Speech by Mr Louis Ng Kok Kwang, MP for Nee Soon GRC, at the Second Reading of the Accountants (Amendment) Bill (Bill No. 25/2022)
This Bill will strengthen the audit regulatory regime and the complaint and disciplinary process for public accountants and accounting entities.
I have three areas of clarification.
Refusals to undergo practice monitoring programme and review
My first clarification has to do with the refusals to undergo practice monitoring programme and review by public accountants and accounting entities. I have two questions.
First, under the new sections 38A and 38K, public accountants and accounting entities may be suspended for up to two years if they refuse without a reasonable excuse to undergo a practice monitoring programme or a review, respectively.
Can Minister provide examples to explain what constitutes a reasonable excuse under these sections?
Second, section 38K(6) lists the scenarios where a public entity is deemed to refuse to undergo a review. These include refusing to allow a practice reviewer to inspect documents or refusing entry to premises.
These actions are clearly made by individuals, who act of their own accord, possibly in defiance of their accounting entity’s instructions.
Can Minister clarify what the Oversight Committee or the Court should consider in determining whether acts of refusal by individuals are attributable to an accounting entity?
Safeguards for a better review decisions
My second clarification has to do with the practice review of a public accountant, as set out in sections 37 and 38.
Based on the report of a practice reviewer, the Practice Monitoring Sub-committee provides recommendations and the Oversight Committee makes orders.
Neither authority seems to have the remit to conduct further investigations.
Can Minister share whether and how the Sub-committee and the Committee can conduct further investigations so they can make a more informed decision?
Is there any opportunity for a public accountant to present their side of the story to the sub-Committee or Committee before an order is served? After all, once an order is served, it could be 30 or more days before the General Division of the High Court responds to the public accountant’s appeal.
And even if successfully appealed, an order may still have serious professional consequences for the public accountant. So it is important to ensure the right decision is made the first time.
Appeals against orders of Oversight Committee
My third clarification has to do with appeals against the orders of the Oversight Committee.
Various sections of the Bill provide a public accountant or accounting entity who is aggrieved by an order of the Oversight Committee to appeal to the General Division of the High Court.
To ensure that there is meaningful access to review by the Court, can Minister share if the Oversight Committee will as a matter of course provide a written decision on the basis for its orders?
This will enable the public accountant or accounting entity in question to consider whether any appeal is necessary. This is important given that the costs involved in pursuing an appeal at the High Court can be significant.
Additionally, during the public consultation on the Bill, feedback was provided to MOF and ACRA to redact sensitive information in the inspection report presented to the Oversight Committee to ensure that commercially sensitive firm-level information remains confidential.
While MOF and ACRA noted the feedback, the position taken was that the Oversight Committee will require a full and complete set of information to make considered decisions.
However, MOF and ACRA also acknowledged confidentiality concerns and stated that it intends to appoint only retired public accountants on the Oversight Committee to ensure that sensitive information remains confidential.
Maintaining confidentiality over sensitive information may be a consideration against accounting entities seeking recourse to the High Court.
Once an appeal is filed, sensitive documents reviewed by the Oversight Committee may now become part of the public record.
Accounting entities can apply to the Court for sensitive information to be redacted.
To provide greater assurance to accounting entities, can Minister share if the MOF and ACRA will generally consent to the redaction of confidential information if such an application is made by the accounting entities to the Court?
If not, for what reasons will MOF and ACARA reject such requests?
In summary, I am seeking the Minister’s clarifications on refusals by public accounts and accounting entities to undergo practice monitoring programmes and reviews, on safeguards to improve review decisions and on appeals against orders of the Oversight Committee.
Notwithstanding these clarifications, I stand in support of the Bill.