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Guest of Honour Ms Indranee Rajah
Minister in Prime Minister's Office
Second Minister for Law, Finance and Education
Distinguished Guests
Ladies and Gentlemen
Good Morning
Technology is bringing transformative change
These are interesting times we live in. A robot has been given citizenship in Saudi Arabia.[1] The world’s largest accommodation provider, Airbnb, does not own any property.[2]A house can be purchased for only 4,000 US dollars in Texas, thanks to 3D printing technology.[3] Many have termed this period the Fourth Industrial Revolution. Revolution suggests drastic change and innovative transformation, and indeed technology has transformed and continues to transform many industries and facilitate the creation of new business models.
Transformation is ubiquitous. The accountancy profession is similarly transformed, and disrupted. As you have just heard from our presenters from EY, auditors must also grapple with the challenges of auditing crypto-assets like bitcoin.
Change is accelerating at an exponential pace, and like all other professions, we must prepare ourselves for an exponentially different future. Artificial Intelligence, once the domain of science fiction, is now a reality, and is utilised by companies including public accounting firms[4] in their work.
However, for all the advances that technology brings, it can be a double-edged sword. Cybercrime is today one of the world's fastest-growing and most lucrative industries. According to one global study, atleast $445 billion US dollars was lost last year, a 30 percent increase from three years ago.[5]
Cybersecurity risks are becoming increasingly prevalent and can pose immense challenges to organisations and even entire nations. Singapore, as a globally connected, highly digitalised economy, must be particularly vigilant against cybersecurity threats. The cost of a cyber attack goes beyond just financial losses, for it also carries reputational risk from the loss of public trust. This is especially so for Singapore, a global business hub and international financial centre.
ISCA is supporting the profession to be future-ready
Today, I am pleased to announce that ISCA, in collaboration with PwC, has developed a guidance, titled “Cybersecurity Risk Considerations in a Financial Statements Audit”.
The guidance demonstrates how cybersecurity threats and cyber-attacks can impact financial reporting and its audit implications. This is the first publication in Southeast Asia that provides guidance on cybersecurity risk considerations in a financial statements audit. The publication aims to provide more insights on how auditors should take cybersecurity risk into account as part of risk assessment during audit planning, as well as the appropriate response to any risk identified or cyber incidents that have happened.
In view of the increasingly important role that technology plays in business, ISCA will also organise the Technology Conference on 30th August to expose the local and regional accounting profession to more cutting-edge technology solutions for accounting and finance roles. There will be sessions with technology solutions providers to showcase how accounting professionals, including auditors, can harness technology to increase productivity and provide greater value.
In line with Singapore’s move towards a skills-based economy, ISCA launched ISCA Small and Medium Practice (or SMP) learning roadmap in January 2018. A similar learning roadmap for Professional Accountants in Business (or PAIB) will be developed. Designed to enable members to take charge of their career development, the learning roadmaps chart the recommended skills at each level and the learning opportunities available.
In today’s technology-driven era, new knowledge and skills in areas such as data analytics, cybersecurity, coding and blockchain are in demand. ISCA has been rolling out new CPE courses covering these topics.
The ISCA Audit Manual for Standalone Entities, which was updated last year, was well-received by members, especially those in SMPs. To further enhance audit quality and drive consistency among the audit profession when executing group audits, the Institute is developing an ISCA Audit Manual for Group Entities. The Manual will be developed based on the Singapore Standard on Auditing (SSA) 600 Special Considerations — Audits of Group Financial Statements (Including the Work of Component Auditors) and it is intended to help audit professionals understand and effectively apply SSAs on such audits. The manual is expected to be launched in the fourth quarter of this year.
ISCA is also helping SMPs build capabilities and improve productivity under the LEAD Programme by Enterprise Singapore. With LEAD funding, SMPs that adopt the “Audit Singapore” software to digitise their audit process can defray up to 70 per cent of adoption costs for two years. ISCA has since organised eight demo sessions on the Audit Singapore software, reaching out to more than 170 practitioners from 100 SMPs. To date, 12 firms and more than 180 users have signed up for the “Audit Singapore” software.
ISCA has also been supporting SMPs in their regionalisation efforts by organising overseas business missions. To date, we have organised mission trips to eight countries, including China, Myanmar, Australia and the UK.
It was also announced last week that ISCA is partnering Singapore Manufacturers Federation and Singapore Academy of Law to deliver digital project management services to help small and medium-sized law and accounting firms to go digital.
With these initiatives, we aim to support our all members in practice including SMPs in their transformation efforts to remain relevant and thrive in the future economy.
At this juncture, I would like to invite you to watch a video about a father and son team who are running two accounting practices, and how ISCA has been supporting them as in their technology adoption and business expansion goals.
Conclusion
It has been heartening to see how Chang Ching is continuing his father’s legacy and taking his accounting firm to greater heights. It is stories like this that spur ISCA to do even better to support the practitioners.
As Fook Chiew mentioned earlier, auditors must be a yardstick of quality. I encourage our practitioners to continue to strive towards excellence by acquiring new skills, harnessing technology and pursuing growth opportunities in the region.
May you have a fruitful session today.
[1] https://www.forbes.com/sites/zarastone/2017/11/07/everything-you-need-to-know-about-sophia-the-worlds-first-robot-citizen/#556b83e246fa
[2] https://thespaces.com/2017/08/15/airbnb-now-bigger-worlds-top-five-hotel-brands-put-together/
[3] https://www.fastcompany.com/40538464/this-house-can-be-3d-printed-for-4000
[4] https://www.forbes.com/sites/adelynzhou/2017/11/14/ey-deloitte-and-pwc-embrace-artificial-intelligence-for-tax-and-accounting/#4432c6163498
[5] https://www.nytimes.com/2018/05/20/business/banks-cyber-security-military.html