Following up on our previous post: Update on the Revised XBRL Filing Requirements from ACRA - Effective Date for Companies to Start Filing Financials in Full XBRL revised to 2 December 2013 from 22 October 2013, ACRA announced that the launch date of the BizFinx portal will be postponed to a date to be announced. This is due to due to technical issues encountered in the deployment phase of BizFinx portal.
Provisions have been made for companies required to file their financial statements during this period, to use any of the following filing options in the Annual Return form in the BizFile system:

(a) Full PDF format (Option C) - select "Other companies which have been approved by ACRA", with the date of approval as "1 December 2013" and reason stated as "Transitional arrangement for BizFinx launch";
(b) Partial XBRL format (Option B) - using FS Manager tool
(c) Full XBRL format (Option A) - using FS Manager tool

ACRA will provide a two weeks' notice before the new BizFinx portal is ready for launch, whereupon the above filing options will no longer be available.

The International Accounting Standards Board has introduced a new more principles-based approach for hedge accounting. The change will loosen eligibility rules for what can be hedged and deal with the so-called "own credit" accounting anomaly. Users of the financial statements will be provided with better information about risk management and about the effect of hedge accounting on the financial statements.

The most significant improvements apply to those that hedge non-financial risk, and so these improvements are expected to be of particular interest to non-financial institutions. As a result of these changes, users of the financial statements will be provided with better information about risk management and about the effect of hedge accounting on the financial statements. However, due to the principles-based approach, the new standard will require more disclosures, which will hinder efforts to reduce the length of IFRS financial statements.

The Singapore Financial Reporting Standards (SFRS) which is adopted from the International Financial Reporting Standards (IFRS) is expected to adopt the changes.

Following feedback from companies relating to the new XBRL filing requirements announced earlier, the Accounting and Corporate Regulatory Authority (ACRA) is revising the effective date for companies to start filing financials in full XBRL (eXtensible Business Reporting Language) format to 2 December 2013 from the original 22 October 2013. This means that most companies will likely file their financial statements in full XBRL only in 2014.

To prepare companies for the transition to full XBRL filing, ACRA has been engaging key stakeholders and companies’ financial preparers to seek feedback and provide the necessary support through a $1.8 million training fund set up earlier this year. Over 1,500 participants have already attended free training seminars and heavily subsidised training courses. These are organised by ACRA in collaboration with professional partners such as the Singapore Association of the Institute of Chartered Secretaries and Administrators (SAICSA) and the Institute of Singapore Chartered Accountants (ISCA). A preparation tool to help preparers prepare their company’s financials in XBRL was also developed. The first version was issued in June 2013. Preparers have since made further suggestions to improve the tool and ACRA continues to refine and issue new versions of the tool. The new date will also provide companies with more time to adjust to the changes made to the preparation tool.

The latest version of a software tool for companies to prepare their financials in full XBRL (eXtensible Business Reporting Language) format was released today. This follows the announcement earlier this year by the Accounting and Corporate Regulatory Authority (ACRA) that come October 2013, Singapore incorporated companies (unless exempted*) will be required to file a full set of financial statements in XBRL based on revised filing requirements. ACRA has now set the effective date for companies to start filing in full XBRL as 22 October 2013.

* The exceptions to this requirement will be companies from certain specified industries, companies allowed to prepare financial statements using accounting standards other than SFRS (Singapore Financial Reporting Standards), SFRS for Small Entities and IFRS (International Financial Reporting Standards), and insolvent exempt private companies.

ACRA held its annual flagship event – the Public Accountants Conference (PAC) on the 14th of August 2013. This year’s conference extends beyond auditing and focuses on how to improve the quality of financial reporting in companies. Over 800 delegates convene at the conference to discuss key challenges affecting the delivery of high quality financial reporting to investors and the rest of the business community. The theme for this year's conference is “Financial Reporting Value Chain - A Collective Responsibility”.

The event saw the release of two key reports, including a Survey of preparers of financial statements in companies in Singapore and ACRA’s Seventh Practice Monitoring Programme (PMP) Public Report. The survey of preparers of financial statements in companies in Singapore was conducted by ACCA and ACRA for the first time to examine the challenge of upholding the quality of financial reporting. The Seventh Practice Monitoring Programme (PMP) Public Report highlights the key findings of ACRA’s audit inspections on audit firms and other activities to promote audit quality.

Survey on Preparers of Financial Statements - Strengthening the Financial Reporting Value Chain in Singapore
The survey of preparers gauged preparers’ mindsets towards financial reporting, its challenges, and their preferred solutions to these challenges. Close to 400 accountants from large listed to small companies participated in the survey in May and June this year. Complementing the survey on financial preparers, a focus group of directors, preparers and auditors was held in June.

Key findings of the survey and focus group:

• Companies and preparers need to firmly take ownership over their financial statements. About 50% of the survey respondents appeared to believe that the primary responsibility over financial preparation fell on auditors rather than them. Adding to this were views from the focus group that some company officers are not fully engaged in financial reporting because they see it as a compliance exercise, and that many rely on their auditors to drive the process.
  
• Frequent changes and the increased complexity of Financial Reporting Standards (FRS) were posing a major challenge to some financial preparers.
  
• Survey respondents and focus group participants identified the following as top measures to raise the quality of financial reporting and to make it more relevant: employing and retaining qualified accountants in the finance function; continuous training for the finance team as well as for the board directors and management; funding for new technological support and professional assistance; and support from top management who recognise that external financial reporting is value-adding and not merely a compliance exercise.

Commenting on the results, Mr Kenneth Yap, Chief Executive of ACRA said:

“Quality financial information is the lifeblood of strong and vibrant markets. These survey findings underscore the pressing need to re-examine the responsibilities of each member of the financial reporting eco-system. Directors, audit committees, preparers and auditors must work with regulators to uphold investors’ trust and confidence in our market.”

Mr Chiew Chun Wee, Head of Policy, Asia Pacific, ACCA also said:

“The survey and focus group gave a clear message about the benefits of employing qualified accountants, and the need for companies to see the finance team not as a compliance team but as a communication team that bridges the gap between the company and its investors. For this bridge to have integrity and facilitate clear communication, companies need to give the finance team sufficient training, resources and authority to deal with today’s complex environment."

Seventh Annual PMP Public Report
This year’s report highlights progress made by some audit firms in the public interest entity (“PIE”) segment in establishing strong quality controls even in the midst of an increasingly challenging audit environment. The aim is to share leading practices that contribute to the execution of quality audits.

Audit areas that ACRA would like the audit firms in the PIE segment to focus on are the audits of cash flow forecasts and inventories. Of concern is that these deficiencies are still occurring even after having been identified in previous years. Public accountants should carefully re-examine and address the root causes of these findings.

The report also highlights how the workload of some firms in the non-PIE segment poses a major threat to audit quality. Excessive workloads can cause auditors to overlook issues or compromise on audit procedures. To break out of this mode, firms need to focus on delivering quality audits and charging fees commensurate with the value of their work.

Overcoming Challenges through Collaboration and Quality Assurance
Also at the conference, public accountants discussed how the profession can help companies to improve their accounting, and how audit firms can build a more sustainable professional practice. New tools was also released such as a toolkit “Getting Your Accounting Right” to help companies improve their accounting. The practical guide was developed by CPA Australia and the Singapore Management University’s School of Accountancy. The Financial Statements Review Committee of the Institute of Singapore Chartered Accountants also released a compilation of common financial report findings, for financial preparers and auditors to refer to.