A student of mine has joined AGO

Recently I received an email from a student with this type of address ie. @ago.gov.sg.


Curious, I ask him as to which branch of government is she working for now.


"Auditor-General Office," she said. [I thought it was the Attorney General Office. :)]


She is helping AGO to fufill its role to audit all ministries, statutory boards, embassies, and Temasek owned complanies for President. [Wow!]


That conversation brought my attention to the recent article in BT dated Jul 20, 2007 entitled, "Govt audit reveals financial lapses".


Examples of financial lapses revealed by Auditor-General are:-

• The Infocomm Development Authority of Singapore (IDA) could have better managed over $200 million in cash reserves for higher returns. [..from zero return?]


• National Volunteer & Philanthropy Centre (NVPC) had accumulated unused grants of $4.9 million in March 2006. [So again money is sitting idly around.]


• Ministry of Health (MOH) was found to have continued its payments for some 106 deceased persons through a scheme was administered by an agent. It has recovered some $55,850 of the $178,150 that was paid. [Phew! Amount not big.]

My Words

• Thank goodness we have a Government who is willing to be transparent about their own boo-boos.


• Thank goodness we have a good problem of dealing with money sitting around to the tune of millions of dollars. It shows that we have some hidden reserves ie. like housewives putting away money.


• Thank goodness we did NOT find massive frauds.


• It is good that we have taken stock of the problems. We will remedy them and move on.

5 Public Accountants' licence were suspended or cancelled

What happened?
ACRA, the independent regulator of auditors in Singapore, conducted a "test" on 110 of the total 780 public accountants from April 2005 to March 2007.

On Jul 25, 2007, ACRA has for the first time released the "report card" on the state of auditing profession in Singapore. The results are as follow:-

• One third of the 110 received a 'good' rating.
• Another third were rated 'satisfactory'
• The remaining third, or 36 accountants, were asked to undergo remedial action.
• The special 5 got their licence suspended or cancelled.
  

What are the areas of weakness?

ACRA deputy chief Mr Ow Fook Chuen listed the common boo-boos as follow:-

• Inadequate documentation of audit opinions.
• Lack of follow-up on subsequent events up to the date of the audit report. [Why the need to follow up? These events may materially affect the financial statements and the validity of the audit opinion.]
• Audit procedures were conveniently updated as 'noted' or 'done' without actual audit work or assessments being carried out. [While corners were being cut, clients still got charged. Or the other way round where clients want to lower audit fees and thus the corners cut.]
• Insufficient inventory count procedures eg. no physical count procedures.
• Some also blindly and recklessly relied on the audited financial statements by the auditors of overseas subsidiaries without considering their competence.

Edgar's words of wisdom (ha!)

A second round with wider coverage is expected to be completed in 2011. Hmm... isn't it a wee bit too long for the next report card in the current dynamic world?

To hasten the process of quality renaissance, should we do with public accountants what we did to hawkers in Singapore ie. force them to display their "A" or "B" or "C" licence? As hawkers' hygiene in food preparation has public implication, likewise the quality of work of auditors too has significant public implications.

So ACRA what say you?

ACRA's proposal to draw talents into audit

On July 25, 2007, ACRA has proposed some bold moves to ease the talent strain in the audit profession as follows:-

• It is seeking feedback on how to make it easier for mid-career professionals such as bankers and financial analysts to switch to accounting.
• To consider the possibility of letting international auditors with specialised expertise to practise here.

teaching you about "ethics"

One of the biggest problems facing the accountancy profession across the globe is dealing with issues that bordered on ethical grounds.

A student asked me recently on what should he do when the auditor has asked him to disregard some audit errors done.

Taking a step back from such incidents, the biggests issues seem to be:-

• how do we teach our students and
• what to teach our students about "ethics"?

How do our students learn about managing ethical issues?

In July 2007's Accounting & Business (A&B), "ethics should be taught (and learnt) as a part of lifelong professional learning".

What to teach then?

Peter Williams in A&B presented 5 fundamental principles in:-

• integrity ---- ["yuen cherk"]
• objectivity --- ["unbiased and focused"]
• professional competence and due care --- ["got leow" and not "boh chap"]
• confidentiality --- ["your mouth must learn to talk less or stop talking"]
• professional behaviour --- ["dun anyhow"]

Friends - It is not easy to be a professional and an accountant at the same time.

HKEx has pushed its limit again

With effect from 25 Jun 2007, Electronic Disclosure Project (EDP), the new regime for electronic dissemination of regulatory information will be launched.

EDP would consist of the following items:-

• mandatory paid announcements will no longer be required [notification in the newspapers will be eventually phased out - less advertising revenue for newspaper companies but lower cost of compliance for listed companies / good for the environment]


• companies must eventually maintained their own website

My concerns
I don't think HKEx and the respective listed companies are expecting the respective shareholders to prowl through a dozen of websites for any announcement that might impact them every day.

Eventually I would forsee the delivery of announcements and financial results by email to shareholders.

Then how about uncles and aunties who don't email addresses? They will learn when making money is involved.

Environmentally, this is definitely a good move.

Practical Experience Requirement (PER) Part 5

This posting focuses on the person called MENTOR.

• Who can be your mentor?
• What is the purpose of mentor to PER?
• Can I have more than one mentor?
• Any advantage or disadvantage of having an ACCA member as a mentor?
• What if my mentor is not an ACCA member? Will I be penalised?

For answers to the above, please read:-
http://www.accaglobal.com/students/publications/student_accountant/archive/2007/77/2957617

Practical Experience Requirement (PER) Part 4

Hi to existing student or affiliate,

If you belong to the above, you will be required to transfer to the new PER by 31 December 2007.

You will need to transfer any STR competences you have recorded under the current or pre-2001 scheme to the new PER.

I have just read this article that described the various actions needed for the following groups of student/affiliate:-

• those who have completed the requirement under the old STR
• those who have started but have not completed the STR
• those who have not started at all

Read this article for a complete help - http://www.accaglobal.com/pubs/students/publications/student_accountant/archive/pract0307.pdf

Pay rise for new recruits to Big Four

The tight labour market has forced the Big Four accounting firms to increase the starting salary twice in 6 months.

So what is the starting salary? Your neck must be straining to know?

As per today's ST, you should get about $2,400 with about 1,000 vacancies.

So what are waiting for?

Faster finish your ACCA papers and get your job applications in.

P/S - Govt is paying as much as $2,900 for accounting graduates.