On or about 3 September 2020, in an article Instilling Faith in the Figures, Lim Ju May, Deputy Director, and Terence Lam, Senior Manager, Technical, ISCA, discuss the roles of various stakeholders in the corporate governance ecosystem and maintenance of the quality of audits in Singapore.
The fundamental value of an audit lies in the fact that being the most cost-effective mechanism, it provides credibility to general purpose financial statements. Audited numbers are crucial for confidence in the capital markets and to make investment decisions. Audit reports are an important component in the entire financial reporting ecosystem and should perceived to be of high quality.
Corporate governance ecosystem
The Board of Directors who are responsible for a true and fair financial statements and maintaining internal controls, discharges its duties with the assistance of the audit committee, management and internal auditors. A competent finance and accounting team is crucial and not to over-dependence on the auditors.
Standard-setters, regulators and enforcement agencies uphold the structure of the ecosystem by implementing regulations and standards, monitoring compliance, and investigating and prosecuting governance failures while investor watchdog groups stand up for minority shareholders.
Education and training play an integral role for the investing community to keep up with the increasing complexity and sophistication of the financial markets.
The article also discusses the following:
- what is the role of auditor
- quality control, and
- practice monitoring program.
Source: ISCA Journal, 17 September 2020.