New Guide to Help Investors Gain Deeper Insights into Listed Companies' Financial Statements and Their Audit Processes

Investors will soon have more insightful information to help them make investment decisions.

The Accounting Corporate Regulatory Authority (ACRA), the Institute of Singapore Chartered Accountants (ISCA) and the Securities Investors Association Singapore (SIAS) have jointly produced a guide to help investors better engage company directors, management and auditors.

The guide will help investors identify significant risk areas in listed companies’ financial statements and understand how these areas are audited.

The guide is written with the retail investors in mind. The guide focuses on key matters that auditors of listed companies are now required to provide in their reports, following the adoption of the enhanced auditor reporting standards with effect from 15 December 2016.

The upcoming annual general meetings (AGMs) season will see all listed entities in Singapore incorporating the enhanced auditor’s report (EAR) for the first time.

The guide explains the different types of audit opinions, how unfavorable audit opinions could be identified, and the issues investors should look out for.

The guide also includes a list of relevant questions relating to key audit matters that investors could consider raising with directors, management and auditors during AGMs.

Commenting on the guide, Kenneth Yap, Chief Executive of ACRA said, “The guide supports our efforts to introduce more transparency and engagement in the marketplace. With deeper insights offered by the enhanced auditor’s report and helpful pointers in the guide, investors would be able to engage more meaningfully with company directors and management on accounting and audit matters. Such robust engagements will in turn raise the quality of disclosures in audited financial statements over time.”

David Gerald, President of SIAS said “With the AGM season approaching, this guide would be an ideal resource to help shareholders as they review the annual report. It provides shareholders with pertinent questions to raise at AGMs in relation to the companies’ financial statements and their audit processes.”

Lee Fook Chiew, Chief Executive Officer of ISCA said “Investors are key users of audited financial statements, including the auditor’s report. For investors to benefit from the improved communications by the auditor on an entity’s financial performance, it is vital that they understand and appreciate the content in the enhanced auditor’s report. ISCA recognizes this and has actively worked with ACRA and SIAS over the past two years to share pertinent aspects of the enhanced auditor’s report. We are pleased to have contributed to the development of the guide, which we believe will benefit the investor community.”