Clarification on Appropriate Signing Convention for Reports Issued under the Assurance, Review and Related Services Frameworks.
Clarification on Appropriate Signing Convention for Reports Issued under the Assurance, Review and Related Services Frameworks
ISCA wishes to clarify on the appropriate signing convention for reports issued under the assurance, review and related services frameworks, i.e. reports prepared in accordance with the Singapore Standards on Assurance Engagements (SSAEs), Singapore Standards on Review Engagements (SSREs) and Singapore Standards on Related Services (SSRSs) respectively, as follows:
Reports issued under the assurance (SSAEs) and review (SSREs) frameworks shall only be signed by a public accountant1.
Reports issued under the related services framework (SSRSs) shall only be signed by a professional accountant who:
The professional accountant may or may not be a public accountant.
In addition, engagements within the scope of public accountancy services as defined in the Accountants Act 2004 performed under the SSRSs shall be signed by a public accountant.
Reports issued under the SSAEs, SSREs or SSRSs shall be signed by an appropriate signatory, as clarified above, if they are dated on or after 1 January 2015.
Reports issued under assurance or review frameworks
Only a public accountant can sign reports issued under the assurance or review frameworks as some form of assurance (reasonable/limited) is expressed in the reports for engagements performed under SSAEs and SSREs. This would be a consistent approach as only public accountants can sign the auditor’s reports of financial statements, which provide reasonable assurance.
Reports issued under the related services framework
Only a professional accountant who (a) is in public practice and (b) holds the CA (Singapore) designation can sign reports issued under the related services framework. The professional accountant may or may not be a public accountant. In arriving at the above decision, ISCA considered the following options:
- Whether the SSRSs reports can only be signed by any professional accountant holding the CA (Singapore) designation but not in public practice; or
- Whether the signatory should be restricted to only public accountants.
Whether the SSRSs reports can be signed by any professional accountant
Although no assurance is expressed in SSRS reports, it would still require an individual to possess the necessary competence and skills to conduct engagements in accordance with the SSRSs. A professional accountant with the CA (Singapore) designation is deemed to have attained the relevant proficiencies required.
Notwithstanding the above, it is appropriate to allow only those professional accountants who are in public practice to sign SSRSs reports, rather than any professional accountant with the CA (Singapore) designation3 for the following reasons:
- An SSRS report is within the scope of the Singapore Standard on Quality Control (SSQC) 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements. This means that an SSRS report is contemplated to be performed within a firm which has quality controls stipulated by the SSQC 1 and that is achievable only by professional accountants in public practice, given that a professional accountant in public practice is, by definition, a professional accountant in a firm that provides professional services or a firm of professional accountants in public practice.
- The International Standards on Related Services (ISRSs), issued by the International Auditing and Assurance Standards Board (IAASB) for which SSRSs are based on, use the term “practitioner” in the signing convention in the illustrative reports. “Practitioner” is defined as “a professional accountant, irrespective of functional classification (for example, audit, tax or consulting) in a firm that provides professional services”, i.e., a professional accountant in public practice. Hence, ISCA’s decision would be consistent with international practices.
Whether the SSRS reports can only be signed by public accountants
ISCA also deliberated and concluded that the signatory should not be restricted to only public accountants for the following reasons:
- No assurance is expressed in reports for engagements performed under the SSRSs.
- The requirement for only public accountants to sign such reports may come across as self-serving on the part of public accountants and viewed as an anti-competitive practice.
- It is more appropriate to adopt a market-led approach where firms that provide professional services and their clients determine the nature of work performed which will in turn determine the appropriate signatory for their reports.
Amendments to affected pronouncements arising from the clarification
In view of the clarification on the appropriate signatory, amendments have been made to the relevant affected pronouncements:
- The clarification on the signing convention is added to the cover pages of the SSAEs, SSREs and SSRSs;
- The signing conventions in the illustrative reports in the Appendices have been amended; and
- Related definitions have been added to the Glossary of Terms.
The affected pronouncements are as follows:
SSAE 3000, Assurance Engagements Other Than Audits or Reviews of Historical Financial Information
SSAE 3400, The Examination of Prospective Financial Information
SSAE 3402, Assurance Reports on Controls at a Service Organization
SSAE 3410, Assurance Engagements on Greenhouse Gas Statements
SSAE 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus
SSRE 2400, Engagements to Review Historical Financial Statements
SSRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity
SSRS 4400, Engagements to Perform Agreed-upon Procedures Regarding Financial Information
SSRS 4410, Compilation Engagements
AGS 1, Sample Independent Auditor's Reports
1 A public accountant is a person who is registered or deemed to be registered in accordance with the Accountants Act 2004 as a public accountant.
2 A professional accountant in public practice is a professional accountant, irrespective of functional classification (for example, audit, tax or consulting) in a firm that provides professional services. Professional services are professional activities requiring accountancy or related skills, including accounting, auditing, taxation, management consulting, and financial management.
3 For example, a professional accountant with the CA (Singapore) professional designation conferred by ISCA who is (i) a professional accountant in business; (ii) employed in a firm providing other services such as legal services; or (iii) unemployed, would not be allowed to sign SSRSs reports.