Large charities will face higher independence requirements for the accountants and firms conducting their audits and reviews, the Accounting and Corporate Regulatory Authority (Acra) said, as part of an enhanced code of professional conduct and ethics for public accountants and accounting entities.
The code will kick in on Feb 1.
Acra said yesterday that the tougher independence requirements are a recognition of the need for a high degree of public confidence in the financial information of such entities.
These requirements will also be applied to public interest entities and large institutions of a public character. Currently, only the audits of public entities and listed companies face these stricter rules.
Other requirements include strengthening the safeguards over the independence of auditors. For example, the code now requires the identification of a key audit partner who will make key decisions or judgments on significant matters with respect to the audit.
These key audit partners must be rotated regularly and there will be a cooling-off period after they have left the practice before they can join certain clients in certain positions.
Acra said: "As a profession that serves the public interest, it is crucial that public accountants remain a profession with integrity and independence, and serve as a valued and trusted source of information and advice. In this era of economic volatility and a rapidly evolving corporate landscape, the code is a vital set of guiding principles for public accountants to rely on and enables them to make the right decisions when faced with conflicting choices between economic interests and ethical considerations."
The revised code is based largely on the International Ethics Standards Board for Accountants' 2006 Code of Ethics, with some modifications and additional provisions to take into account the circumstances in Singapore.
The review was carried out by Acra's public accountants oversight committee, with the support of the ethics sub-committee.
The proposed amendments to the code take into account revisions made to the IESBA Code up to September last year.
This article was first published on Nov 11, 2014.
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