2010 - August
Welcome Address by, Dr Ernest Kan, President of ICPAS at ICPAS Clarity Seminar (Part 1) - Clarified SSA200 Series and the Anti-Money Laundering Framework
16 Aug 2010 Category: Speeches
Introduction and Welcome
Good Morning, Ladies and Gentlemen,
On behalf of the Institute of Certified Public Accountants of Singapore , I would like to extend to each of you, a very warm welcome to today’s seminar. We are glad to have with us today, Ms Chua Jia Leng from the Commercial Affairs Department of the Singapore Police Force , who will be sharing about the topic of Money Laundering, and Mr Choo Eng Beng and Ms Ooi Chee Kar from PricewaterhouseCoopers Singapore as our speakers on the salient changes of Clarified SSAs 200 series. I would like to take this opportunity, on behalf of ICPAS to thank them for taking time out of their busy schedule to share their expert knowledge and valuable experiences with us in today’s seminar.
Salient Changes of Clarified SSAs
On 26 January 2010, ICPAS completed the updates to the Singapore Standards on Auditing (SSAs). The revisions to the standards are known as the Clarified SSAs, and its purpose is to provide greater clarity and enhancements to the standards to strengthen audit approaches and quality.
There are 36 newly updated and clarified SSAs, of which 20 are redrafted, 16 containing new and revised requirements and 1 new SSA to address the communication of deficiencies in internal control.
Background of Clarified SSAs
ICPAS is committed to the goal of developing a set of Singapore Standards that is benchmarked against the International Standards on Auditing (ISAs) set by the International Auditing and Assurance Standards Board (IAASB). The Clarified SSAs are not only developed based on the Clarified ISAs, which are the result of changes stemming from the IAASB Clarity Project, but they are literally taken word-for-word from the ISAs.
To give a brief background on the IAASB Clarity Project, it was an initiative led by the IAASB which began in 2004 and was completed in March 2009. The project involved a comprehensive review of all ISAs and International Standards on Quality Control to improve the clarity and consistent application of the standards. At ICPAS, we are constantly looking at how we can improve and update not only accounting standards, but auditing and assurance standards in tandem with the evolving environment. This change will provide significant improvements to audit quality and hence encourage a robust financial reporting process for companies in Singapore.
Key Changes in the Clarified SSAs
The final set of clarified Singapore Standards was issued on 26 January 2010, which is effective for audits of financial statements for periods beginning on or after 15 December 2009, which means by and large for FY 2010 financial statements, ie. For the FIRST time in this year’s audit. Some of the improvements which we will see are :
- clear identification of the auditor’s objectives,
- establishment of auditor’s obligation in relation to that objective,
- clarifications on the obligations imposed on auditors and the language used to communicate such requirements,
- elimination of any possible ambiguity about the requirements which an auditor needs to fulfill,
- improved overall readability and understandability arising from a new structure, and
- additional considerations specific to small- and medium-sized entities and public sector entities.
All in all, the amendments are aimed at making our standards clearer and updated to the rapidly changing and complex business landscape. For example, the clarified SSAs will specify clearly in a section by itself, the objectives of the auditor. This underpins SSA’s principle-based approach to setting standards, rather than a rule-based approach. In a financial and business hub like Singapore, the environment companies operate in is dynamic and constantly evolving. . Hence it is critical for auditing standards to be objective-oriented by laying the auditor’s key objectives and setting out what needs to be accomplished, then working towards achieving the objective, rather than setting out exhaustive detailed rules for the auditors.
Guidance on Clarified SSAs from ICPAS
To help our members and auditors better understand, adopt and implement the changes, and companies to appreciate its impact when their auditors apply in auditing them, ICPAS has planned and organised a series of seminars in the second half of 2010 to provide greater insight into the salient changes of the clarified SSAs. Our Clarity Project 2010 Roadmap sets out ICPAS’s plans with respect to the SSA revisions. In March 2010, we had our Technical Group Discussion on the topic “Auditing in the Recovering Economy and the Implications of the Clarified SSA 200, 700, 705 and 706”. Following that in May 2010, we released an article called “Clarified SSAs – Unclear in the Past?” In July 2010, we issued a technical publication on Clarified SSA 600 and held a separate Technical Group Discussion focusing on SSA 600.
Much had been done as mentioned above in recent months by ICPAS, but however, Today, we are here for our very first Clarity Seminar on Clarified SSAs 200 series. This month, we will also be holding our next Technical Group Discussion on Clarified SSAs 320, 450, 505 and 550. From now till the end of year, we have a series of Clarity Seminars and Technical Group Discussions lined up to help ICPAS members and those who have strong interest in appreciating the transition to the clarified standards.
At the same time, ICPAS will continue to look into the practical issues in implementation and provide Clarity Guidance to members to address the change and challenges faced within the profession. We will be sharing with you more information on the Clarity Guidance in our next Clarity Seminar.
On a related note, today we will also be looking at the topic of money laundering. Money laundering has significant implications for the accounting and auditing industry. It is a serious white collar crime, which involves putting money through a series of financial transactions such as, via offshore accounts, or laundering money, so to speak, in order to conceal its illegal origins. Especially with the increase in financial transactions in a global market, it has become easier for money launderers to commit crimes. It is hence critical for auditing and accounting professionals to be able to understand, detect or prevent such transactions from taking place, as, if not prevented or detected at the onset, could strongly undermine the ethical, auditing and accounting standards in Singapore.
About Guest Speakers at Today's Seminar
Today, we have invited Ms Chua Jia Leng to be our guest speaker on the topic of money laundering and its implications to the accountancy sector. Ms Chua is the Head (Policy & External Liaison), Suspicious Transaction Reporting Office, from the Commercial Affairs Department of the Singapore Police Force. In CAD, Ms Chua has had vast experience dealing with white collar crime, having held appointments in money laundering, terrorism financing and corporate fraud investigation. Following that, Mr Choo Eng Beng and Ms Ooi Chee Kar, Assurance Partners at PricewaterhouseCoopers, will speak on the first series of ICPAS Clarity seminars to help members understand the clarified SSAs. They will be sharing the salient changes of Clarified SSAs 200 series and its implications on audits of entities of all sizes.
In closing, as this is the first year of adopting the Clarified SSAs, I urge practitioners to read and understand the key changes of the Clarified Standards, and thereafter, incorporate the new provisions of the standards into the audit process. It is imperative that the auditing profession in Singapore is kept up to date and that firms adopt a consistent approach when performing field work so as to reflect our commitment to “best practices” and achieve high quality audit. The changes will have a practical impact on audits conducted in 2011 for the financial year ending 31 December 2010 and after. Hence, prior to the changes, audit professionals will have time to understand the salient changes and implications on their field audits as well as incorporate these changes into their training programs. ICPAS has taken the initiative in such practice development with the series of Clarity Seminars lined up. Please look out for the series coming up in the next few months.
I hope you enjoy today’s seminar and wish you a fruitful and productive day ahead! Thank you.