The 2015 Study on “The Profile of Audit Committee of Listed Companies in Singapore” is the third study of audit committees (ACs) of listed companies in Singapore. The first two studies were conducted in 2009 and 2011, and they served as a baseline to calibrate the progress that ACs have made in Singapore.
The AC is a very important oversight mechanism established by the Companies Act to manage the agency problem arising from the conflict of interests between shareholders and management. An effective AC can help to ensure that the financial statements of listed companies are presented in a true and fair manner. This is all the more important in the current landscape where there are concerns about auditors’ quality and management’s propensity to manage their earnings.
This report consists of three parts. The first part is a review of the empirical literature on ACs with a focus on the attributes of effective ACs. The second part profiles the ACs of the listed companies in Singapore in terms of their compliance to the requirements of the Companies Act, the guidelines by the Code of Corporate Governance 2012 (CG Code 2012) and the Guidebook for Audit Committees in Singapore 2014 (GAC 2014), and the Listing Rules of Singapore Exchange. The third and final part of this report is a summary of the major issues and views shared by selected chairmen of ACs collated through one-on-one interviews.