Institute of Singapore Chartered Accountants
Member | Established: 1963 | Member since 1977
Statements of Membership Obligation (SMO)
The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.
- SMO 1: Quality Assurance
The responsibility for quality assurance (QA) reviews in Singapore rests with the Public Accountants Oversight Committee (PAOC), operating under the authority of the Accounting and Corporate Regulatory Authority (ACRA), and the ISCA.
In accordance with the Accountants Act, all public accountants and audit firms of public interest entities (PIEs) are subject to mandatory QA reviews under the PAOC’s Practice Monitoring Program (PMP). For inspections of audits of non-PIEs, the PAOC delegates review responsibilities to the ISCA.
In addition to the PMP, ISCA has also established a Quality Assurance Review (QAR) program which is voluntary for its members. The QAR Program involves the review of the public accountant’s engagement files for compliance with the Singapore Standards on Auditing, adherence to the Singapore Standard on Quality Control (SSQC) 1, and adherence to Ethics Pronouncements as issued by ISCA. Upon completion of the QAR Programme, a QAR report which includes the findings and proposed action plans will be furnished to the public accountant. Furthermore, the ISCA cooperates with ACRA and shares information on the QA review process and findings which ultimately results in an annual report on findings.
ISCA fully supports the implementation of QA reviews in Singapore by holding joint forums with ACRA to discuss the common observations and findings from both the QAR and PMP along with other common financial reporting issues facing small practitioners. It will then conduct tailored courses for small practitioners to address common observations noted during the PMP review and prepare technical guides and articles regarding SSQC 1 (based upon ISQC1) for its members. Additionally, it offers continuing professional development (CPD) courses on topics related to quality control and regularly reviews its CPD programs to evaluate whether they continue to meet members’ needs.
Finally, ISCA developed and launched the inaugural Illustrative Quality Control Manual (IQCM) to help small and medium-sized practitioners in their implementation of SSQC 1. The policies and procedures contained in the IQCM are developed based on the requirements of SSQC 1.
ISCA is encouraged to review its SMO Action Plan following the guidance and comments provided by IFAC staff. Specifically, ISCA is encouraged to clarify if its QAR mechanism is aligned with the requirements of SMO 1. If not, ISCA is encouraged to conduct a self-assessment; a table has been provided to conduct this assessment in the SMO Action Plan. In addition, as the PMP mechanism is vital to quality of auditing services in Singapore, ISCA is encouraged to clarify if the PMP is aligned with the best practices of SMO 1.
- SMO 2: International Education Standards
In Singapore, the Accountants Act and the Singapore Accountancy Commission Act establishes initial professional development (IPD) and continuing professional development (CPD) requirements for professional accountants. The entities that are responsible for the implementation of IPD and CPD requirements are the Singapore Accountancy Commission (SAC), the Accountant and Regulatory Authority, and the ISCA.
ISCA administers the Singapore Chartered Accountants (CA) qualification program. The institute works with the SAC to ensure that the practical requirements of the CA qualification are in line with the IES and ISCA reports that overall the program incorporates elements of the IES. ISCA is also responsible for establishing CPD requirements for its members, which is output based, and the institute regularly offers seminars, courses and conferences on topics around the profession for its members. As reported on its website, ISCA is promoting “Capability Development” to enhance the capability and capacity of firms and accounting and finance functions in companies through technology adoption, human capital development, business and management capabilities development and quality assurance.
Lastly, ISCA participates in the international standard-setting process to share its perspective by reviewing and responding to exposure drafts issued by the IAESB.
In light of the 2015 revised IES, ISCA is encouraged to indicate how it is working to incorporate these new requirements which emphasize learning outcomes and demonstrating competencies and move away from output-based approaches. This may necessitate a review of its IPD and CPD requirements and developing plans to bring these requirements in line with the revised IES requirements and working with the SAC in regards to practical experience requirements and verification.
- SMO 3: International Standards on Auditing
Under the Accountants Act, the Accounting and Corporate Regulatory Authority (ACRA) is responsible for approving auditing standards to be applied in Singapore. ACRA oversees the entire standard-setting process for auditing standards through its Public Accountants Oversight Committee (PAOC).
The International Standards on Auditing (ISA), as issued by the International Auditing and Assurance Standards Board (IAASB) are adopted as Singapore Standards on Auditing (SSA), with modifications to reflect national requirements where appropriate, by the ISCA Auditing and Assurance Standards Committee. SSA are issued following the review of the ISCA Council and the approval of the PAOC. As indicated on the ISCA website, the SSA are aligned with the 2016 ISA.
ISCA maintains an ongoing process to ensure the SSA are up-to-date and incorporate updates to the ISA. ISCA contributes to implementation of the standards by offering training workshops and seminars and through the preparation and issuance of guidance publications to its members. Continuing professional development courses are offered on the standards and other related topics, and courses are reviewed periodically to ensure that they include the latest information. ISCA monitors the IAASB work program for changes and keeps members updated by publishing material on the ISCA’s Centre for Auditing and Assurance microsite, in the monthly ISCA Journal, and in its weekly e-newsletter.
Lastly, the institute participates in international standard-setting by preparing and submitting comments to IAASB on Exposure Drafts and Consultation Papers to share its experiences and perspective.
- SMO 4: Code of Ethics for Professional Accountants
In Singapore, both the Accounting and Corporate Regulatory Authority (ACRA) and ISCA share responsibility for setting ethical requirements for professional accountants.
Members of ISCA—which include Chartered Accountants who are both public and non-public accountants—are subject to ethical requirements set by the institute. ISCA’s ethical requirements include two ‘Ethics Pronouncements (EP)’: (1) EP 100 Code of Professional Conduct and Ethics; and (2) EP 200 Anti-Money Laundering and Countering the Financing of Terrorism-Requirements and Guidelines for Professional Accountants in Singapore. EP 200 is mandatory for auditors who are under the supervision and oversight of ACRA. ISCA reports that EP 100 was revised (with national provisions) based on the 2015 IESBA Code of Ethics and is not yet aligned with the 2016 Code.
With the assistance of the ISCA Audit & Assurance and Ethics department, the Ethics Committee (EC) is responsible for the entire due process in the revision of the ISCA Code. If there are changes which involve sensitive or material matters impacting public accountants, or which may impact extant Singaporean provisions, the EC will consult ACRA’s PAOC Ethics Sub-Committee on the appropriate course of action. At the end of the process, the EC recommends the revised Code to the ISCA Council for approval.
ISCA supports its members by offering training through continuing professional development, seminars, and in addition, disseminating updates and pronouncements through its website and e-newsletters. ISCA is also active in the regional and international standard-setting process and responds to exposure drafts by the IESBA.
ISCA is encouraged to consider refining the SMO 4 section in its Acton Plan based on IFAC staff’s comments. ISCA is encouraged to clarify if there are plans to review and adopt the 2016 IESBA Code of Ethics, which includes the new NOCLAR standard, and establish plans to work toward aligning with the latest Code of Ethics for professional accountants. Given the NOCLAR standard is a significant, new framework and will require collaboration with several stakeholders in order to achieve proper implementation, ISCA is encouraged to clarify or consider if there are plans to develop activities to support implementation of the revised Code.
- SMO 5: International Public Sector Accounting Standards
Under the Accounting Standards Act, the Accounting Standards Council and the Accountant-General of Singapore is responsible for setting public sector accounting standards. Statutory bodies in Singapore are required to apply Statutory Boards Financial Reporting Standards (SB-FRS), which are accrual-based, and are considered generally consistent with International Public Sector Accounting Standards (IPSAS). Although the Singapore Financial Reporting Standards are the main guiding framework for SB-FRS, individual SB-FRS take into account, and are modified on the basis of, the unique context of the different statutory bodies. There are currently no plans to adopt accrual-based IPSAS.
For its part, ISCA reports that it has been active in promoting the IPSAS to the Singapore government and informing them about the work of the IPSASB where relevant. In addition, ISCA has also published news related to the IPSAS and IPSASB where relevant and has also previously arranged a meeting between the IPSASB and the government to discuss matters around the standards.
ISCA is encouraged to continue its efforts to promote the adoption of the IPSAS to the Singapore government. ISCA is also encouraged to consider highlighting more on the activities it is undertaking to support members who work in the public sector.
- SMO 6: Investigation and Discipline
The responsibility for the investigation and discipline (I&D) of public accountants in Singapore rests with the Public Accountants Oversight Committee (PAOC), operating under the authority of the Accounting and Corporate Regulatory Authority, and the ISCA.
Under the Accountants (Public Accountants) Rules, the PAOC is responsible for I&D procedures for public accountants who audit public interest entities (PIEs). ISCA’s I&D function covers all of its members including public accountants who do not audit PIEs. ISCA reports that its I&D system is aligned with the requirements of SMO 6.
ISCA actively promotes the rules and regulations of the institute to its members and the public by posting information on its website related to initiating a complaint and the complaint process. In addition, disciplinary action and sanctions handed out are also publicly available.
ISCA is encouraged to consider how it can enhance its SMO Action Plan by reviewing comments from IFAC staff in order to demonstrate examples of best practice as related to SMO 6 fulfilment. In addition, though ISCA has reported that its I&D system is aligned with SMO 6 requirements, the institute is encouraged to complete the self-assessment of its system to affirm compliance with the requirements.
- SMO 7: International Financial Reporting Standards
Under the Accounting Standards Act, the Accounting Standards Council is responsible for setting accounting standards in Singapore, which comprise a framework of national standards fully converged with the IFRS for listed companies and national standards closely modeled after IFRS and have been modified to contain a small number of country specific requirements.
Although ISCA is not responsible for the adoption of accounting standards, it has taken an active approach to supporting implementation by ensuring its members are kept up to date on developments on national and global accounting standards and that members have the necessary support to undertake their work. ISCA established the Financial Reporting and Technical Excellence department, part of its Corporate Reporting and Ethics division, to provide technical support on accounting matters for members. In addition, the department regularly communicates views and insights related to accounting issues to members and the wider accounting community in the jurisdiction. ISCA’s Financial Reporting Committee also regularly initiates and facilitates discussion on emerging accounting issues, issues guidance on emerging local accounting issues, reviews and responds to exposure drafts as issued by the IASB, and provides comment letters featuring the perspective from Singapore.
ISCA also supports its members by offering continuing professional development courses covering the latest accounting standards updates and disseminates financial reporting standards information on the ISCA Centre for Financial Reporting website and other publications.
ISCA is encouraged to consider or report on how it promotes the application of SFRS(I) for all public interest entities as part of its efforts to harmonize financial reporting in Singapore.
IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.