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WEATHERING THE STORM
Undoubtedly, one of the biggest storms to hit mankind in 2020 was the Covid-19 pandemic. Covid-19’s impact on businesses has been wide-ranging, including disruptions in the execution of audit procedures, adjusting operations to comply with Covid-19 measures, loss of business and clients, cash flow issues and the threat of job loss. The pandemic also raised a wide array of challenges for accounting and auditing professionals, from disruptions in the execution of basic audit procedures such as sighting of original documents and fixed assets to making complex judgments on the impact of the pandemic on going concern assessments.
To help members cushion the impact brought about by Covid-19, we rolled out a myriad of initiatives, including an assistance package valued at up to $3.6 million. As part of the assistance package, ISCA rendered financial support to members who needed help in three areas. Firstly, a CPD support scheme was rolled out to support members in upskilling for the future, where every ISCA member was given a $100 CPD voucher to offset their ISCA course fees. ISCA granted a 50% reduction in membership subscription fees upon request, or a fee waiver in exceptional circumstances. Lastly, a financial deferment scheme was offered to members who would like to enrol in ISCA courses and qualification programmes which would enable them to defer payment of course fees by up to 80% till 31 December 2020.
ISCA Covid-19 Working Group
ISCA formed a joint Covid-19 Working Group (WG) in April 2020 to pre-empt potential accounting and auditing challenges that could arise from the Covid-19 pandemic. The WG, in collaboration with ACRA, is co-chaired by Hans Koopmans, Chairman of the ISCA Auditing and Assurance Standards Committee (AASC) and Reinhard Klemmer, Chairman of the ISCA Financial Reporting Committee (FRC) and comprises members who are subject matter experts from the accountancy profession.
A total of 33 Frequently Asked Questions (FAQs) were answered to address areas such as going concern, accounting for government relief measures, post-balance sheet event, fair values of investment properties, onerous contracts, impairment, significant valuation uncertainties, remote working arrangements, and impact to entity’s internal controls. For auditors, key challenges addressed include dealing with areas more susceptible to fraud risk, considering the reliability of electronic audit evidence, and implications of the pandemic to the audit opinion.
Accounting guidance on Covid-19 Government Relief Measures
ISCA has also issued a slew of Financial Reporting Bulletins (FRBs) from April 2020 to December 2020 to address divergence in views with respect to the accounting for the following Covid-19 Government Relief Measures:
- Singapore property tax rebate from the perspective of the landlord and the tenant (FRB 5)
- Payouts under the Jobs Support Scheme (FRB 6)
- Rental relief and additional rental reliefs under the Rental Relief Framework for SMEs and Non-Profit organisations (NPOs) scheme from the perspective of the landlord and the tenant (FRB 7)
- Foreign worker levy waivers and rebates under the Foreign Worker Levy Waiver & Rebate scheme (FRB 8)
Auditing guidance for group auditors who are unable to access component auditors’ work papers due to travel restrictions arising from Covid-19
In light of travel restrictions arising from Covid-19, ISCA issued AGS 12 Group Audits – Inaccessibility of Component Auditor’s Work Papers and Other Considerations in February 2020 to provide guidance to group auditors in performing alternative methods of reviewing component auditor’s work papers where they are unable to obtain those work papers.
ISCA Technical Live Webinar 2020 – Insights into Accounting for Covid-19 Government Relief Measures
The above webinar explained key accounting implications arising from the slew of Covid-19 Government Relief Measures as well as key thought processes and deliberations underpinning the development of ISCA Technical Guidances issued to address those accounting implications. The highlight of the event is the launch of FRB 7 on the accounting of rental relief and additional rental reliefs under the Rental Relief Framework for SMEs and NPOs from he perspective of the landlord and the tenant.
ISCA Technical Live Webinar 2020 – Insights into Auditing amidst Covid-19
The above webinar provided insights into the pertinent auditing implications arising from Covid-19, including going concern assessment considerations and implications on auditor’s reporting. The webinar also addressed significant valuation uncertainty arising from the pandemic and audit considerations when executing audit procedures under a remote working environment.
We created a virtual Covid-19 Resource Centre (www.isca.org.sg/covid-19-series) with regularly updated content related to Covid-19 curated for accountancy and finance professionals. This included the ISCA Covid-19 Navigator, which summarised the assistance schemes and resources from the government and ISCA to support individuals and businesses affected by the pandemic. The resources were categorised for employees, business owners and key decision makers in organisations, so that users could easily identify the schemes relevant to them. The Covid-19 Resource Centre also featured Technical Guidance from ISCA on accounting and auditing issues arising from the Covid-19 situation as well as government announcements, such as advisories and clarifications on auditing firms’ operations.
Together with Workforce Singapore (WSG), the Institute launched a career placement portal in April, with over 2,000 job vacancies, from junior positions to C-suite roles, catering specifically to the accountancy community. ISCA and WSG also held a virtual career fair for accountancy and finance professionals in May. The virtual career fair connected jobseekers with employers for roles in areas such as finance, accounting, tax and audit amid Covid-19 social distancing restrictions during the circuit breaker period. The fair attracted more than 11,000 visitors and more than 2,500 job applications over two weeks. ISCA’s Career Matching Services, launched in April 2020, helps members showcase themselves to potential employers. This initiative also provides firms with a pool of Chartered Accountants from ISCA’s membership base, as they can search for talent in the profiled list and contact ISCA to facilitate the matching.
With heightened awareness among companies of the need to anticipate and manage risks in an increasingly dynamic and uncertain business and economic environment amid the Covid-19 pandemic, ISCA and Singapore Management University (SMU) co-organised the Governance Matters breakfast talk series in 2020. The two live webinar sessions, which attracted 250 to 300 participants per session, focused on global trends in governance and their potential implications on business sustainability, as well as the business case for promoting diversity and practical tips on how to promote diversity in the workplace and on boards.
The IS Chartered Accountant Journal featured a three-part Covid-19 Special in its May to July issues. The series of articles helped readers understand the impact of Covid-19 from both a business and a technical perspective.
To obtain more in-depth understanding of the challenges faced by SMPs in view of Covid-19 and changes in government policies, ISCA organised an SMP focus group to hear the views of the SMP community on the current business environment as well as their concerns. The 10 SMP participants discussed the pandemic’s impact on their current business operations, their manpower issues as well as their business outlook for the coming year. The group also discussed how the pandemic has accelerated their firm’s digitalisation agenda and the impact on their business model.
ISCA also recognised the business valuation issues and other challenges audit practitioners might encounter, given the emphasis on fair value measurement and its significant impact on financial statements. This prompted the launch of the Business Valuation Best Practices for SMPs programme, jointly developed and organised by ISCA, NTU and Savills. The four-day workshop equipped attendees with the practical skills and competencies to set up and manage a business valuation practice with essential risk management and processes in place. With up to 90% funding, this programme was well received by the SMPs.
