Welcome Address by ISCA President Mr Kon Yin Tong at the virtual ISCA Practitioners Conference 2020 on 22 October 2020

Ladies and Gentlemen

Welcome to Practitioners Conference 2020.

A year ago, I delivered my welcome address to the audience at our conference venue at Marina Bay Sands. Then, it was the norm for delegates to attend conferences in person. Virtual conferences were rare then. Today, due to the COVD-19 pandemic, it is the norm to hold virtual meetings and conferences. Some of you may have logged in to our virtual conference from your office. Some of you may be attending the conference from the comfort of your home. We have all had to adapt to the evolving COVID-19 situation. It is not business as usual. The goalposts have shifted.

The audit profession has had to quickly adapt to new ways of working when what started as an infection rapidly turned into a global pandemic in March this year.  Over the last few months, many audit practices have taken immediate action to address the challenges arising from the crisis. They beefed up their ICT and cybersecurity infrastructure to enable their staff to telecommute while looking at ways to better manage their finances and cashflow.

Mr Alan Chang, Managing Director from OA Assurance is one example.  Alan tapped ISCA’s support and initiatives to digitalise his practice. With ISCA’s help, Alan’s firm successfully implemented audit software, enabling the firm to automate and streamline its audit workflow. In addition to yielding productivity benefits and time savings, the software came in especially useful amid this time of safe distancing measures and work from home arrangements. 

Other practitioners have stepped up to offer counsel and support to their clients, helping them to overcome the complexities arising from the crisis. In a way, the pandemic has created more opportunities for the profession to perform their role as trusted advisors to businesses and expand their services to include more advisory work.

As the saying goes, amid every crisis lies great opportunity. For better or worse, COVID-19 is here to stay for the foreseeable future. It is thus important that audit practices think beyond short-term responses and transform themselves to thrive in a post-COVID world.

The theme of today’s conference is “Strategising for a Resilient Tomorrow”. Our aim is to provide you with the tools and knowledge that will help you build resilience in your audit practices and thrive in challenging times, starting with a panel discussion on precisely this topic. Our panellists will share insights on how audit firms can respond to the COVID-19 crisis and pivot their practices for sustainability and growth.

COVID-19’s impact on financial reporting and audit is complex. With the pandemic, there is tremendous uncertainty about the economy and the future, impacting businesses in varying degrees. These present challenges, especially in areas such as assessment of going concern, impairment and fair values. Auditors will be challenged, especially in their professional judgment and professional scepticism.

Hence, 2020 audits will present new issues that may not have been encountered in prior audits.   To help you understand these issues, we will have a segment on the key audit challenges and implications from COVID-19 and how auditors can navigate the upcoming audit peak.

Today, we will also unveil the findings of our survey on the views of audit committee members regarding the provision of non-assurance services by auditors. In recent years, audit firms’ provision of

non-assurance services to audit clients has come up as an issue that is perceived to affect auditor independence. To gain clarity on the issues, ISCA surveyed Audit Committee members of Singapore companies to obtain their views on the matter as well as their opinion on ISCA’s recommendations to address these concerns.

We are pleased that in general, the survey findings support our recommendations.  We have highlighted the key recommendations to the International Ethics Standards Board for Accountants, for its consideration in its revision of the International Code of Ethics for Professional Accountants.  

ISCA’s Ethics Committee Chairman, Mr Tan Seng Choon will share more insights on the survey results later today. 

There will also be a presentation on the key findings from Accounting and Corporate Regulatory Authority’s Practice Monitoring Programme (or PMP). You will be able to learn about the good practices observed from ACRA’s PMP inspections, and the areas to focus on to enhance audit quality.

Our speakers will also share about the International Auditing and Assurance Standards Board’s (or IAASB) proposed work plan, the International Standard on Quality Management (or ISQM) 1 and ISQM 2, as well as the transition from the Sing-dollar Swap Offer Rate to a new interest rate benchmark – the Singapore Overnight Rate Average or SORA. We hope their sharing will spark new insights for you and equip you with the knowledge for what is ahead.

Our journey of supporting audit practices is an ongoing one and extends beyond the Practitioners Conference. Since the start of the pandemic, ISCA has proactively reached out to relevant government ministries and agencies to share sector-specific challenges arising from COVID-19. These include the challenges audit practices face in meeting filing datelines, and their difficulties in conducting audits and delivering services amid the COVID-19 restrictions.

To support the profession during this period, ISCA worked with the Singapore Accountancy Commission to publish several advisories so that audit firms can put in place appropriate safe management measures and work arrangements ahead.

Guided by ISCA’s Quality Assurance Framework, we will continue to roll out initiatives to support the audit profession. Since August last year, we have been advising small and medium-sized audit practices (or SMPs) in digitalisation via the virtual SMP Centre. The SMP Centre is a one-stop portal with information, tools and services to support SMPs in building productive and competitive businesses. Via the SMP Centre, SMPs can use the self-assessment toolkit to determine their digital readiness and use the digital and training roadmap to identify the digital solutions and training required for their stage of digital development.

Other initiatives to promote the digital transformation of SMPs and to create opportunities through upskilling and expansion to overseas markets for the SMPs will be rolled out in the next two years. ISCA is committed to supporting SMPs through these challenging times and we will continue to update and broaden our initiatives to boost SMPs’ digital and business capabilities. I strongly encourage SMPs to leverage ISCA’s support schemes to accelerate your audit practice’s digitalisation journey and bring it to the next level of growth.

The road ahead may have its challenges, but it also holds untapped opportunities. As the national accountancy body, ISCA will continue to support you on this journey.  

Businesses must continue, though they will have to change their business model. Many old models don’t work anymore. Unprecedented challenges presented by COVID-19 mean we must seize new opportunities and draw lessons from the pandemic to improve the value of our profession and transform the industry. This will place us in good stead for recovery and growth, especially in the post-pandemic era, by capitalising onagile processes or ‘frugal’ innovations. Many businesses may emerge or have emerged from this COVID timeout at ground zero.  From this foundation, they must rebuild and grow, by responding to the changing environment with adaptability and agility.  The alternative is to do nothing, change nothing – and be nothing.

Before I end my speech, I would like to thank the speakers and panellists for being part of this event. We are also grateful to our Guest of Honour Mrs Tan Ching Yee, Permanent Secretary for Finance, for taking time off her busy schedule to deliver the keynote address.

I wish everyone an enjoyable and fruitful session ahead.