New Regulatory Measures to Further Raise the Audit Quality Bar

To ensure public accountants in Singapore continue to hold themselves to high audit quality standards, ACRA will soon be implementing the following measures:

(i) Setting a target for the six audit firms that are part of the GPPC networks that perform listed company audits, to achieve a 25% reduction in the percentage of inspected audit engagements with at least one finding over a four year period (from 2015 to 2019);

(ii) Introduction of six Audit Quality Indicators targets that will provide firms as well as audit committees with a common yardstick to compare audit quality; and

(iii) Publication of inspection outcomes for public accountants who have failed at least two successive inspections (the latter being a revisit) and received a hot review, or restriction followed by a hot review outcome imposed in their later inspection.

[See Annex 1 of the full article for more details on the new regulatory measures]

ACRA’s New Initiatives to Improve Audit Quality

1. Established in 2004, the objective of the Practice Monitoring Programme (PMP) is to increase the quality of audits through the inspection of audit engagements performed by public accountants. In administering the programme, ACRA strives to balance its regulatory approach with non-regulatory initiatives to enhance the quality assurance of the profession.

2. This year, ACRA takes further steps to raise the bar on audit quality with the introduction of several regulatory and non-regulatory measures. These initiatives are multi-prong and targeted at both the engagement-level and firm-level to ensure that public accountants and firms in the listed and non-listed segments alike are encouraged to continue in their efforts to continually improve audit quality. The new regulatory and non-regulatory initiatives implemented by ACRA are as follows:

At the engagement-level:

(i) A targeted 25% reduction in the percentage of inspected audit engagements with at least one finding over a four-year period (“25% reduction initiative”) among the six firms that are part of the GPPC network; and

(ii) An extension of ACRA’s Publication Regime on Inspection Outcomes.

At the firm-level, through the introduction of ACRA’s Targets on six Audit Quality Indicators (“AQIs”). New Initiatives Impacting Engagement-level inspections.

Please click here for information on the full article.

Source: Accounting and Corporate Regulatory Authority

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