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SINGAPORE – Almost all companies listed on the Singapore Stock Exchange (SGX) will need to appoint a local auditor approved by the Accounting and Business Regulatory Authority (Acra) starting next month.
SGX’s regulator, the Singapore Exchange Regulation (SGX RegCo), made the announcement on Tuesday, January 12, about a year after opening a public consultation on its plans to overhaul accounting oversight.
The new statutory audit rules will apply to all primary listed companies.
Companies listed on the developed market secondary listing may continue to appoint auditors from their home jurisdiction, while SGX RegCo will assess the requirement on a case-by-case basis for all other secondary listings.
The regulator has also made some changes to the qualifications required for real estate appraisers and to the standards for real estate appraisal reports.
All rule changes will take effect on February 12.
Mr. Tan Boon Gin, Managing Director of SGX RegCo, said the latest rule changes will raise the standards required of real estate auditors and appraisers in their dealings with listed companies.
“We expect the quality of the market and investor protection to improve accordingly,” he said.
SGX RegCO has stated that companies already listed are required to appoint an auditor in accordance with the revised listing rules for their financial year beginning on or after January 1, 2022.
The changes to accounting standards for interim financial statements will come into effect for the financial statements of listed companies for their interim periods ending from June 30, 2021, SGX RegCo said.
Currently, the annual accounts of a company can be audited by a chartered accountant or a firm of chartered accountants approved by the Central Depository. SGX RegCo may require a listed company to appoint independent professionals and special auditors for specific purposes.
These powers will now be broadened to include the requirement for the appointment of a second auditor.
SGX RegCo will only exercise these powers in exceptional circumstances – for example, where it believes that possible inaccuracies in the financial statements are pervasive and yet not substantiated by the opinion of the incumbent auditor, and that such concerns cannot be addressed by a special auditor, the regulator said in a report.
Other existing regulatory tools that SGX RegCo can use include issuing public queries and notices of compliance to address concerns raised about the company’s financial reporting.
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