Public Consultation on Proposed Amendments to the Accountants Act

Ministry of Finance

Consultation Period: 14 Oct 2021 - 13 Nov 2021

Status: Closed

Detailed Description

Introduction

The Ministry of Finance (“MOF”) and the Accounting and Corporate Regulatory Authority (“ACRA”) invite the accounting professionals and entities, business and investment entities, and members of the public to provide feedback on proposed amendments to the Accountants Act. The proposed amendments are set out in the draft Accountants (Amendment) Bill 2021 (“AA Bill 2021”). 

Background

2. The availability of trusted and reliable financial information supports Singapore’s reputation as a trusted place for business. To achieve this, ACRA regularly reviews the relevance of its regulatory framework (set out in the Accountants Act) to promote audit quality and provide market confidence on the reliability of audited financial information. 

3. The proposed amendments to the Accountants Act seek to promote audit quality through better assurance of information available to investors and the public.  The Bill includes key amendments to enhance the audit regulatory regime and introduce measures for better compliance with professional requirements and standards by both public accountants and accounting entities. These amendments also align Singapore’s regulatory practices with those in jurisdictions that have established independent audit regulation. 

Proposed Amendments

4. The draft AA Bill 2021 introduces the following key amendments to:

    (a) specify ACRA’s powers to conduct inspections on compliance with quality control standards by AEs (“QC inspections”); 

    (b) specify ACRA’s powers to conduct inspections on compliance with Anti-Money Laundering / Countering the Financing of Terrorism requirements by AEs and PAs (“AML/CFT inspections”);   

    (c) replace the current “pass” / “fail” grading system for the Practice Monitoring Programme with a new 3-tier assessment framework (i.e. “Satisfactory”, “Needs Improvement”, and “Not Satisfactory”) and specify the sanctions for engagement-level inspections that may be imposed under the 3-tier assessment framework. The new assessment framework will extend to QC inspections of AEs as well;

    (d) allow ACRA to mandate remediation of lapses and impose sanctions on AEs and/or PAs (as the case may be) for lapses discovered during QC and AML/CFT inspections;

    (e) allow ACRA to impose other orders (e.g. remedial actions) on suspended PAs and AEs, and specify that PAs and AEs may be suspended for up to two years if they refuse to undergo ACRA’s regulatory inspections without reasonable excuse;

    (f) allow ACRA to require PAs to disclose their inspection outcome and findings to their audited entities in situations where PAs have obtained a “Not Satisfactory” grading on their inspection; 

    (g) align the maximum quantum of financial penalties that could be imposed on AEs under disciplinary proceedings and QC inspections; and

    (h) empower the Public Accountants Oversight Committee to prescribe (by order in the Gazette) professional standards and code of professional conduct and ethics to be applied by PAs and AEs.

5. For more details, please refer to Annexes A and B.

Period of Consultation 

6. The draft AA Bill 2021 is available for public consultation from 14 October to 13 November 2021.

Public Consultation Details

7. Accounting professionals and entities, business and investment entities, and members of the public can access the consultation documents on MOF’s website (www.mof.gov.sg), ACRA's website (www.acra.gov.sg) and the REACH consultation portal (www.reach.gov.sg). 

8. Those who wish to provide your feedback can send your comments via email to “MOF_Public_Consultation@mof.gov.sg," by indicating “Public Consultation on Accountants (Amendment) Bill 2021” in the subject line.  

Summary of Response

9. MOF and ACRA will publish a summary of the comments received, together with our responses. The summary will not disclose the identity of respondents and may not separately address or acknowledge every comment received.

Attachments

• Annex A: Summary of proposed amendments to the Accountants Act
• Annex B: Draft Accountants (Amendment) Bill