2011 - September
Welcome Speech By Dr Ernest Kan, President, Institute Of Certified Public Accountants Of Singapore, At The ICPAS- ICAEW EC Green Paper On Audit Policy Forum,On 9 September 2011, At The Pan-Pacific Hotel, Pacific 3 Function Room
09 Sep 2011 Category: Speeches
Mr Michael Izza, Chief Executive, Institute of Chartered Accountants in England and Wales (ICAEW)
Ladies and Gentlemen,
On behalf of the Institute of Certified Public Accountants of Singapore, I am proud and delighted to extend a warm welcome to all of you, to the ICPAS- ICAEW EC Green Paper on Audit Policy Forum.
The world economy is integrated and interconnected beyond geographical boundaries. There are mounting concerns that the US economy might slide back into recession and Europe’s sovereign debt crisis could worsen. Recently, the Ministry of Trade and Industry (MTI) has revised the growth forecast for Singapore to 5-6%, lower than the initial projection of 5-7%.
To a certain extent, this feels eerily familiar as the recent global financial crisis in 2008 and Lehman Brothers collapse remain fresh on our minds.
If there is one thing that the crisis has taught us, it is that investor confidence is a fragile construct and that once lost, would have an overwhelmingly adverse effect on companies and economies.
THE IMPORTANCE OF AUDIT FUNCTION
The recent 2008 global financial crisis had governments, financial institutions, regulators and more racing to stabilise the financial system. While the roles of various stakeholders in the financial system have been questioned, there has been limited attention on how the audit function could be improved to contribute to increasing financial stability.
Michel Barnier, European Commissioner for the Internal Market and Services, said, “The veracity of financial statements is central to confidence in the marketplace. All financial actors need to be able to rely on information which reflects the true financial health of companies. Auditors have an important role to play and that is why we need robust and completely independent audits. The crisis highlighted failings in the audit sector. These need to be explored and we need to see what improvements can be made. I believe it is important to approach this discussion in a frank and open manner. No subject should be taboo.”
The European Commission thus launched a broad consultation (known as “Green Paper”) on the role of statutory audit as well the wider environment within which audits are conducted.
The consultation closed in December 2010 and garnered much interest, as 688 responses were received. 87% of replies were received from the European Union (EU) Member States and 10% of replies were from non-EU countries and world-wide interest. Respondents representing world-wide interests included internationally operating audit firm networks and associations. Although the majority of the responses were from within the European Union, there has been a world-wide interest in the potential implications of the issues raised in this Green Paper.
ICPAS INCREASING GLOBAL OUTLOOK AND PERSPECTIVE
On 13 April 2010, the Committee to Develop the Accountancy Sector (CDAS) issued the final report consisting of 10 key recommendations under 3 key strategic thrusts to transform Singapore into a leading global accountancy hub for Asia-Pacific by 2020.
The key strategic thrust three highlights the need for a strong accountancy sector’s infrastructure and institution.
To transform ICPAS into a professional accountancy body with global membership, outlook and standing, ICPAS has recently amended its Constitution, with strong support from its members who voted for the amendments. The constitutional changes represent enhancements to the Institute’s existing governance arrangements and touch on areas such as composition and mode of election of Council Members, tenure of the leadership team, appointment of an audit committee and nomination committee as well as the new membership classification.
The carefully calibrated changes in ICPAS’ Constitution are aligned with the recommendations of CDAS to strengthen the Institute’s governance and leadership structure. These changes are aligned with the goal to transform ICPAS into a global accountancy body.
COLLABORATIONS BETWEEN ICPAS AND ICAEW PROVIDES SYNERGY
The increasing collaborations between both Institutes are in the right direction as it provides synergy and creates mutual benefit for both ICAEW members in Singapore and ICPAS members both regionally and internationally.
Both Institutes signed a Memorandum of Understanding (MoU) in January 2011 that encourages improvement in the professional development for Non-Executive Directors (NEDs) in Singapore. The programme had its first run in Singapore in August 2011 and was well-received.
ICPAS and ICAEW have also published its inaugural special supplement edition of the “By All Accounts” for Singapore. This is one of the platforms where the ICPAS and ICAEW has leverage on each other’s strengths to bring about a relevant, timely and interesting thought leadership publication for the profession.
We would also like to thank ICAEW for its strong support as a Platinum Sponsor for the inaugural Singapore Accountancy Convention last year and the continual support for the upcoming Singapore Accountancy Convention 2011 on 4 November. The theme this year, “Accountancy Entrepot” – draws upon Singapore’s success as an entrepot and our future development into a global accountancy hub. Our distinguished speakers and panelists will share on numerous business issues, such as good corporate governance to sustain organisational success, business trends for Asia Pacific in 2012 and beyond.
To conclude, the world is closely connected and businesses no longer operate in silos. Similarly, I am heartened by the increasing collaborations between ICPAS and ICAEW, which bore fruit to this EC Green Paper on Audit Policy forum.
Mark Twain, a renowned author once said, “It were not best that we should all think alike; it is difference of opinion that makes horse races.”
I hope this forum provides all of us here with a strategic platform, to engage in a thought-provoking discussion on revolutionary issues in the accounting industry.
I look forward to the invigorating discussion with all the panelists shortly.
 MTI Revises 2011 Growth Forecast to 5.0 to 6.0 Per Cent, http://app.mti.gov.sg/data/article/25562/doc/PR_2011Q2.pdf, 10 August 2011
 Summary of Responses, Green Paper Audit Policy: Lessons from the Crisis, pg 3, European Commission, 4 February 2011