ASEAN KEY DESTINATIONS
Investors want greater transparency, disclosure in financial reports
SINGAPORE: Statutory audits and high-quality financial reports are most valued by institutional and retail investors in Singapore, according to the findings of a survey released on Thursday (Aug 25) at the Singapore Accountancy Convention 2016.
The study which surveys the views of investors, was commissioned by the Accounting and Corporate Regulatory Authority (ACRA) and the Institute of Singapore Chartered Accountants (ISCA), and conducted by the NUS Business School. Over 200 retail and institutional investors were surveyed.
The study found that investors rated financial statements as the most important source for making investment decisions, compared to other sources such as company announcements and analyst reports. Financial statements that have been audited were also found to be more valued by investors.
Meanwhile, transparency was also a key area of focus in the survey, where a majority of investors want audit committees to explain their basis of choice for auditors. They also want audit committees to use ACRA’s audit quality indicators (AQIs) framework that was introduced last year when evaluating appointment of auditors.
Investors also tend to focus on directors’ experience, remuneration and independence, as well as the company’s internal controls and risk management policies when assessing the quality of corporate governance.
Associate Professor of NUS Business School Mak Yuen Teen said: “The survey supports the importance of regulatory programmes and other initiatives to improve financial reporting and audit quality, and ACRA’s efforts in this regard have contributed significantly to the trust that local and international investors have in the quality of financial reporting and audit especially for Singapore-incorporated companies.”
Commenting on the study, Chief Executive of ACRA Kenneth Yap said: “Companies should develop a culture of disclosure by default and engage investors early and in a timely fashion. Audit committees are urged to openly address key financial concerns and respond to key audit matters raised by auditors in the new reporting format.”
The survey findings have also provided the impetus for a new guidebook to better educate investors, said ACRA in a press statement.
Speaking at the convention, Senior Minister of State for Law and Finance Indranee Rajah announced ACRA is working with ISCA and the Securities Investors Association (Singapore) SIAS to develop a guide for investors to explain the disclosures under the enhanced auditor’s report.
She said: “The guide will also help investors understand how they can use these enhanced audit disclosures to obtain greater insights into the company’s financial statements.”
The guide is expected to be issued early next year, in time for the next annual cycle of Annual General Meetings traditionally held in March and April.
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Indonesia to launch 13th economic package this month
Coordinating Economic Minister Darmin Nasution said on Wednesday that the government would release its 13th economic policy package in August, adding that the draft had been completed.
Darmin said the 13th package was largely an extension of the previous one, but would expand its focus beyond industry. The 12th package focused on small and medium enterprises.
"We are just waiting to schedule a meeting with the president," Darmin told reporters at his office. He refused to give the exact date the new policy package would come into effect.
The ministry team must meet with President Joko "Jokowi" Widodo one more time to finalize the details, Darmin said.