Wednesday 13 January 2021 2:51 pm

Singapore audit reform stresses need for UK action, IIA warns

Recent changes to rules surrounding audit in Singapore have highlighted why action on audit reform in the UK is crucial, the CEO of the Chartered Institute of Internal Auditors has warned. 

CEO John Wood said reform of the UK’s audit sector was necessary to protect the UK’s leading reputation in corporate governance.

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The Singapore stock exchange has tightened its requirements for listed company auditors in the wake of a series of accounting scandals.

Singapore’s regulatory unit said all primary-listed issuers must appoint an auditor registered with Singapore’s Accounting and Corporate Regulatory Authority to conduct their statutory audits.

The move will effectively bring all listed company audits under the oversight of the regulator.

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Singapore Exchange Regulation chief executive Tan Boon Gin said the changes enhanced the standards required of auditors and property valuers in their dealings with listed companies.

“We expect the quality of the market and investor protection to improve as a result,” he added. 

Chartered Institute of Internal Auditors CEO John Wood was encouraged to see Singapore strengthening the role of their audit regulator – and would like to see similar changes in the UK. 

He said he would like to see an effective audit regulator established “with the authority to do its job properly” and that doing so “must sit at the heart of any upcoming reform package”.

Wood continued: “We also urge consistency in implementing recent proposals from the FRC to split up the Big Four’s audit practices. Given the risk firms could interpret the proposed principles differently, the Chartered IIA is calling for greater consistency in applying them at an operational level, something we believe is fundamental to their effectiveness and to ensure a level playing field.”

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According to the Financial Times Kwasi Kwarteng, the UK’s new business secretary, has vowed to prioritise reforming the British audit market.

Wood welcomed Kwarteng, adding he trusted the new business secretary would “act without delay” when it came to reforming the UK audit sector.