Keynote Address by Mrs Tan Ching Yee, Permanent Secretary for Finance, at Institute of Singapore Chartered Accountants (ISCA) Practitioners Conference, 28 October 2021

Mr. Kon Yin Tong, President of ISCA

Distinguished guests

Ladies and gentlemen

Good afternoon. Thank you for inviting me to the ISCA Practitioners Conference. I am happy to join you virtually for the second year running. 

Adapting to the winds of change 

2. Much has changed since I spoke at last year’s conference. 

a. Globally, as countries continue to battle COVID-19, we celebrate the triumph of science and innovation through the rapid development of vaccines, with more than 6 billion doses already administered across 184 countries[1].

b. Closer to home, we have to live with various COVID management measures for a while more, but can expect better economic growth of 6-7% in 2021[2].

3. In short, even in the midst of adversity and challenges, there are bright spots.

4. We can expect more changes in the coming months and years. 

a. With the shift from pandemic to endemic, countries around the world are changing their strategies to deal with the virus. Singapore is also making the transition to live with an endemic COVID-19.

b. Beyond COVID-19, climate change is concurrently affecting every country – with changing weather patterns, rising sea levels, and extreme weather events. 

5. Against this backdrop, the theme of today’s conference – at the lead of change – is pertinent. 

a. Our auditors are well-positioned to be at the forefront of this change. Let me explain why this is so. 

Leading the change

6. First, let’s talk about COVID-19. 

a. Robust regulatory oversight creates public trust and increases investors’ confidence.  

b. This is especially critical as COVID-19 has underscored the importance of trust and stability. 

i. For example, Singapore has remained a trusted partner to global businesses despite the uncertainties brought about by COVID-19 – attracting a 12-year high of $17.2 billion in fixed asset investments last year[3].

c. Auditors play a key role through your independent assurance on corporate reporting. As such, auditors can take the lead in boosting a country’s ‘trust premium’, by ensuring high audit quality. 

7. Second, let’s talk about climate change. 

a. As climate change remains a pressing threat, there is growing recognition of, and support for, sustainability reporting. 

i. By ensuring credibility of sustainability disclosures, auditors can take the lead in providing investors with reliable information. This facilitates mobilisation of capital to finance the transition to a low carbon and sustainable economy.  

8. There are many things which we - practitioners, ISCA as a professional body and Government agencies - can do together, to be well-prepared for the future, from the immediate challenge of COVID-19 to the long-term.
Improve audit quality

9. First, let us work together to uplift audit quality, both at the system level and at the audit firm level. 

10. At the system level, constant review and update of our regulatory regime is essential to uphold Singapore’s reputation as a trusted place for business, and maintain public trust in the work of the audit profession. 

a. ACRA has been working on proposals to update the regulatory regime for Public Accountants, and a public consultation was recently launched to seek feedback on proposed amendments to the Accountants Act.

b. These amendments mainly concern ACRA’s statutory inspection programme, including the Practice Monitoring Programme (PMP). 

i. The PMP is an important regulatory instrument to provide quality assurance to the market, through ascertaining whether Public Accountants have complied with prescribed auditing requirements. 

ii. A review of the PMP is thus crucial to improve audit quality, and keep the regulatory regime abreast with industry and international developments.

c. We would like to hear your views and look forward to your feedback. 

11. At an audit firm level, adopting new quality management standards contributes to improved audit quality. 

a. For instance, ISCA has plans to effect SSQM 1, SSQM 2 and SSA 220 by the end of next year. These new standards introduce changes to strengthen audit firms’ quality management systems and processes, which include a new proactive risk-based approach. 

b. Adopting these standards will enable the profession to achieve enhanced quality management, which better enables consistent performance of quality audits. 

Be future-ready

12. Second, let us embrace the key trends facing us – namely, technology and sustainability. 

13. COVID-19 has accelerated innovation and technology adoption.

a. From the Singapore Accountancy Commission’s (SAC) latest survey of 707 accounting entities, there has been a rise in the adoption of technology. 

b. For instance, 31% of firms adopted cloud accounting software in 2020, compared with 22% of firms in 2019. 

14. Each professional and our firms should lock-in these hard-won gains and build on them. Even if we succeed in beating back COVID-19, there will be Disease X or other health crises.

15. Turning to sustainability, there is growing momentum for sustainability reporting, internationally and in Singapore. 

a. The International Financial Reporting Standards Foundation is currently working to establish an International Sustainability Standards Board under its governance to develop global baseline sustainability reporting standards. Global baseline climate standards may possibly be developed as early as 2022.

b. In Singapore, the Monetary Authority of Singapore and the Singapore Exchange have signalled the intent to set out roadmaps towards mandatory climate-related financial disclosures for financial institutions and listed entities respectively. 

16. It is timely for the profession to keep pace with these developments to shape a future high-growth practice area in sustainability reporting assurance, and be in a position to support businesses in their sustainability reporting. 
Merger of accountancy-related units

17. On our part, Government agencies are also transforming ourselves to support you better.  

18. In July, the Ministry of Finance announced the merger of ACRA, SAC and the Secretariat of the Accounting Standards Council. This merger will strengthen the effectiveness of regulation, standards-setting, and sector development by harnessing synergies across complementary functions.  

19. It will bring about a strengthened accountancy function housed under one entity, that will continue to work closely with professional bodies and businesses to build up Singapore as the best place for business.

Conclusion 

20. As Barack Obama once said, “Change is never easy, but always possible.” I am confident that the profession is able to step up to the challenge, and take the lead in the face of change.
 
Thank you very much, and have a fruitful conference ahead. 

***

[1] https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-distribution

[2] https://singstat.gov.sg/-/media/files/news/gdp2q2021.pdf

[3] https://www.edb.gov.sg/en/about-edb/media-releases-publications/edb-year-2020-in-review.html