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S’pore firms lift their game in financial reports: Acra

SINGAPORE – The quality of financial reporting by Singapore-listed companies has improved, with fewer warnings and advisory letters issued by the Accounting and Corporate Regulatory Authority (Acra) after its review of financial year 2014 reports, the regulator said yesterday.

SINGAPORE – The quality of financial reporting by Singapore-listed companies has improved, with fewer warnings and advisory letters issued by the Accounting and Corporate Regulatory Authority (Acra) after its review of financial year 2014 reports, the regulator said yesterday.

Under the Acra’s Financial Reporting Surveillance Programme (FRSP), the regulator selects 50 sets of financial statements of listed companies incorporated in Singapore for review every year. Acra does not disclose the identities of companies selected under the FRSP, whose primary goal is to help the firms meet requirements in accounting standards so that investors and other stakeholders are provided with reliable and meaningful financial statements.

In the review of the FY2014 reports, 17 were completed without any inquiry needed. Of the remaining 33, two warning letters for serious non-compliance with accounting standards, 21 advisory letters for non-compliance and seven closure letters have been issued, while three reviews are ongoing. This compares with the five warning letters and 30 advisory letters issued in the previous year, but Acra said there remains room for improvement, highlighting four areas with the highest instances of non-compliance. These include new consolidation standards, business acquisitions, impairment of long-lived assets and the fair value of properties.

“Ensuring high-quality financial reporting is a collective responsibility. For Singapore to maintain its reputation for trust and its pole position as a leading business and financial centre, it is imperative for all stakeholders in the financial reporting value chain — directors, management, finance teams, auditors, investors, and regulators to work together to raise the bar on financial reporting,” Acra said.

Companies are responding positively to measures taken to improve quality financial reporting instituted by the FRSP, Acra said. Companies are required to rectify non-compliance issues in the subsequent year’s financial statements; for serious non-compliance issues that led to sanction, companies may also be required to restate, re-audit and refile their past financial statements.

According to the Acra report, 95 per cent of the 21 non-compliance cases and 63 per cent of the 19 cases related to areas of improvement were rectified in the financial reports for FY2015. “The high rectification rate, especially for those cases with areas for improvement for which corrections are not mandatory, is highly encouraging. It shows that the vast majority of boards of listed companies in Singapore are committed to delivering high quality financial information to investors,” Acra said.

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