On 3 February 2023, the Accountancy Functions (Consolidation) Act 2022 (“Act”) was gazetted. The Act merges the Accounting and Corporate Regulatory Authority (“ACRA”), the Accounting Standards Council (“ASC”), and the Singapore Accountancy Commission (“SAC”) under one entity, which will take on the name of ACRA. The merger was first announced in July 2021 and is expected to take effect on 1 April 2023.
At the second reading of the Accountancy Functions (Consolidation) Bill on 9 November 2022, the Second Minister for Finance, Indranee Rajah (“Minister”), explained how the Government’s accountancy-related functions have evolved over the years.
- ACRA was created in 2004 to consolidate complementary functions in financial statement regulation and audit regulation. ACRA currently registers and regulates public accountants, business entities and corporate service providers.
- ASC was formed in 2007 to set accounting standards that would apply to companies and non-corporate entities such as charities, societies and co-operative societies.
- SAC was set up in 2013 to grow the accountancy sector and related fields in Singapore, including the development of the Singapore Chartered Accountant Qualification which leads to the conferment of the “Chartered Accountant of Singapore” designation.
Rationale for merger
The Minister explained that the merger seeks to achieve the following two key objectives while preserving the existing strengths of the constituent parts:
- Strengthened effectiveness of regulation, standards setting and sector development.
One example cited is sustainability reporting, where ACRA is working to develop an implementation roadmap while SAC oversees capability building and sector development initiatives. The merger will allow for closer partnership and forge a stronger feedback loop between regulatory and sector development matters. More of such cross-cutting issues are expected in the future, for example on the valuation of intangible assets and implications on financial reporting standards.
- Talent development.
Amendments to ACRA Act and repeal of SAC Act
The first set of amendments relates to amendments to the Accounting and Corporate Regulatory Authority Act 2004 (“ACRA Act”), and the repeal of the Singapore Accountancy Commission Act 2013 (“SAC Act”).
The SAC Act currently provides for SAC to perform the functions and powers relating to the growth and development of the accountancy sector and its related fields, such as business valuation, and also provides for SAC to register persons as Chartered Accountants of Singapore, as well as handle issues relating to the suspension or termination of such membership.
Part 1 of the Act will amend the ACRA Act to allow ACRA to take on the functions and powers that currently reside with SAC, and will also provide for SAC’s assets, liabilities, records and employees to be transferred to ACRA, with no change to the employment terms of SAC’s employees.
Consequentially, the SAC Act will be repealed, and SAC dissolved accordingly.
Amendments to Accounting Standards Act 2007
The second set of amendments, set out in Part 3 of the Act, pertains to amendments to the Accounting Standards Act 2007.
Currently, ASC sets accounting standards that apply to companies, charities, societies and co-operative societies in Singapore.
Following the merger, the Act (1) provides for an Accounting Standards Committee to be established within ACRA and for the appointment of its members to be approved by the Minister for Finance, as is the case with the current appointment of members to ASC, and (2) confers the accounting standards-setting function for companies, charities, societies and co-operative societies in Singapore on ACRA to allow the Accounting Standards Committee (which will be reconstituted under ACRA) to continue performing its function of setting accounting standards in the same way ASC does currently.