Welcome address by ISCA Chief Executive Officer Mr Lee Fook Chiew at the ISCA Auditing and Assurance Conference of Singapore Accountancy Convention 2014 at Heliconia Ballroom at Marina Bay Sands Convention Centre on 1 August, 2014
Distinguished speakers and panellists Ladies and Gentlemen Good morning,
1. Welcome to the ISCA Auditing and Assurance Conference, the conference that concludes the three-day Singapore Accountancy Convention 2014.
2. ISCA organised a conference solely dedicated to auditing and assurance because we recognise its importance in the current business environment. Auditors form a crucial part of the regulatory infrastructure in the overall financial reporting ecosystem. An audit remains the only means of carrying out an independent review of financial statements. Without an assurance from an audit, investors and other interested parties would have to deal with an increased level of accounting risk. Among other implications, this may reduce businesses’ access to capital and/or result in a higher cost of capital. Auditors therefore play a key role in protecting public interest by helping to maintain the effective and efficient functioning of financial and capital markets.
3. Large-scale financial scandals such as the collapse of Enron and the turbulence created by the global financial crisis have drastically altered the business environment in which auditors operate. The audit profession needs to continually keep pace with changes in regulations, auditing requirements, business conditions, and financial reporting standards, all of which contribute to an increasingly complex audit landscape and an increased emphasis on the quality of audit.
4. Today’s conference is thus structured around two main themes. In the first half, speakers and panellists will explore how the audit profession should evolve to remain relevant in “Staying on the Cutting Edge: The Road Ahead for the Auditing Profession”. In the afternoon, we will take a closer look at the complex subject of audit quality in “Quality Counts: Scaling New Heights”. These two broad themes cover vital issues facing the audit profession today.
5. For audit to remain relevant and play a key role in the value creation process, the profession needs to expand its role. Auditors need to focus not just on the financial results but also on other aspects such as risks and governance. They have to look at not just numbers but are also expected to pay attention to qualitative information such as narratives in annual reports. Only then will the audit profession be able to deliver more value and communicate more effectively to stakeholders. The evolving changes would mean a stronger audit process, and a more relevant and meaningful output delivered to users of financial statements.
6. The audit profession also needs to move beyond its traditional role of providing assurance and demonstrate its ability to add strategic value. In line with this, there has been progress towards a more holistic, integrated form of stakeholder communication via Integrated Reporting or in short, < IR>. <IR> is fast gaining traction globally. To stay ahead of the curve, it pays for auditors to start thinking about this now. <IR> is fast gaining traction as a new norm for communicating corporate information and corporate social responsibilities. It aims to integrate all the key elements of a business; going beyond performance reporting to provide a holistic picture of how the organization works with its resources, its stakeholders and other players in the ecosystem, to deliver the desired outcomes. With the release of the International Integrated Reporting Framework in December 2013, <IR> will soon play a major role on the corporate reporting front. As <IR> takes off globally, there is an opportunity for the Singapore accountancy profession to lead the transformation and be a pioneer of the corporate reporting evolution in the region. For this reason, ISCA held the Integrated Reporting Forum two days ago, as part of this year’s Singapore Accountancy Convention. <IR> will also be part of the discussion today.
7. Audit quality is a complex issue which requires the cooperation and collaboration of diverse key stakeholders. Recognising this, ISCA has initiated several initiatives, such as Technical Clinics, seminars, Practical Audit Workshop and the Quality Assurance Review programme to help the profession enhance audit quality.
8. Globally, the International Auditing and Assurance Standards Board (IAASB) has developed a Framework for Audit Quality that describes the factors that contribute to audit quality at the engagement, audit firm and national levels. I am sure Professor Arnold Schilder will refer to the Framework later during his presentation. Our speakers and panellists will also be sharing their insights on enhanced auditor reporting lessons learnt from past reported fraud cases in relation to addressing fraud risk, common pitfalls in litigation support engagements, as well as the application of professional scepticism.
9. We are indeed privileged to have many of the foremost subject matter experts in audit and assurance, locally and globally, to share their views with us today.
10. May you leave the conference today with greater insights and be inspired to lead the change for the audit profession. Have a fruitful session.