International Federation of Accountants

Singapore

Member Organizations

Member Organization Associate

  Institute of Singapore Chartered Accountants

Legal and Regulatory Environment

  • Overview of Statutory Framework for Accounting and Auditing

    The Singapore Companies Act outlines the framework for financial reporting in Singapore. This law requires the maintenance of company accounts and requires all companies (except certain exempt companies) to have their financial statements audited.

    Accounting Framework

    Under the Accounting Standards Act, the Accounting Standards Council (ASC) is responsible for setting accounting standards in Singapore.

    The ASC issues the Singapore Financial Reporting Standards (International) (SFRS(I)), which are fully converged with the International Financial Reporting Standards (IFRS) and as of January 1, 2018, the standards apply to all companies listed on the Singapore Stock Exchange (SGX).

    All other companies are required to apply the Singapore Financial Reporting Standards (SFRS), also developed by the ASC. The SFRS are closely modeled after IFRS and are modified to contain a small number of country specific requirements. Non-listed companies are also permitted to apply SFRS(I) as an alternate framework to the SFRS. An exception applies to charities who are required under the Charities Act to apply SFRS or the Charities Accounting Standard, developed and issued by the ASC. Prior to the issuance of SFRS(I), a provision had existed that allowed Singapore companies (both listed and non-listed) to apply IFRS if permission was granted by the Accounting and Corporate Regulatory Authority of Singapore (ACRA).

    Foreign companies listed on the Singapore Stock Exchange are permitted to prepare their financial statements based on SFRS(I), SFRS, or IFRS, or US Generally Accepted Accounting Principles (US GAAP). Additionally, Singapore-incorporated listed companies are permitted to use IFRS if they are also listed on another stock exchange that requires IFRS.

    The ASC also issues Singapore Financial Reporting Standard for Small Entities (SFRS for Small Entities). This is a separate set of accounting standards for use by smaller entities in Singapore which is adopted from the IFRS for SMEs. Small entities in Singapore have the option of using SFRS for Small Entities or they can also apply SFRS(I) and SFRS.

    Auditing Framework

    In Singapore, all companies are to be audited unless they meet two of three exemption criteria also known as “Audit Exemption for Small Companies.” These criteria include: (1) total annual revenue does not exceed SGD 10 million during the financial year; (2) total assets do not exceed SGD 10 million as at financial year end; and (3) number of employees does not exceed 50 as at financial year end.

    All other companies are required to be audited following the Singapore Standards on Auditing (SSA) which are the ISA as issued by the International Auditing and Assurance Standards Board (IAASB) with minor modifications to reflect local legal requirements where appropriate.

    The Institute of Singapore Chartered Accountants (ISCA) through its Auditing and Assurance Standards Committee (AASC) is responsible for setting auditing standards in Singapore. As part of the standard-setting process, the AASC submits the SSA to the ISCA Council for review before submitting the standards to the Public Accountants Oversight Committee, under ACRA for final approval.

  • Regulation of Accountancy Profession

    In Singapore, the Singapore Accountancy Commission, established under the Singapore Accountancy Act, is a statutory body of the Singapore government that oversees the strategic direction and promotion of the accountancy sector while the Accounting Corporate Regulatory Authority (ACRA), established by the Accounting and Corporate Regulatory Authority Act, is responsible for regulating public accountants in Singapore.

    Under various sections of the Accountants Act, the Accountants (Public Accountants) Rules, and the Accounting and Corporate Regulatory Authority Act, the Public Accountants Oversight Committee (PAOC), operating under ACRA, is authorized to oversee all matters related to the registration of public accountants in Singapore. The PAOC is also responsible for administering a quality assurance (QA) mechanism, called the Practice Monitoring Program, executing an investigative and disciplinary (I&D) mechanism, setting ethical requirements for public accountants (all auditors and audit firms of public interest entities (PIEs)) , approving the adoption of auditing standards as developed by the Institute of Singapore Chartered Accountants (ISCA) Auditing and Assurance Standards Committee, and administering continuing professional development (CPD) programs for public accountants.

    In Singapore, only a public accountant or an accounting entity approved by ACRA can conduct audits of financial statements. As a prerequisite to registering as a public accountant with ACRA and practicing as an auditor, individuals must be a Chartered Accountant (CA) and a member of ISCA. This requirement and the use of the CA designation is protected under the Singapore Accountancy Commission Act, which outlines additional provisions related to the registration and discipline of holders of this designation. Registration as a public accountant is also required for other services that, by law, must be conducted by a public accountant; for example, appointment as a judicial manager under the Accountants Act. There is no requirement to register as a public accountant to provide other accountancy services in Singapore, such as accounting, tax and corporate advisory work, unless a law indicates that a public accountant must perform the task. Membership of ISCA is therefore voluntary for all other professional accountants.

    ISCA is the national professional accountancy organization and its responsibilities include: setting auditing standards to be applied in Singapore, setting ethical requirements to be observed by its members, administering the Singapore Chartered Accountant Qualification, establishing CPD requirements that all members are required to adhere to, and administering its I&D mechanism. ISCA also administers a voluntary QA review mechanism that members are encouraged to participate in to ensure quality of work conducted. Work conducted by public accountants who are members of ISCA but audit non-public interest entities are reviewed by ISCA under the direction and authority of the PAOC. Reviews of these members are shared with the PAOC for additional action.

  • Audit Oversight Arrangements

    The Accounting Corporate Regulatory Authority (ACRA), established by the Accounting and Corporate Regulatory Authority Act, serves as the independent audit oversight authority in Singapore.

    Under various sections of the Accountants Act, the Accountants (Public Accountants) Rules, and the Accounting and Corporate Regulatory Authority Act, the Public Accountants Oversight Committee (PAOC), operating under ACRA, is authorized to oversee all matters related to the registration of public accountants in Singapore. The PAOC is also responsible for administering its quality assurance (QA) mechanism, called the Practice Monitoring Program, executing an investigative and disciplinary mechanism, setting ethical requirements for public accountants, approving the adoption of auditing standards as developed by the Institute of Singapore Chartered Accountants (ISCA) Auditing and Assurance Standards Committee, and administering continuing professional development programs for public accountants.

    In Singapore, only a public accountant or an accounting entity approved by ACRA can conduct audits on financial statements. As a prerequisite to registering as a public accountant with ACRA and practicing as an auditor, individuals must be a Chartered Accountant (CA) and a member of ISCA. This requirement and the use of the CA designation is protected under the Singapore Accountancy Commission Act, which outlines additional provisions related to the registration and discipline of holders of this designation. Registration as a public accountant is also required for other services that, by law, must be conducted by a public accountant; for example, appointment as a judicial manager under the Accountants Act.

    ACRA is a founding member of the International Forum of Independent Audit Regulators and the ASEAN Audit Regulators Group.

  • Professional Accountancy Organizations

    The Institute of Singapore Chartered Accountants (ISCA) was established in 1963 and is recognized under the Singapore Accountancy Commission Act. ISCA’s responsibilities include: setting auditing standards to be applied in Singapore, setting ethical requirements to be observed by its members, administering the Singapore Chartered Accountant Qualification, establishing CPD requirements for its members, and administering its investigative and disciplinary mechanism. ISCA also administers a voluntary quality assurance review mechanism that members are encouraged to participate in to ensure quality of work conducted. Membership with ISCA is mandatory to register as a public accountant and to practice as an auditor in Singapore. Membership is voluntary for all other professional accountants.

    In addition to being a Member of IFAC, ISCA is also a full member of the ASEAN Federation of Accountants.

Adoption of International Standards

  • 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, and the Institute of Singapore Chartered Accountants (ISCA).

    In accordance with the Accountants Act, all auditors and audit firms of public interest entities (PIEs) are subject to mandatory QA reviews under the Practice Monitoring Program (PMP), which is administered by the PAOC. The scope of PMP reviews are to verify whether auditors and audit firms have complied with applicable standards—such as the Singapore Standard on Quality Control (SSQC) 1, which is based on ISQC 1, and Singapore Standards on Auditing (SSA), which is based on the ISA—and procedures and requirements in the provision of public accountancy services. The PMP is aligned with SMO 1 requirements.

    For inspections of audits of non-PIEs, the PAOC delegates PMP review responsibilities to ISCA’s Practice Monitoring Division. QA conducted by ISCA is aligned with SMO 1 requirements.

    Current Status: Adopted

  • 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 public 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 (ACRA), and the Institute of Singapore Chartered Accountants (ISCA). ISCA reports that education requirements in Singapore are aligned with the 2015 revised IES.

    To become a Chartered Accountant in Singapore, individuals are required to complete the Singapore Chartered Accountant (CA) Qualification administered by ISCA. The Singapore CA Qualification was developed based on a learning outcome approach and the learning outcomes have been updated based on the revised IES. In addition to the Singapore CA Qualification, which consists of different educational modules, individuals are also required to complete practical experience requirements. Those that choose to become public accountants (auditors) are required to hold membership with ISCA and register as a public accountant with ACRA. ACRA requires 2,500 hours of experience within a five-year period prior to applying for a license to practice as an auditor.

    Both ACRA and ISCA have established CPD requirements. ACRA requires all public accountants to complete 120 hours of CPD every three years to maintain a license to practice in Singapore. ISCA members who are public accountants registered with ACRA are to comply with ACRA’s requirements. Other non-public accountant members of ISCA are also subject to the same requirements as public accountants.

    Current Status: Adopted

  • 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 in Singapore through its Public Accountants Oversight Committee (PAOC).

    Under the Companies Act, all companies in Singapore are to be audited unless they meet exemption criteria.

    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 Institute of Singapore Chartered Accountants (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.

    Current Status: Partially Adopted

  • Code of Ethics for Professional Accountants

    In Singapore, both the Accounting and Corporate Regulatory Authority (ACRA) and the Institute of Singapore Chartered Accountants (ISCA) are responsible for establishing ethical requirements for professional accountants.

    Under the Accounting and Corporate Regulatory Authority Act, ACRA is responsible for setting ethical requirements for public accountants and its Code is aligned with the 2016 IESBA Code of Ethics.

    ISCA issues the ISCA Ethics Pronouncement (EP) 100 Code of Professional Conduct and Ethics (the ISCA Code) and members of the institute (both public accountants and non-public accountants) are required to adhere to the ISCA Code. This Code is developed in line with the 2016 IESBA Code of Ethics and encompasses any Singapore provisions to reflect the local legal and regulatory environment. ISCA reports that the Non-Compliance with Laws and Regulations (NOCLAR) pronouncement and the 2018 IESBA Code are being reviewed for adoption. It is expected that the NOCLAR will be effective January 2020. In August 2017, ISCA reported that it had issued changes to certain provisions in the ISCA Code related to Long Association of Personnel with an Audit or Assurance Client. These updates are effective December 15, 2018 onwards.

    Current Status: Partially Adopted

  • International Public Sector Accounting Standards

    Under the Accounting Standards Act, the Accounting Standards Council, the Accounting Standards for Statutory Board, and the Accountant-General of Singapore are 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 elements from the International Public Sector Accounting Standards (IPSAS) and the International Financial Reporting Standards (IFRS). Although Singapore Financial Reporting Standards are the main guiding framework for SB-FRS, individual SB-FRS consider and are modified based on the unique context of the different statutory bodies.

    There are currently no plans to adopt accrual-based IPSAS.

    Current Status: Partially Adopted

  • Investigation and Discipline

    The responsibility for the investigation and discipline (I&D) of professional accountants in Singapore rests with the Public Accountants Oversight Committee (PAOC), operating under the authority of the Accounting and Corporate Regulatory Authority (ACRA), and the Institute of Singapore Chartered Accountants (ISCA).

    Under the Accountants Act, the PAOC is responsible for I&D procedures for public accountants who audit public interest entities (PIEs). PAOC’s I&D mechanism is linked to the Practice Monitoring Programme (PMP) which is the quality assurance function of ACRA. Public accountants who failed to comply with PAOC orders arising from the PMP would be liable for disciplinary actions by both the PAOC and ACRA. The PMP is aligned with the best practices of SMO 6.

    ISCA’s I&D function covers all members which includes both public and other professional accountants. The Singapore Accountancy Commission Act provides ISCA the right to inform SAC of any complaint received against any of its members who are Chartered Accountants in Singapore, and ISCA’s website outlines its I&D process. Additionally, ACRA requires ISCA to submit all reports for non-PIE reviews under the PMP program carried out by ISCA to ACRA’s Practice Monitoring Sub-Committee (PMSC). ISCA reports that its I&D system is aligned with the requirements of SMO 6.

    Current Status: Adopted

  • International Financial Reporting Standards

    Under the Accounting Standards Act, the Accounting Standards Council (ASC) is responsible for prescribing accounting standards to be applied in Singapore.

    Accounting standards issued by ASC are:

    Singapore Financial Reporting Standards (International) (SFRS(I)) and SFRS

    SFRS(I) are equivalent to the International Financial Reporting Standards (IFRS) issued by the IASB. The following entities are required to apply SFRS(I) for annual periods beginning on or after 1 January 2018: Singapore and foreign companies listed on the Singapore Exchange (SGX) currently reporting under Singapore Financial Reporting Standards (SFRS); Registered Business Trusts currently reporting under SFRS; and Entities that would lodge prospectus with the Monetary Authority of Singapore (MAS) on or after 1 January 2018 for the purposes of issuing equity or debt instruments for trading on the SGX.

    Other entities in Singapore, such as Singapore-incorporated companies that are non-listed may apply SFRS or SFRS(I).

    The SFRS are substantially aligned with IFRS except for IFRIC 2 Members’ Shares in Co-operative Entities and Similar Instruments; and other modifications primarily to transition provisions and effective dates of the IFRS that were adopted. The non-adoption of IFRIC 2 does not affect Singapore-incorporated companies (both listed and non-listed).

    Singapore Financial Reporting Standard for Small Entities (SFRS for Small Entities).

    Like SFRS, SFRS for Small Entities are substantially aligned with IFRS for Small and Medium Entities. SFRS for Small Entities can only be used by entities that publish general purpose financial statements for external users and are not publicly accountable. In addition, they must meet the definition of a small entity for each of the previous two consecutive financial reporting periods by satisfying two of the three following criteria:

    • Total annual revenue of not more than SGD 10 million;
    • Total assets of not more than SGD 10 million; and
    • Total number of employees of not more than 50.

    Current Status: Partially Adopted

Disclaimer

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.

 

Methodology

Methodology
Last updated: 03/2020
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