The Institute of Certified Public Accountants of Singapore (ICPAS) has issued the final set of the clarified Singapore Standards on Auditing (SSAs). This follows approval by the Public Accountants Oversight Committee (PAOC) of the Accounting and Corporate Regulatory Authority (ACRA).
The clarified SSAs are based on their international equivalents, the clarified International Standards on Auditing (ISAs), which are issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). The basic objective of this international Clarity Project was to advance the process of global convergence and enhance the quality and uniformity of practice in audits worldwide.
The improvements arising from the Clarity Project broadly comprise the following:
- Identifying the auditor’s overall objectives when conducting an audit in accordance with SSAs;
- Setting an objective in each SSA and establishing the auditor's obligation in relation to that objective;
- Clarifying the obligations imposed on auditors by the requirements of the SSAs and the language used to communicate such requirements;
- Eliminating any possible ambiguity about the requirements an auditor needs to fulfill; and
- Improving the overall readability and understandability of the SSAs through structural and drafting improvements.
The new set of clarified SSAs goes into effect for audits of financial statements for financial periods beginning on or after 15 December 2009. In practical terms, this means that they will be effective for most audits with a 31 December 2010 year-end.
“ACRA and the PAOC are committed to the continued establishment of an internationally reputed regulatory framework for auditing in Singapore, and this includes the adoption of international standards," says Thean Lip Ping, Chairman of the PAOC. Lip Ping adds that the new SSAs are based on the clarified International Standards on Auditing which have undergone a rigorous and consultative international process. "The adoption of the clarified international standards would enable local and international investors to have continued confidence in audit reports provided by Singapore’s public accountants," he says.
Meanwhile, ICPAS president Ernest Kan notes that the clarified SSAs provide enhanced guidance to strengthen audit quality, thus contributing to a more robust financial reporting process.
Among others, improvements to the SSAs include communication with those charged with governance; the gathering and evaluation of audit evidence in relation to accounting estimates, including fair value estimates; auditing of related party relationships and transactions; and the use of the work of others, such as an auditor’s expert or other auditors in the context of audits of group financial statements.
The AASC is made up of ten practitioners and nine public members appointed jointly by ACRA and ICPAS. A feature of the AASC composition is to include practitioners with significant experience in the field of auditing and other assurance services, strengthened with representation from the business community, users and other stakeholder constituents of the accountancy profession such as the Singapore Exchange, Singapore Institute of Directors, and government agencies.