Experts say there needs to be more dialogue between accounting, auditing standards

Experts say there needs to be more dialogue between accounting, auditing standardscr
By Janice Teo | Posted: 12 May 2010 2208 hrs

	Photos 1 of 1 Motorists travel over the bridge against the view of Singapore skyline.

 
SINGAPORE: It's crucial to make financial reporting more relevant to stakeholder needs in the wake of the global financial crisis two years ago. This is the view of accountants attending an industry conference in Singapore.

They said that besides evolving financial reporting standards, it's also important to have consistency between accounting and auditing practices.

For now, they said, auditing practices are still playing catch-up.

The global financial crisis has changed the way many businesses look at their financial health.

For the accounting industry, the crisis has highlighted the disparity between accounting and auditing standards.

Experts said while accounting standards were able to adapt and respond very quickly to the crisis, auditing standards were not keeping pace.

So accounting and auditing professionals should talk more.

Tham Sai Choy, member, Singapore Accounting Standards Council, said: "All the numbers need to go through the auditors before they finally go out as auditor information to the market. So that dialogue between the accounting standard setters and the auditing standard setters is something that we need to go and think about again."

Experts also said that while there is a general awareness within the industry of divergence between the auditor and accountant, there have so far been no specific dialogues to address the issue.

Mr Tham said key areas that need work are fair value accounting and auditing of future cash flows.

And where public money is involved, experts said financial reporting needs to adhere to much higher standards such as having a more robust disclosure regime.

M Faiz Azmi, chairman, Malaysian Accounting Standards Board, said: "There are concerns from the companies itself in terms of commerciality, competitiveness, and so on. But if you are taking money from the public, then in a way you have to give up some of that secrecy."

Going forward, experts said the accounting profession should watch economic cycles and deal better with risk analysis. 

- CNA/vm

- wong chee tat :)