2009 - January
Adherence to Important Corporate Governace Standards
09 Jan 2009 Category: Media Releases
Corporate governance matters because the interests of shareholders and management may not be aligned. Good corporate governance can help increase shareholder value by safeguarding all shareholders’ interests and enhancing corporate performance. However, for corporate governance to be effective, boards, management and other players in the corporate environment must ensure that they do not adopt a mindset of merely complying with the ‘letter’ of corporate governance codes and rules – rather they should embrace the spirit of good corporate governance.
Institute of Certified Public Accountants of Singapore (ICPAS), through its Corporate Governance Committee, would like to reiterate the roles and duties of the various players in the corporate environment and the need for all to take their roles and duties seriously in order for corporate governance to deliver increased shareholder value. In recent publicity over the reporting of fraud by the statutory auditors, ICPAS acknowledges that the system of such reporting to the Minister is a sound Corporate Governance measure and applauds the action taken by the statutory auditors to invoke the provisions of the Companies Act, Section 207(9A).
Under Section 207 (9A) of the Companies Act, the auditor of a public company or a subsidiary of a public company is legally obliged to report to the Minister of Finance if the auditor believes that a serious offence involving fraud or other dishonesty had been committed against the company by officers or employees of the company.
The reporting of fraud to the Minister by the statutory auditor demonstrates the importance of how a proper whistle blowing mechanism could help strengthen corporate governance process.
Guideline 11.1 of the Singapore Code of Corporate Governance 2005 (“Code”) states that “the audit committee should comprise at least three directors, all non-executive, the majority of whom, including the Chairman, should be independent”. Guideline 11.2 of the Code adds that the Board should ensure that the members of the Audit Committee (AC) are appropriately qualified to discharge their responsibilities. At least two members should have accounting or related financial management expertise or experience, as the Board interprets such qualification in its business judgment.
ICPAS strongly supports the compliance with the Code for the reasons indicated above. The independence of AC members contributes an added layer of checks and balances on the work of the executive directors and management. Having AC members who are strong in financial literacy provides opportunities for more insightful review of the financial numbers. These factors contribute to greater stakeholder confidence in corporate governance and the financial reporting process, thus enhancing the robustness of the capital markets.
ICPAS strongly advocates best corporate governance practices and will continue to play an active role to protect the public interest by encouraging high quality practices by its members and continues to facilitate the convergence of national and international auditing standards. We expect our members to uphold the high standards they are entrusted with and to continually upgrade and update themselves given the range of opportunities and resources.
For more information, please contact:
Ms Catherine Chan
Tel: 65 6749 8060 Ext 813
Fax: 65 6749 8061
Ms Natalie Leung
About Institute of Certified Public Accountants of Singapore
Established in June 1963, the Institute of Certified Public Accountants of Singapore (ICPAS) is the national accountancy body that develops, supports and enhances the integrity, status and interests of the accountancy profession in Singapore.
The Certified Public Accountant Singapore (CPA Singapore) is a professional in accountancy, finance and business who has the relevant work experience in addition to a recognised accountancy qualification. They are highly versatile and well sought after as business leaders beyond the accountancy, banking and finance industries.
Today, the Institute of Certified Public Accountants of Singapore (ICPAS) has over 20,000 members and/or CPAs Singapore working and making their mark worldwide, which makes the CPA Singapore a designation with international recognition.
ICPAS’ international outlook and connections are reflected in its membership of regional and international professional organizations like the ASEAN Federation of Accountants (AFA), the Asia-Oceania Tax Consultants’ Association (AOTCA) and the International Federation of Accountants (IFAC).
About Singapore Accountancy Academy
The Singapore Accountancy Academy (SAA) was established in 1985, with a vision to service and foster the needs of the accountancy industry. It is the training arm of the Institute of Certified Public Accountants of Singapore.
The SAA has over 20 years track record and has consistently produced a list of prize-winners for the ACCA and Certified Accounting Technician programmes in the Singapore and International category. The Academy has trained thousands of individuals to upgrade their education and career needs through various academic and continuing professional education programs.
SAA also conducts training and professional development of ICPAS members through regularly run courses under the Continual Professional Education scheme.