flowers for me. thanks irene.

Can help me to answer the above question by classifying the existing 5 requirements (described below) either as

• “Essential”,
• “Good to have” or
• “Thoroughly irrelevant”.

The current 5 requirements for registration as a Public Accountant:-

1. Academic qualifications;
2. Practical experience;
3. Continuing professional education;
4. Completing the course on ethics and professional practice subjects as determined by the Public Accountants Oversight Committee; and
5. Membership with the Institute of Certified Public Accountants of Singapore.

Your view, please?

Currently, the registration framework for public accountants comprises five elements:-

1. Academic qualifications;
2. Practical experience;
3. Completing the course on ethics and professional practice subjects as determined by the Public Accountants Oversight Committee; and
4. membership with the Institute of Certified Public Accountants of Singapore.
5. Continuing professional education.

The above first 4 are the various doors that a person aspiring to be a public accountant would have to go through before you gain your official registration and recognition as a Public Accountant. The 5th door is a maintenance factor.

What is a Public Accountant?

Public accountants are persons who are registered with ACRA in accordance with the Accountants Act (the “Act”) to provide public accountancy services of audit and reporting on financial statements or any other professional services that are required by any written law to be done by a public accountant.

What is the problem?

We have a shortage of them now and in future to promote high quality audit and corporate financial reporting to build confidence in Singapore’s corporate financial reports.

Any idea?

ACRA has proposed the following alternative pathways:-

• entry of international auditors (with specialist expertise);
• entry of mid-career professionals with specialist expertise which are relevant to audit; and
• re-entry of former public accountants who had left the profession.

Any other way?

Mr Simon Ng Yap Peng and Mr Mickey Chiang, both representing their self and Ms Janet Tan, the executive director of ICPAS sent in their respective suggestions to BT / ST on Aug 2, 2007.

Firstly, Mr Simon Ng suggested:-

1. Let minority shareholders elect their independent representatives to sit in the audit committee of listed companies.
2. External auditors should set up a feedback box in their client’s premises for their employees to “whistle blow” any irregularities.
3. External auditors should do surprise check on their clients.
4. Our accounting students should do case studies on recent scandals such as NKF, China Aviation Oil, Citiraya etc etc. [Edgar is doing it now thru’ his blogs as he tries to inject realism into classroom learning.]
5. Encourage availability of post graduate courses for grads of other disciplines to learn about accounting matters.

Mickey Chiang questioned the following:-

• He understands that the ACRA review programmes were devised accountants from the Big 4. So are these programmes relevant to smaller/small audit firms?
• How many of those auditors who “failed” the review were from the Big 4?
  

Ms Janet Tan of ICPAS suggested the following:-

• To make available more training opportunities to upgrade knowledge and skills. [Yes, if the ACRA Review has highlighted that its members are caught in a time warp and self-contentment that they are good enough to keep making the monies without the need to keep up with time. But I don’t think this is the main issue. Our members are failing at basic stuff ie. things like not doing stock checks and insufficient/no documentation.]
• Provision of a panel of “hot reviewers” for members whose work are now required to be reviewed by another suitably qualified person ie. “hot reviewer”. [Yes, this will help an important concern raised by ACRA in the interim.]

Edgar says,

• I agree with Ms Tan that the review should be taken as a wake-up call to practitioners who think they can get away with shoddy work.
• But I am sure ICPAS will look for root causes that have contributed to the poor state. With the information procured during ICPAS’s own check on its members over the years plus ACRA report, it should be able to present a more comprehensive remedial measures.

Recently I received an email from a student with this type of address ie. @ago.gov.sg.

Curious, I ask him as to which branch of government is she working for now.

“Auditor-General Office,” she said. [I thought it was the Attorney General Office. :)]

She is helping AGO to fufill its role to audit all ministries, statutory boards, embassies, and Temasek owned complanies for President. [Wow!]

That conversation brought my attention to the recent article in BT dated Jul 20, 2007 entitled, “Govt audit reveals financial lapses”.

Examples of financial lapses revealed by Auditor-General are:-

• The Infocomm Development Authority of Singapore (IDA) could have better managed over $200 million in cash reserves for higher returns. [..from zero return?]
• National Volunteer & Philanthropy Centre (NVPC) had accumulated unused grants of $4.9 million in March 2006. [So again money is sitting idly around.]
• Ministry of Health (MOH) was found to have continued its payments for some 106 deceased persons through a scheme was administered by an agent. It has recovered some $55,850 of the $178,150 that was paid. [Phew! Amount not big.]

My Words

• Thank goodness we have a Government who is willing to be transparent about their own boo-boos.
• Thank goodness we have a good problem of dealing with money sitting around to the tune of millions of dollars. It shows that we have some hidden reserves ie. like housewives putting away money.
• Thank goodness we did NOT find massive frauds.
• It is good that we have taken stock of the problems. We will remedy them and move on.

the void will be filled

There are two Wong brothers, Wong Jian Jong and Wong Jian Reng, who are partners of Cristofori Music School.

The first Wong was convicted on two charges of wilful tax evasion – for making false entries in his income tax returns, claiming he earned less than he did.

Jail term – two weeks and he will have to pay penalties cum taxes totalling $671,170.80 for offences committed from 1998 to 2003. He was in charge of finance, accounts and the filing of the partnership’s income tax returns.

For similar offences committed in the same period, the second Wong , who was in charge of recruitment and administration, will pay $624,353.56.

In conclusion, under reporting your income is a bad bad thing to do and you will be punished. Both Wongs have to pay a total of $1.3 mio and one of them got to go to jail.

Sad days for the Wongs.

What happened?
ACRA, the independent regulator of auditors in Singapore, conducted a “test” on 110 of the total 780 public accountants from April 2005 to March 2007.

On Jul 25, 2007, ACRA has for the first time released the “report card” on the state of auditing profession in Singapore. The results are as follow:-

• One third of the 110 received a ‘good’ rating.
• Another third were rated ‘satisfactory’
• The remaining third, or 36 accountants, were asked to undergo remedial action.
• The special 5 got their licence suspended or cancelled.
  

What are the areas of weakness?

ACRA deputy chief Mr Ow Fook Chuen listed the common boo-boos as follow:-

• Inadequate documentation of audit opinions.
• Lack of follow-up on subsequent events up to the date of the audit report. [Why the need to follow up? These events may materially affect the financial statements and the validity of the audit opinion.]
• Audit procedures were conveniently updated as ‘noted’ or ‘done’ without actual audit work or assessments being carried out. [While corners were being cut, clients still got charged. Or the other way round where clients want to lower audit fees and thus the corners cut.]
• Insufficient inventory count procedures eg. no physical count procedures.
• Some also blindly and recklessly relied on the audited financial statements by the auditors of overseas subsidiaries without considering their competence.

Edgar’s words of wisdom (ha!)

A second round with wider coverage is expected to be completed in 2011. Hmm… isn’t it a wee bit too long for the next report card in the current dynamic world?

To hasten the process of quality renaissance, should we do with public accountants what we did to hawkers in Singapore ie. force them to display their “A” or “B” or “C” licence? As hawkers’ hygiene in food preparation has public implication, likewise the quality of work of auditors too has significant public implications.

So ACRA what say you?