Contributors from Singapore were asked three questions: What were the highlights/trends in your market last year? (i.e. important mergers, regulatory changes, economic situation etc.); What are the opportunities and challenges for accounting firms in the market?; What are the expectations for the future short/medium/long term?

By Lawrence Chai managing director 3E Accounting

Singaporean government has announced the latest amendments of the Companies Act making the ownership and control of business entities more transparent and thus reduces opportunities for the misuse of corporate entities for illicit purposes, has posed certain challenges to accounting firms where we need to perform more due diligence work to comply with the amended Company Act. However, the amended Company Act does more good than harm, as this will add to the reputation of Singapore as a clean and trusted financial and business hub.

Another noticeable change in the Singaporean business environment is the Accounting and Corporate Corporate Regulatory Authority (ACRA) has revamped its online business filing and information portal (“BizFile”). The enhanced system Bizfile+ covers two main areas:

  • The new Bizfile+ system has been updated to reflect the legislative changes to the Companies (Amendment) Act 2014 and the new Business Names Registration Act (BNRA)
  • The enhanced system incorporates an improved user interface that is more user-friendly and faster.

Some Singaporean accounting firms face difficulties to expand their overseas business portfolio. Common challenges faced by companies when venturing abroad include navigating multifaceted operating environments, understanding complex local tax, as well as regulatory regimes (such as local participation and licensing requirements).  

We would love to see a closer tie between Singaporean government and accounting industry to ensure a healthy growth in revenue, productivity, job creation, employment outlook, professionally qualified workforce, diversity of services offered and volume of work performed overseas. In fact, the government’s support will help us to venture abroad easily as well as further strengthen Singapore’s position as the financial hub in the region. On top of that, the Singaporean government has a positive approach to the Chinese’s One Belt One Road initiative and it will definitely bring a multiplicity of advantages to Singaporean economy. We can expect more business opportunities and thriving economic growth in the country.

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By Sanjay Mahnot, senior partner, Stamford Associates LLP, Singapore, member of ANTEA

Many analysts and experts are predicting a recession in the global economy due to Asia’s economic slowdown especially in China and uncertain economic behaviours of the world’s major markets. Despite the gloomy economic outlook, the trend in Singapore in 2016 is largely steered towards promoting the growth in Information Technology (IT). The Singapore government has been exploring ways to increase productivity through IT which can be seen from the extended and increasing budget put into it. This is such as the Productivity Innovation Credit (PIC) scheme and SPRING’s Capability Development (SCD) Grant, where the government will be seen to increase its budget by approximately $600m across the next three years from 2015.

We can also expect to see increasing numbers of FinTech firms starting up in Singapore as the Monetary Authority of Singapore (MAS) has been said to commit $225m over the next five years to grow FinTech through FinTech schemes. The successes of IT in the market can be seen from how the smaller players in the market such as Uber and Airbnb which managed to flip the market of taxi services and the hoteling industry. This is a very significant move for Singapore as small and medium enterprises (SMEs) makes up 99% of the country’s enterprises and hires 70% of the Singapore’s workforce.

The Singapore government is hoping to promote the use of IT to help grow these enterprises, increase their productivity and ability to provide greater value-added services. The trend will be expected to follow through the next few years in order to promote growth in the Singapore economy, as well as to manage the fall in economic performance across other sectors such as the oil and gas industry worldwide.

Singapore’s move to promote IT and FinTech has made accounting much more accessible for new start-ups and existing businesses. It is a double-edge sword for accountancy firms. Lesser business needs advisory and accounting services as information are available at their fingertips and there are apps that readily provide them with easy-to-use accounting solutions. However, the information is not as easily understood as they seem like. There is overwhelming information for businesses and accountants to digest.

In addition, the accounting standards are getting increasingly demanding. With the upcoming application of IFRS 15 (FRS 115), more time and effort is needed to understand how to comply with these new standards. Hence, we might be able to see more specialised services in the market giving advice for businesses due to the increasing complexity for accounting.

The increase in complexity for accounting is coupled with stricter Singapore Standards of Auditing (SSAs) and the regulations in Singapore for anti-money laundering and terrorism financing called EP200. This will need more corporate control for compliances related services which the accountancy firms will require more time and effort to provide the same assurance service than before. With this, the accountancy firms will have to consider new ways to increase productivity by exploring new innovative methods to survive the increasingly demanding standards.

On the other hand, tax compliance and company laws are also changing every year. There are always new definitions for companies and audit requirements which will require continuous learning. One of such examples would be the initial introduction of Productivity & Innovation Credit (PIC) and the changes made to the PIC scheme. We need to act and learn fast in order to provide comprehensive tax advisory on such matters. Moreover, the recent changes and addition to the Singapore’s Companies Act such as the inclusion of the Thirteenth Schedule has changed the pre-requisites for audit requirement. We might be able to see more specialised services in the market advising for specific parts of tax and other compliance matters.

Change is the name of the game. Changes are taking place rapidly and it will continue so. It is not possible to stop the change and wise thing to adapt to the changed economy. As the proverb goes that you can stop a strong “army” from proceeding further, but you can never stop a good “idea” from spreading. Internet has revolutionised the way business is carried on.

We feel that it will take some time for the market to get used to these changes and adapt to them. Singapore has a fast paced economy where changes and evolutions are always taking place. In the short term, we may see more FinTech firms sprouting. However, it is all working on the idea of survival of the fittest in this economy in the long run.

Accountancy firms in Singapore will need to keep changing, adapt and adopt these FinTech to move further ahead with time. We also have to rethink the old business model and be flexible to changes. We should consider collaborations between small and medium accountancy firms by sharing information, programmes, feedbacks and improvements. Basically, we should move together towards where the world is going tomorrow to survive and grow. As stated above challenges will result in more opportunities for the professional as they are the two sides of the same coin.


By Grant Thornton Singapore

The Singapore economy is estimated to grow between 1% and 3% by the Monetary Authority of Singapore (2% in 2016). Growth is resulting from the pickup in global demand. The turnaround in the Global IT cycle has assisted trade related sectors particularly semiconductor and precision engineering industries however growth in the broader manufacturing sector will remain patchy. Financial services and demand for services in the ICT services sector is expected to grow. However, growth in the services sector will be hampered by weak domestic consumption.

Cybersecurity is a focus of the Singapore government, the Ministry of Information and Cyber security Agency of Singapore have proposed a Cybersecurity Bill that is currently in the process of public consultation, the draft bill requires critical information infrastructure owners in Singapore to report security breaches and some cyber-security vendors to be licensed.

Traditionally, the Singapore accountancy profession has been dominated (in number) by audit related services. However there have been intensified efforts by the broader profession to move up the value chain into consultancy and advisory services.

Singapore based, GIC, one of the world’s largest global investors, with well over US$100 billion of assets in more than 40 countries worldwide, said it was turning cautious and expected returns to slow over the next decade, given high valuations, uncertainty over monetary policy and modest economic growth. The general feedback from the Singapore market has been that it is getting tough to identify good investments with valuations being driven up by increasing competition for deals.

Singapore M&A deal values have been on a downward trajectory since 2013. The subdued deal activity is largely due to China’s continued deceleration in growth, which has a knock-off effect on South East Asia resource rich economies which are heavily reliant on Chinese demand. Companies are struggling with over capacity, with some on the brink of default and distress. This may create opportunities for industry consolidation, especially in mining and shipping. The first half of 2017 saw 104 inbound deals (US$ 8m), 190 outbound deals (US$ 29m) and 89 domestic deals (US$ 5bn) in Singapore. Real estate was the more active sector accounting for 29% of activity, followed by healthcare at 25%.  

Singapore’s global reputation is as a trusted hub for business and finance. This is supported by high regulatory standards and corporate governance framework. Quality is the cornerstone of Singapore accountancy practices and financial reporting standards. The challenges for Singapore businesses are they are able to seize opportunities beyond Singapore’s shore? Do they have the market capability and cross border cultural knowledge to compete overseas? The success of Singapore accountancy firms will be dependent up the strength of their global networks and ability to provide seamless suite of integrated services cross border, competing on quality not price.

With effect from 11 March 2017, any sale and purchase agreement (SPA) involving the transfer of shares in Singapore companies must be stamped within 14 days of the execution of the SPA (if the SPA is executed in Singapore). Earlier, SPAs were not required to be stamped, only the instruments of share transfer. With the amendment, SPAs will now need to be stamped within the prescribed period once executed. The practical implication is that under the new system SPA is to be stamped before completion of the transaction if completion is scheduled to occur on a date longer than the prescribed stamping period i.e. 14 days from the execution date of the SPA.

Effective 1 January 2018, all countries reporting under IFRS will adopt the new IFRS 15:  Revenue for contracts with customers.  This is not unique to Singapore, it is a global issue.  This is one of the largest changes in the accounting standards in some time, and the complexities within create a challenge for just about every company.  Market observations of the effect of the new standard, is that many companies are well behind with implementation and struggling on how to comply with the standard.  There is significant change in the way some businesses structure contracts, evaluate their own services and deliverables, record revenue, and disclose within the financial statements.  Given the risk in the appropriate adoption of the standard, there is a clear market for advisory services in this area for non-audit clients to add significant value.

Although not a member of the OECD, Singapore has signed up for the BEPS Actions. The Inland Revenue Authority of Singapore (IRAS) has a well- publicised focus on ensuring that businesses forming part of a related party global supply chain have substance in Singapore and substantiate their arm’s length pricing policies. Singapore has required formal Transfer Pricing Documentation since FY 2015 and is shortly to introduce Country by Country Reporting (CbCR).

One part of Singapore’s future economy is Digitisation. In the 2017 budget Finance Minister Heng hinted heavily that in the increasing globally digitised economy Singapore will consider options to change or refine its current GST system. It is anticipated that, in line with many other global economies, Singapore will look to implement measures to ensure that digitised services, received in Singapore, are taxed in Singapore.

Singapore is part of the global economy and its economy is linked to global influences. Depending upon one’s perspective there is a broad sense of optimism for business in Singapore underpinned by its status as a trusted regional and global hub.

Singapore is improving its regulatory environment for deal-making. The Personal Data Protection Act helps reinforce data security during the due diligence process. Singapore is also effecting legislative changes to its bankruptcy regime, fostering a more rehabilitative environment and facilitating risk assessment.

Singapore government 2017 Budget support to industry as well as bringing forward public infrastructure projects will stimulate the construction sector in the short term, however with a permanent 2% downward adjustment to the budget caps of all Ministries and Organs of State from FY2017 onwards, although fiscally prudent and creating “white space” for the governments future discretionary spend, will have an over the horizon impact.

Further the focus from the government to grow the 2nd tier companies in Singapore, i.e. Singapore local businesses as opposed to attracting MNC’s, will create opportunities to service dynamic local businesses in the future. Combined, with a priority to invest in education for the local workforce will provide a stronger supply of local resources.  This may reduce the need for sourcing talent outside of Singapore.


By Nexia Singapore

Singapore beat expectations to register a 2.9% year-on-year economic expansion in the final quarter of 2016, contributed by the 11.5% year on year jump in manufacturing growth. This brought overall growth in 2016 to 2%, surpassing the 1.9% of a year earlier.First quarter of 2017 reported 2.7% year-on-year growth owing to rise in electronics export. A survey of professional forecasters conducted by Monetary Authority of Singapore (MAS) cited an expected growth 2.3 % for 2017. Official forecast by the Singapore government puts economic growth at 1 to 3% this year.

Singapore is expecting to benefit from the regional uplift under the impact of the China Belt & Road initiative. Though the B&R investments are unlikely to flow to Singapore, the process of upgrading ASEAN’s infrastructure can benefit Singapore companies looking for opportunities in the region. Since the B&R initiative was introduced in 2013, China’s outward direct investment into ASEAN grew by 7.5% in 2014, and surged by 87% in 2015. Of these ODI funds, Singapore has received US$11bn into its service sectors, particularly leasing and commercial services. Most of the funds are however channelled to other projects in the region. Singapore’s established capital market makes it the natural infrastructure finance hub for the region. The initiative certainly has the potential to brighten ASEAN macroeconomic outlook which can boost Singapore’s economy and companies that are based here.

In the regulatory landscape, following a consultation paper on “Sustainability Reporting: Comply or Explain in January 2016, the Singapore Stock Exchange (SGX) has formally introduced the sustainability reporting requirement on 20 June 2016. Primary listed issuers on both SGX Mainboard and Catalist will have to issue a sustainability report on an annual basis, no later than five months after the end of each financial year, covering five primary components: material environment, social, governance (ESG) factors; policies, practices and performances; targets; sustainability reporting framework; and their Board statement. The new requirements take effect for any financial year ending on or after 31 Dec 2017. For the first year, companies will be given up to 12 months from the end of the financial year to publish their report.

On 3 November 2016, the Inland Revenue authority of Singapore (IRAS) introduced a new requirement for companies to complete a Related Party Transactions Form (RPT Form) effective from year of assessment (YA) 2018.Companies with value of related party transactions exceeding $15m for the relevant YA must submit the RPT Form together with the corporate income tax return. The RPT reporting requirement provides the IRAS with relevant information to better assess companies’ transfer pricing risks and to improve on the enforcement of arm’s length pricing requirement.

Tight labour market, coupled with high turnover rate, remains a challenge for the accountancy sectors.The appeal of a career in accounting and finance has not diminished over the years. However, with businesses growing locally and regionally, there will be a widening gap between demand and supply. In addition, smaller practices are losing out to bigger practices and multinational companies who tend to lure away qualified candidates with higher pay and better benefits.

Accountancy profession is facing downward fee pressure and risk of non-recovery as the general economy slows down and companies run into cash problems. Accountancy firms have to be more vigilant and diligent in their client acceptance evaluation and fee collection.

Technological advancements are transforming and disrupting industries. Digitalisation has driven a big data boom. The predictive power of big data (which include non-financial and unstructured information) can enable top management to make financial decisions based not on historical events, but on what is likely to happen in the future. While the value of applying big data to decision-making is clear, its application to accounting is still open to the opportunities and challenges.

Given that big data is voluminous, rapidly generated from multiple sources and subject to biasness, it poses significant challenges for analytics. The accounting and auditing professions must learn to embrace “Big Data” and learn new analytical techniques. This may involve adopting sophisticated data mining applications, advanced regression models and the development of other intelligent analytical tools. In light of the above, there is promising scope for accountants to expand their skills and add further value to the work that they currently do.

Sustainability reporting is another development that is gaining importance and traction in the market.

Today, businesses operate in a volatile, uncertain, complex and ambiguous environment. Furthermore, companies are taking different forms and unique models. The accounting profession has to innovate and adopt new skills and technologies to complement such businesses. In light of this, accountants are becoming multi-disciplinary and branching out into new fields such as risk management, forensics accounting and business valuation etc.

In a joint publication by the Institute of Singapore Chartered Accountant (ISCA) and Institute Chartered Accountant of England and Wales (ICAEW) titled “Industry Perspectives: Future of Professional Learning and Entrepreneurship”, which was launched recently, highlighted that accountants of the future would have to go beyond acquiring technical competencies to develop multidisciplinary skills. This is because business issues are now getting more complex, and many require diverse perspectives and methods to solve.

It is also important for accountants to foster synergies and relationships across other industries such as information technology, finance and legal. This would expand opportunities for clientele growth and even regional expansion in their practice.

As Singapore continues to strive to be a regional hub for accountancy, it will continue to innovate and create opportunities for the industry. We have seen such great stride in the International arbitration Maxwell Chambers successfully making Singapore a major arbitration hub for Asia and this bodes well for accountancy support as well. Similar infrastructures will be built on the pillars of valuation, forensic accounting and internal audit and governance which will further strengthen Singapore roles. Accountancy firms here will be poised for growth and will have no choice but to have regional footprints to serve the needs of the clients for specialised skills.


By Magdalene Ang, director of R Chan & Associates PAC (Morinson KSi)

Last year, the Singapore Companies Act was amended and changes were made in respect of the criteria for mandatory audit exemption rules for Singapore incorporated entities. As a result a significant number of companies fall outside the scope of mandatory audits. This resulted in a substantial decrease for audit assurance services which has a disproportionate impact on the business of SMPs verses their peers in the larger firms as audit assurance service is generally the SMPs’ bread and butter and SMPs tends to have more clients which are affected by the increased audit exemptions.

Of course our industry like many other industries are also affected by increasing complexity of regulations, standards and corporate governance as well as an increasing pace of digitalisation.

In addition, we see the plunge in crude oil prices in recent years having a significantly impact to business specifically in the oil and gas industry. This inevitably had an impact on the industry’s service providers including accountancy firms in terms of reducing fees and clients drop-out.

Singapore is situated in Asia which is the World’s fastest growing economy. This, coupled with the high usage of digital devices and the evolvement of the Asean Economic Community opens up great business opportunities for accountancy firms.

As companies expand overseas and regionalise their businesses, the need for accounting and business assurances such as business valuation, financial advisory, risk management, due diligence and restructuring will increase.  

Therefore, we envisage that there will be an increasing demand by Accounting Entities in Singapore to seek collaborations & partnerships for regional growth in order to meet the service demand revolving around Asia’s growth.

The business climate is changing. Doing business in Singapore is no longer the same with the coming into effect of the changes to the Singapore Companies Act on the new audit exemption. Deregulation kicks in. Lesser audit may be required as the market shrink in size.  Accounting entities that are still carrying out audits in the same old ways five or ten years ago may realise that profit margins are eroded due to increasing overhead costs.

In the mid to longer terms, we will definitely expect more regionalisation and diversification into non-audit related work such as tax advisory (such as transfer pricing, tax planning), business consulting, restructuring and so on.  Compliance is no longer the trend in the next 5 to 10 years down the road.  New skills sets have to be acquired to market and strategies the Firm’s services. Networks and Referrals would be critical to contribute to the development of human and social capital of the Small & Medium Practices and to enhance visibility.