SINGAPORE (Jan 16): Singapore Exchange Regulation (SGX RegCo) is proposing to strengthen oversight of audits by requiring all listed companies to appoint an auditing firm and audit partner registered with Singapore’s Accounting and Corporate Regulatory Authority (ACRA).

Foreign issuers that wish to appoint foreign auditors must also appoint an auditor registered with ACRA to act as a joint auditor.

The market regulator has launched a month-long public consultation to seek views on a number of proposals, according to a statement on Thursday.

If this proposal is implemented, audits performed for all SGX-listed issuers will effectively be subject to ACRA’s regulatory oversight.

In addition, SGX RegCo is seeking feedback on the circumstances under which it may be appropriate to direct an issuer to appoint an additional auditor to audit the issuer’s financial statements.

This is to address uncertainties in the market in a timely manner, it says.

Under this proposal, SGX RegCo may require that the additional auditor provide a second independent opinion on the issuer’s financial statements or to act as a joint auditor.

The market regulator currently already has the authority to require issuers to appoint independent professionals, as well as special auditors, for specified purposes.

“Reliable and informative financial statements are the bedrock of our financial markets,” says Tan Boon Gin, CEO of SGX RegCo. “Requiring all listed companies to appoint a Singapore-registered auditor and giving SGX RegCo the power to appoint an additional auditor will also increase the accountability of auditors and improve investor confidence in audits.”

At the same time, SGX RegCo is mulling a tightening of the rules to raise the reporting standards of property valuation by listed companies.

The market regulator proposes that valuers must have at least 5 years’ relevant experience in conducting valuations for the type of property being valued.

Valuers should also be a member of the Singapore Institute of Surveyors and Valuers (SISV) or a similar professional body in the home jurisdiction which has the powers to discipline and revoke the membership of the valuer.

In addition, the valuer should be independent of the issuer, and cannot be a sole practitioner or have an adverse compliance track record.

This is to ensure that professionals carrying out valuations of property assets are sufficiently qualified, SGX RegCo says.

To ensure comparability of information for investors, SGX RegCo is also proposing to require issuers and listing applicants to comply with the SISV standards for the valuation of properties in Singapore.

For overseas properties, valuation may be carried out in accordance with the SISV or the International Valuation Standards (IVS) set by the IVS Council.

Summary property valuation reports that are disclosed must contain the information required for prospectus and circulars as set out under the SISV Practice Guide.

“The enhancements SGX RegCo is proposing on valuation are aimed at raising standards and ensuring quality disclosures on valuations of real estate, and is the result of our collaboration with the industry,” Tan says.