17. In conclusion, Sir, the amendments in this Bill is to effect the merger of ACRA, SAC and ASC into a strengthened accountancy function under one entity.
18. Over the past decade, the accountancy sector has evolved from bookkeeping and auditing to include a myriad of other roles such as corporate governance, insolvency, and business advisory services. With emerging trends such as sustainability, the accountancy sector will continue to evolve further. We are committed to supporting the industry on this transformation journey and the merger will better serve the accountancy sector. This will in turn enhance Singapore’s pro-business and trusted regulatory environment.
19. Mr Deputy Speaker, I beg to move.