3 areas in financial statements Singapore companies must improve on

This was according to a study conducted by professors from NTU and SMU. 

A study commissioned by the Accounting and Corporate Regulatory Authority (ACRA) pointed to a room for improvement in the financial statements prepared by Singapore companies for audits. 

The study, which was conducted by Associate Professor Themin Suwardy from Singapore Management University, and Dr. Lim Chu Yeong from Nanyang Technological University, took into account the financial statements of 412 Singapore-listed companies from 2018 to 2020. Around 280 audit committee chairs and heads of finance were also surveyed to gather their opinions. 

Key findings of the study found that in that time period, auditors suggested 22,051 audit adjustments amounting to $78.67m for the listed companies. 85%, or about $67.08m, of these proposed suggestions were to correct factual errors in the statements. When adjusted, an overall reduction in net income of $1.14m was observed in the financial statements over the three years. 

36% of proposed audit adjustments were also found to be late client adjustments or those identified by companies themselves during the audit. 80% of these adjustments were due to factual errors, with the study believing that this suggests a weakness in the preparation of financial statements.

Also seen over the three-year period were 165 sets of financial statements from 87 companies with at least $100m worth of audit adjustments. All in all, these summed up to $62.26m, or almost 80% of the proposed audit adjustments. Out of the 165 financial statements, 28 companies had over $100m of proposed adjustments every year in the period, which made up almost 50% of the total proposed audit adjustments. 

“The study shows that there is room to further strengthen the finance functions of companies in Singapore to improve the preparation of financial statements. ACRA will work with professional bodies and other stakeholders in the financial reporting eco-system to help companies raise their accounting capabilities and provide guidance on areas they should pay attention to. We will also continue to focus our monitoring and enforcement efforts on companies with higher risks of financial misstatements,” said Ong Khiaw Hong, CEO, ACRA.

Follow the link for more news on

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!