ACRA, ISCA reiterate financial statements accounting standards
A new agreement that has been reached by the Accounting and Corporate Regulatory Authority (ACRA) and the Institute of Singapore Chartered Accountants (ISCA) and announced on 16 January 2014 signifies a reiteration and reinforcement of the responsibilities of Singapore directors in ensuring that financial statements accord with the Singapore financial reporting standards in a bid to further strengthen the quality of financial reporting in Singapore.
ACRA and ISCA will be selecting sample financial statements from a pool of listed and non-listed companies, including charities, for financial years ended from 1 January 2013. Contrary to their previous practice which focused mainly on financial statements of listed companies with modified audit reports, ACRA will now also be reviewing financial statements with unmodified audit reports to check for financial reporting deficiencies that may impair the reliability of the financial statements.
Under the new agreement, ISCA will be sharing its observations on potential non-compliances in financial statements with ACRA, which will deliberate and take enforcement action against directors under the Singapore Companies Act, if necessary. Under Section 204 of the Companies Act, depending on the severity of the offence that they are guilty of, the directors could be imposed fines and/or be subject to imprisonment.
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