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    Country by Country Financial Reporting and Auditing Framework

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    Singapore – Crowe Horwath First Trust LLP (prepared May 2014)

     

    Preparation of and Filing of Statutory Financial Statements

     

    Both local and foreign companies (an incorporated subsidiary or registered branch) in Singapore are subject to annual filing requirements from Accounting and Corporate Regulatory Authority of Singapore (ACRA) and Inland Revenue Authority of Singapore (IRAS).  The Annual return must be filed with ACRA within one month after the Annual General Meeting (AGM) and the annual tax return must be filed with IRAS by November 30. For a public company listed or quoted on a securities exchange in Singapore, the accounts presented at the AGM shall be made up to a date not more than 4 months before the AGM; in the case of any other company, the accounts presented at the AGM shall be made up to a date not more than 6 months before the AGM.

     

    Filing Requirements 

    Definition

    Solvent - able to meet its debts when they fall due

    Insolvent -not able to meet its debts when they fall due

    Small EPC1  

    EPC with annual revenue up to S$5 million or less for financial years with effect from 1 June 2004 (S$2.5 million or less for financial years between 15 May 2003 and before 1 June 2004)

    • need not audit accounts
    • need not attach accounts; to complete an online declaration of solvency instead

    • need not audit accounts
    • must file accounts

    Normal EPC 1

    EPC with annual revenue more than S$5 million for financial years with effect from 1 June 2004 (or more than S$2.5 million for financial years with effect from 15 May 2004 but before 1 June 2004)

    • must audit accounts
    • need not attach accounts; to complete an online declaration of solvency instead

    • must audit accounts
    • must file accounts

    Dormant 2 EPC

    EPC that do not have any accounting transactions (no business activities) for the financial year concerned or have not commenced business since incorporation.

    • need not audit accounts
    • need not attach accounts; to complete an online declaration of solvency instead

    • need not audit accounts

    Private Company 
    (Non EPC)

    A company limited by shares with at most 50 shareholders

    Active
    • must audit accounts
    • must file accounts

    Dormant 2
    • need not audit accounts
    • must file accounts

     

    Public Company

    • A company limited by shares where the number of shareholders can be more than 50
    • A company limited by guarantee
    • Listed company on SGX

    Active
    • must audit accounts
    • must file accounts

    Dormant 2
    • need not audit accounts
    • must file accounts

     

    Groups of companies are required to prepare consolidated financial statements. FRS 110 permits a parent not to present consolidated financial statements if it is a wholly-owned subsidiary, or is a partially-owned subsidiary of another entity at the end of its financial year. In addition, the ultimate or any intermediate parent of that entity produces consolidated financial statements available for public use, which comply with FRS or IFRS.

     

    Financial Reporting Framework

     

    All Singapore-incorporated companies must comply with Singapore Financial Reporting Standards (FRS), except as explained below.

     

    FRS are closely modelled after the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board, and contain a small number of additional requirements specific to Singapore. The national accounting standards-setter, the Accounting Standards Council (ASC) is working towards full convergence of the FRS with the IFRS for Singapore listed companies. 

     

    Foreign issuers listed on the Singapore Stock Exchange ("SGX") are allowed to prepare their financial statements filed based on FRS, or IFRS, or US Generally Accepted Accounting Principles ("US GAAP"). Currently, for a Singapore-incorporated listed company, it is permitted to use IFRS if it is also listed on another stock exchange that requires IFRS, as approved by SGX and notified to ACRA. On 29 May 2014, ASC announced that Singapore-incorporated companies listed on Singapore Exchange will apply a new financial reporting framework identical to the International Financial Reporting Standards in 2018.

     

    ASC has also issued a separate set of accounting standards for use by smaller entities in Singapore, i.e. "Singapore Financial Reporting Standard for Small Entities" ("SFRS for Small Entities"), which is adopted from the International Financial Reporting Standard for Small and Medium-sized Entities.  Effective for accounting periods beginning on or after 1 January 2011, eligible entities have the option to apply the SFRS for Small Entities or to continue to apply the full set of FRS.

     

    An entity is eligible to use the SFRS for Small Entities if:

     

    1. It is not publicly accountable; and
    2. It publishes general purpose financial statements for external users; and
    3. It is a small entity (meets at least two of the three following criteria):
    • Total annual revenue of not more than S$10 million
    • Total gross assets of not more than S$10 million;
    • Total number of employees of not more than 50.

     

     

    In addition to prescribing accounting standards for companies, ASC will also prescribe accounting standards for charities, co-operative societies and societies. The ASC is responsible only for the formulation and promulgation of accounting standards. The monitoring and enforcement of compliance with accounting standards will remain the prerogative of the respective regulators, viz. ACRA for companies, Commissioner of Charities for charities, Registrar of Co-operative Societies for co-operative societies and Registrar of Societies for societies.


     

    Audit Requirements for Companies registered in Singapore

     

    As listed above, normal EPC and active non-EPC Companies are required to lodge audited financial statements with respective regulators.

     

    Audit Appointment, Rotation and Joint Audits

     

    Audit appointments in Singapore shall be made within 3 months from the date of incorporation of the company, unless it is exempted from audit requirements under the Companies Act. Auditors in Singapore normally hold office until the next annual general meeting of their client company. They may be appointed or removed at any time. Singapore does not currently have any rules relating to mandatory rotation of audit firms but there are guidelines within the ethical standards to consider familiarity threats in relation to partner rotation for public interest entities. According to Singapore Listing Manual - Chapter 713, for listed companies, the audit partner must not be in charge of more than 5 consecutive audits for a full financial year. The audit partner may return after two years.  

     

    In Singapore, joint audit arrangements are not common.

     

    Auditing Standards 

     

    Crowe Horwath First Trust LLP, the Singapore member firm of Crowe Horwath International is required to undertake their audit and express an opinion on the financial statements in accordance with applicable law and auditing standards. Those standards mainly refer to Singapore Standards on Auditing issued by the Council of the Institute of Singapore Chartered Accountants (formerly known as Institute of Certified Public Accountants of Singapore). They are based on the International Standards on Auditing of the International Auditing and Assurance Standards Board, published by the International Federation of Accountants.

     

    Auditing standards in Singapore require an audit firm to establish a system of quality control designed to provide it with reasonable assurance that the firm and its personnel comply with professional standards and regulatory and legal requirements, and that audit reports issued by the firm or engagement partners are appropriate in the circumstances.

     

    Ethical Framework

     

    Crowe Horwath First Trust LLP is bound by the ACRA Enhanced Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (the "Enhanced Code") under the Accountants (Public Accountants) Rules 2004 of the Accountants Act. The Enhanced Code, effective 1 August 2009 is based on the "Code of Ethics for Professional Accountants" published by the International Federation of Accountants (IFAC). As a firm of public accountants, we are also members of Institute of Singapore Chartered Accountants (ISCA), accordingly the firm and its personnel must adhere to the Code of Professional Conduct and Ethics (ISCA Code), which is based on IFAC Code 2006 and ACRA Enhanced Code.    

     


     

    Audit Regulation

     

    Crowe Horwath First Trust LLP is subject to the following external and internal monitoring processes with regard to their audit practice.

     

    External Monitoring

     

    The firm is subject to external review by ACRA under the Practice Monitoring Programme (PMP) for the entities audited by the firm. The inspections are generally performed every 2 -3 years. Reports on individual firms are not publicly available; however, the annual report on their inspection programme, summarising their findings across the profession as a whole, is available from their website. ACRA is the national regulator of business entities and public accountants in Singapore and also plays the role of a facilitator for the development of business entities and the public accountancy profession. In addition, the firm, being a member firm of Crowe Horwath International (CHI), undergo quality assurance review on a voluntary 2 year cycle by CHI.

     

    Internal Quality Control

     

    The firm has designed and implemented a system of internal quality control and relies on every partner and professional staff at all levels to uphold the high quality standards adopted by the firm. The firms has allocated sufficient resources to support areas of audit quality through dedicated functions such as training and technical (including audit methodology development), risk management and quality assurance. To ensure that engagements meet the quality standards of the firm, the firm has established quality review processes, involving a Risk Management Committee and EQCR's review as necessary for certain engagements. The firm has dedicated quality assurance resources to perform internal reviews of selected completed engagement files on an annual basis. These inspection and review outcomes will be used to identify deficiencies and training needs and enable changes to be made as required. 



    1 Exempt Private Companies (EPC): An Exempt Private Company (EPC) is a private company which has at most 20 shareholders. No corporation holds (directly or indirectly) any beneficial interest in the EPC's shares. It can also be a company the Minister has gazetted as an EPC.

     2 A company is considered dormant during a period in which no accounting transaction occurs.

     

     


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