Financial Reporting Surveillance Program by ACRA
High-quality financial reporting has been the core objective of ACRA, Singapore’s accounting and corporate regulatory authority. In its efforts to build trust in the capital market and further streamline the process, ACRA has introduced a Financial Reporting Surveillance Program (FRSP).
The primary objective of this program is to guide companies to meet the financial reporting requirements laid down in the accounting standards, in order to provide investors and stakeholders with reliable and meaningful financial statements for decision-making. This in turn, will increase trust and transparency among stakeholders and enhance the quality of financial reporting in Singapore.
The What, Why, and Whom of the Financial Reporting Surveillance Program
Directors of the companies are responsible for preparing and furnishing annual financial statements in compliance with the prescribed accounting standards laid down in the Companies Act. Such statements should provide reliable and comparable information to stakeholders, regulators, and other users of financial information.
Simply put, the objective behind introducing this program is to safeguard the interest of stakeholders in making financial/investment decisions. Along with that, the program also aims to take stringent measures against those directors who don’t comply with the requirements laid down by ACRA. Through the FRSP, ACRA can enquire if they feel there is a non-compliance with the accounting standards.
Director’s Duties in Relation to Financial Reporting
The directors of the companies are required to:-
- Comply with the accounting standard issued by the ASC (Accounting Standards Council).
- Present an accurate and high-authority view of the company’s financial position and performance in a given financial year.
- Maintain an internal accounting control process and proper records enabling true and fair preparation of future financial statements.
- Diligently review financial statements before presenting them to the shareholders and subsequent submission to ACRA.
What Happens if ACRA finds a Non-Compliance?
If there is a non-compliance of any nature, ACRA may take the following actions:-
- Issue advisory letters informing directors of the non-compliance and urge them to take note for future preparation of financial statements.
- May seek remediation actions such as asking for a revision of financial statements.
- May issue a warning or levy a composition sum against the directors.
- Prosecute directors in court, depending upon the nature of non-compliance.
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