Financial Reporting & Auditing in Singapore

The Accounting Profession of Singapore

The Institute of Certified Public Accountants of Singapore (ICPAS) is the national body representing the accounting profession in Singapore. It maintains a register of qualified accountants comprising mainly local graduates. Membership is open to members of the Institutes of Chartered Accountants of England and Wales, Australia, Scotland, Ireland and a number of other accounting bodies. Generally, prior to being admitted as a full member, they must attend a week-long pre-admission course. Members are designated as certified public accountants (CPA).

The Public Accountants Board, whose council members are appointed by the Ministry of Finance, licenses and registers accountants who wish to practise. It also handles practice monitoring, disciplinary matters and regulations on professional conduct.

Accounting Records in Singapore

All companies incorporated under the Companies Act are required to maintain books of accounts that sufficiently explain the transactions and financial position of the company.

The books may be kept either at the company’s registered office or at another place the directors think fit. If the books are maintained outside Singapore, sufficient records must be maintained in Singapore to facilitate the preparation and/or audit of financial statements that reflect accurately the company’s financial position.

Sources of Accounting Principles

Financial Periods Commencing before 1 January 2003 The principal source of accounting principles in Singapore, namely Statements of Accounting Standards (SAS) and Interpretation of Statements of Accounting Standards (INT), are issued by ICPAS. These standards are essentially International Accounting Standards (IAS) modified for certain transitional provisions. They provide guidelines on the accounting measurements and disclosure requirements. Businesses may depart from such standards if the standards conflict with disclosure exemptions granted by law. Otherwise, ICPAS may take disciplinary action against any of its members who are in violation of the standards.

Rules on accounting measurements are generally established by SAS and INT. Disclosure requirements are governed by SAS, INT and the Companies Act.

ICPAS is a member of the International Accounting Standards Committee (IASC). Compliance with IASC standards are not mandatory, but the institute supports the IASC objectives of formulating and publishing standards for observance during presentation of audited financial statements and promoting worldwide acceptance of such standards.

Financial Periods Commencing on or after 1 January 2003 With the implementation of section 37 of the Companies (Amendment) Act 2002, SAS issued by ICPAS will not be used with effect from annual financial periods commencing on or after 1 January 2003. Instead, Singapore Financial Reporting Standards (FRS), issued by the new accounting standards-setting body, the Council on Corporate Disclosure and Governance (CCDG), are now effective. FRS are essentially adopted from International Financial Reporting Standards (IFRS). The previous SAS were adopted from the same set of IFRS (formerly referred to as IAS) but with modification to certain transitional provisions. Consequently, there are differences between FRS and SAS.

Interpretations of Standards are authoritative guidance on the application of the relevant standards. CCDG adopted all international interpretations as Interpretations of FRS (INT FRS) with effect from financial periods beginning on or after 1 January 2003.

Compliance with FRS is a statutory requirement whereby any non-compliance amounts to a breach of the Companies Act by the directors.

Financial Reporting in Singapore

The Companies Act requires that an audited set of financial statements, made up to not more than six months before every Annual General Meeting, is to be presented to the shareholders at the meeting. Generally if a company incorporated in Singapore has one or more subsidiaries, it must prepare consolidated financial statements unless it meets certain criteria as provided for in FRS 27 Consolidated and Separate Financial Statements. Currently, financial statements under the Companies Act consist of the balance sheet, income statement together with explanatory notes. With the Companies (Accounting Standards) Regulations 2002 coming into operation for financial periods on or after 1 January 2003, a complete set of financial statements will comprise the balance sheet, income statement, statement of changes in equity, cash flow statement and explanatory notes.

The financial statements must be accompanied by the directors’ and auditors’ reports and by a statement from the directors declaring that the financial statements show a true and fair view and that it is reasonable to believe that the company can reasonably pay its debts as they become due.

Companies which meet specific provisions in the Companies Act may be exempt from having their accounts audited but nevertheless must prepare financial statements that comply with the Companies Act.

Annual Requirements for Companies in Singapore

The Companies Act requires every company, except for those exempted in accordance with the provisions in the Act, to appoint one or more auditors qualified for appointment under the Accountants Act to report on the company’s financial statements. The auditors are to ascertain whether proper books of accounts have been kept and whether the financial statements agree with the company’s records. They will then report on the trueness and fairness of the financial statements to the shareholders at the Annual General Meeting.

Audit Exemption Starting with the financial year beginning on or after 15 May 2003, the following companies are no longer required to have their accounts audited. However, they are still required to prepare accounts (and consolidated accounts where applicable) that comply with FRS.

o Small exempt private companies An exempt private company with revenue in a financial year below S$5m is exempted from appointing auditors and from audit requirements. Revenue is defined according to the statutory accounting standards, i.e. the FRS.

o Dormant companies A dormant company is exempted from appointing auditors and from the audit requirements if it has been dormant either (a) from the time of its formation or (b) since the end of the previous financial year. A company is considered dormant during a period in which no accounting transaction occurs, and the company ceases to be dormant on the occurrence of such a transaction. For this purpose, transactions arising from the following are disregarded:

  • Taking of shares in the company by a subscriber to the memorandum
  • Appointment of company secretary
  • Appointment of auditor
  • Maintenance of a registered office
  • Keeping of registers and books
  • Fees, fines or default penalties paid to the Registrar of Companies

A Ride Without Motorcycle Leathers

Have you ever wished you had a good set of motorcycle leathers? I will never forget the winter of 1987. My wife and I were living on the North shore of Chicago. She was working as an elementary school teacher and I was finishing grad school. Money was tight, so a second car was out of the question. The hassle of sharing a vehicle has always been more than I can stand to end, so I began looking for some other form of cheap transportation. In those days I had yet to own a motorcycle, but I had always wanted one. While driving by the local shopping mall near our neighborhood, I noticed a motorcycle sitting near the road with a sign sign hanging off the front forks. It looked pretty small, but as the chrome glinted in the sun I found myself strangely drawn to pull over and check it out.

The bike was a 1972 Honda CB350, and for being 16 years old at the time, it was in great condition. It looked like it had been barely ridden and then tucked away in a garage somewhere. This was about 23 years ago now, so I honestly can not remember what color it was originally. I painted it metallic flake blue within the first year of owning it. To me, this bike was priceless, but I paid only $ 300 for it later that afternoon.

Now that my transportation problem was solved, I began regularly making the 20 mile commute to school. Which if you have ever been in Chicago traffic, you understand that a trip of that distance could take an hour or more. It must have bought the motorcycle in the summer because I remember how much I loved tooling around on it for the first few months. But then the temperature began to drop and the snow began to fly. I quickly learned that there is a good reason for Chicago being known as the windy city. Riding a motorcycle alongside Lake Michigan in the winter is like running naked through a meet packing plant with 100 high speed fans blowing on you. I mean it was cut you to the bone frigid!

Although I did have a full face helmet, I never seemed to have clothing that could keep the icy wind from penetrating down to my soul. I even remember forgetting my gloves one night and having to put my socks on my hands just to survive the ride home. My ankles still hurt when I think about it. Even though we now live in the south eastern United States, and you can ride nearly all year round, just thinking about those frosty mid-western motorcycle rides can send a nasty chill up my spell.

Since that time I've clocked countless miles on everything from Hondas to Harleys, and if there is one thing I have learned, it is that there is no substitute for a set of high quality motorcycle leathers. Whether you ride a crotch rocket or a big old hog, nothing beats a lined leather jacket and a broken in pair of chaps on a long cold ride. When God made cows, he really knew how to insulate them from the cold. If you are currently in the market for some new athletes, take a minute and check out the link listed below.

Are You Thinking About Investing Internally In Stocks?

One of the big challenges an investor faces on a daily basis is market risk.

Working hard to satisfy your investment goals while at the same time limiting your risk and exposure to volatility takes a solid strategy, reliable information, and a patience like no other.

Sure, we've all heard stories of the home run hiring investor who laid his money down and made a "killing" in a stock.

These are the kinds of tales that grab the headlines and attract the interest of the "fast buck players."

"Steady as she goes" would be a more realistic view of how to invest. It is difficult to just wait for an investment to climb in value, but without patience and the fortitude to keep a long-term mindset, you're probably going to miss out on a solid move.

Using what could be called a butterfly approach and jumping from one hot stock tip to another can be the riskiest investment play of all.

Being patient is not enough though. If what you are investing in is oozing with risk, patience may not be the key to success. You devote your patience to solid investments and those with limited risk.

If you are an investor or contemplating investing in the various financial markets and instruments available, you must get into the flow of information.

Catching a thirty second or two minute report stating a company making an innovative new product that is going to revolutionize the industry should not be considered a call to action.

If you do not understand what you're being told to invest in … do not invest. Not having an understanding of what your money is invested in is comparable to sitting down at a high-stakes poker game without understanding the marks on the cards.

If you do not have basic investment knowledge to guide your decisions, your chances of making the right choices are limited.

It's simple; have a basic knowledge of how the markets work; have an understanding of what it is that you are interested in investing your money in; and most importantly, understand the upside and downside scenarios, in other words, what are the risks and more specifically the risk of losing your entire investment.

If you feel that the risk of putting all your investment dollars in the stock markets in the US is too great, perhaps diversifying into stocks from other countries is worth examining.

The mindset for many is that if the stock markets at home are suffering, there may be markets abroad that offer opportunity, because bad economic news on one front may be great news in another part of the world.

A quick example of such news would be the trade figures. If the US is witnessing a rise in imports month after month, you have to ask yourself; where are we importing from and what are we importing?

This could have the clue to invest in a company that consistently exports to the United States and the amount of its exports (in dollars) keeps rising.

On a more basic level; If a football team is having a terrible season, there is probably a team that is having a great season.

Think of it as; when two teams compete someone wins and in world economies, someone's bad economic news typically translates to someone else's fortune.

When you read a headline or story about some bad economic figures … ask yourself, "Who is on the other side of this?"

Who did well that directed in the US doing poorly? If the US did great, who suffered? Is this a trend? Is the company or industry showing real value in their stock price now?

Could this be just a fluke and there's a buying opportunity?

It pays to look past the headline and the story and into what made the story. Everybody hears news, but going the extra step and finding out what caused the news will give you better market insight.

If you think that you want to diversify in the international markets, you have to take into consideration what you stand to gain versus what you could possibly lose.

Currency fluctuation can boost a return on an investment. If the currency of a country you invest in increases against the dollar, when it comes time to sell, you'll get more dollars.

However, that can also work against you; the dollar increases against the currency of the country of the company you have invested in … and you'll get back fewer dollars.

Obviously, you want your stock to rise and a sweetener is getting a dividend (if it pays one) in the meanime. Keep in mind, markets rise and fall and companies announce separation suspensions, eliminations, or reductions.

This can happen in any of the world markets, not just at home.

Before you get too excited about international investment, you should understand that the US is not the only country where interest rates rise and fall.

The currency issue I mentioned, but worth mentioning again, currency fluctuations can hurt you.

In the US, you are fortunately because companies that list on the exchanges have to reveal a lot of information about themselves before they can be listed.

The rules are not the same all over the world, so investigate on your own, rather than trusting only what is offered to the public.

This would be of particular interest when it comes to the accounting methods of the companies and how they compute corporate and individual investor taxes.

Committing a portion of your investment dollars can be exciting and rewarding, but if you are not a savvy investor with a deep understanding of world markets, currency exchanges, tax laws, accounting, and company reporting practices, your personal investment risk will be very high .

I always suggest seeking professional advice when making any investment, be it; financial instruments, real estate, precious metals, or any of the other opportunities offered.

Take note, if you want to invest internationally there are alternatives to going directly to a foreign market and opening an account.

You may wish to investigate the various international mutual fund offerings, foreign companies that list directly on the US exchanges, or those that are offered through what are called American Depository Receipts.

The foreign markets always look inviting when our markets at home are showing some volatility, but with so many sectors in the US markets to choose from, it's not always smart to jump the fence into the yard with the grass that looks greener.

The more knowledgeable you are about investing, the better investor you will become. Multiple resources will provide varied opinions.

What one analyst loves, another analyst may dislike. Do your own research and do a lot of it, before jumping into the stock market because someone told you it's the thing to do.

"There are only two ways that you make money; you work and your money works … make your money sweat." -Lazz Laszlo

5 Tips to Avoiding Travel Eczema

Your eczema has been under control for a while. You have attained that sweet spot of equilibrium where your known eczema triggers are understood and avoided, whatever medications you take are working and not causing side effects, your skin is as good as it gets. Only one problem, you will be traveling soon.

Travel eczema, occurs when your body meets up with irritants and allergens you cannot control, as a result of not being on home turf. Whether it’s air, water, food, sun, soaps, detergents or weather, traveling presents some hard to solve problems trying to keep eczema in check.

Sometimes it’s the irritant or allergen you are exposed to that you would usually avoid, that causes the problem. But sometimes, just the change of routine or unfamiliar environments can cause flare-ups. Traveling can be stressful and eczema loves stress.

Here are a few tips to keep eczema at bay:

1) Do a little research into the type of foods you will encounter that are indigenous to the area you will visit. What can you eat, what can’t you eat. Eating the cuisines of other cultures is a major component of travel, and knowing what common additives are used in the preparation of popular dishes is a good way to stay symptom free.

2) Pack enough of your favorite medications, cremes, ointments and solutions. Don’t think you’ll be able to pick some of these up where ever you go. First, some products won’t be available, second , they may be very expensive and third, you don’t want to spend time running a round looking for something to ease your discomfort. If you travel to a tropical climate and you start to experience eczema symptoms like flaking and cracked skin, these minor openings are perfect places for more serious infections to gain a foothold, if you have the right medication this will not present itself as a problem. Better to have a little extra baggage than find yourself without your wonder creme.

3) Try to drink enough water or fluids, this will keep your system less stressed and better able to cope. I try to drink only bottled water that comes as close as possible to the type I drink at home. Meaning, I drink spring water with a specific mineral/chemical make up, so much sulfur, dissolved salts, etc., so when I travel I don’t drink mineral waters which may have higher mineral concentrations or added ingredients. If you drink German beer at home, then drink german beer abroad.

4) Pack and use an anti allergy travel sheet like an Allersac. Bleaches, detergents, soaps, perfumes are just a few of the triggers a travel sheet will help you to avoid when you spend 30% or more, of your time in a strange bed. An anti-allergy travel sheet, one that can be washed repeatedly, will be your best bet. Make sure, which ever travel sheet you use, it has a pillow pocket to protect against direct contact with the hotel pillow. One of the major causes of allergic eczema is dust mite dander. A travel sheet with a small pore size or one that claims protection from dust mites would be wise.

5) Environmental factors like cold, humidity, sunlight and heat can cause flare-ups especially when it’s the change that is the cause. If you travel to a warm climate from mid winter conditions at home, be prepared. Pack clothing that will mitigate reactions, sunblock, hat, gloves etc. The weather might cause your sinus problem to flare, which in turn stresses your body and causes your eczema to activate, or the humidity allows high mold or pollen counts where you travel. There are websites like http://www.aaaai.org/ which publish pollen and mold counts, and many sites for weather forecasts.

Having eczema and learning how it activates and affects you takes years, some people get a handle on it, others don’t, but even if you don’t know what the causes are, some simple precautions, a little research and remaining calm can help you to get the most out of traveling, even with eczema.