Under the Financial Reporting Surveillance Programme (the "FRSP") established by the Accounting and Corporate Regulatory Authority (the "ACRA") in 2011, the ACRA reviews selected financial statements for compliance with the financial reporting requirements under the Companies Act.
On 23 April 2014, the ACRA issued Practice Direction No. 2 of 2014 entitled "Directors' Duties in relation to Financial Reporting and Review and Sanction Process of the Financial Reporting Surveillance Programme Administered by ACRA" (the "Practice Direction"). The Practice Direction outlines the duties of a director in relation to financial reporting and the review and sanction process of the FRSP. Annex A to the Practice Direction provides further guidance to directors on carrying out their duties in relation to financial reporting. The guidance provided relates to matters such as the preparation and review of financial statements, financial literacy, and the knowledge, competence, experience and integrity of senior management. The Practice Direction applies to the financial statements reviewed under the FRSP with effect from 1 April 2014.
During the period from 1 April 2014 to 31 May 2015, the ACRA will be reviewing selected financial statements for financial years ended between 1 January 2013 and 31 December 2013 (the "FY2013 Financial Statements"). To guide directors and other financial statements preparers as to the focus of the FRSP review for FY2013 Financial Statements, the ACRA has issued Financial Reporting Practice Guidance No. 1 of 2014. This will remind directors of the risks of misstatements and/or non-disclosures in the financial statements as well as the information needs of shareholders and other stakeholders. For more transparency, the ACRA will publish annual reports summarising the activity and findings of the FRSP for the past year. The report will include the findings of the financial reporting breaches without identifying the companies.
The following materials are available from the ACRA website www.acra.gov.sg: