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ACCA worked alongside the Accounting and Corporate Regulatory Authority (ACRA), the  Association of Chartered Certified Accountants (ACCA), the Institute of Singapore Chartered Accountants (ISCA) and the Nanyang Technological University (NTU) to study the impact of enhanced auditor reporting in Singapore.

KAMs are key

EARs have brought about insightful disclosures by auditors, particularly in the form of key audit matters (KAMs).

Audit committees had more robust deliberation over KAMs.

89 % of investors surveyed said that they were now more likely to read the auditor’s report before reading the financial statements.The KAMs enabled them to identify significant accounting and audit issues to pay attention to when reading the financial statements.

The communication of quality KAMs and corporate disclosures could reap significant benefits in enhancing auditor-director-management-investor relations.

Beneft for companies

Companies proactively enhanced their financial and non-financial disclosures in conjunction with the KAMs reported by the auditors.

  • Management added more disclosures and in greater depth to the financial statements.
  • Audit committees were more forthcoming in their views on significant accounting matters.

The way forward

For the EARs to act as a catalyst for greater transparency in Singapore and deeper engagements among stakeholders, all stakeholders must step up and do their part.

Auditors, directors and management must continue to provide valuable insights and meaningful disclosures.

Investors must leverage more on these insights and actively engage with auditors, directors and management.

In the longer run, this will further boost market confidence and reinforce Singapore's reputation as a trusted place for business.

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