Internal Audit White Paper by the Singapore Accountancy Commission and Nexia TS Public Accounting Corporation, puts together perspectives from practitioners and service providers on enhancing the Internal Audit function:
SINGAPORE, October 23, 2015 – Risk assessments are important for determining how much Internal Audit (IA) resources are required in an organisation. This is a consensus among participants of a roundtable discussion organised by the Singapore Accountancy Commission (SAC) and Nexia TS Public Accounting Corporation (Nexia TS) to gather perspectives on the burning question relating to IA – “How much is enough?”. Their views have been collated into a white paper, outlining key points on how organisations should invest in their IA function as well as the scope of the IA function.
2. While the IA profession has grown in prominence, the IA function in organisations has historically struggled to pin down best practices with regards to its size, budget allocated, the degree to which IA can be outsourced and its place at the (board) table.
3. Drawing references from the Code of Corporate Governance 2012 and the Guidebook for Audit Committees in Singapore, the white paper recommends organisations devote an average of 40 hours for risk assessment to chart the risk universe, which would form a strong starting point for determining the IA scope that is then linked to the pertinent risk areas of the organisation.
4. The risk assessment was put forward as the preferred means for drawing up the IA scope in a proactive and forward-looking way, as compared to the retrospective method of using the budget ring-fenced for IA.
5. The COSO Internal Control – Integrated Framework was further proposed for use in designing, implementing, conducting and assessing the effectiveness of an organisation’s internal controls. The framework, first released in 1992 and updated recently in 2013, is also recommended by the Guidebook for Audit Committees in Singapore.
6. The white paper also gave recommendations on other points regarding the scope of the IA function. These include strategically positioning IA in its line of reporting to maximise the function’s role; creating demand for IA enhanced through frequent communication with stakeholders; and setting up informal discussions in addition to formal meetings to exert soft power.
7. The wish list of participants also included giving emphasis to the Audit Committee (AC), which is charged with increasing oversight responsibilities of the organisation. The AC could leverage on IA to coordinate various assurance activities that contribute towards the overall assurance of internal controls.
8. While the white paper acknowledged that existing regulations do offer some direction to organisations, there is still room for improvement in clarifying the scope of IA and in particular, what the base level of IA work required should be.
9. Mr Uantchern Loh, Chief Executive of SAC said, “The fact that there is no one-size-fits-all solution for the IA function in each organisation, articulates the importance of ongoing industry-led dialogues to identify best practices and guidelines for the profession. The SAC is delighted to host this roundtable with Nexia TS and will continue advocacy efforts to promote IA through research and thought-leadership, setting the stage for Singapore to lead the IA conversation in the global arena.”
10. Mr Henry Tan, Managing Director of Nexia TS said, “Nexia TS would like to take this opportunity to thank Singapore Accountancy Commission for the opportunity to co-host this fruitful roundtable. Considerable insights on the IA Function were shared and I look forward to co-hosting future dialogues with SAC.”
For the list of participants in the roundtable discussion, please see Annex 1.
For the full version of the report, please visit http://www.sac.gov.sg
For media enquiries, please contact:
Senior Editor, Community Building
Singapore Accountancy Commission
Tel: 6325 0536
Marketing Communications Manager
Nexia TS Public Accounting Corporation
Tel: +65 6534 5700 (ext. 861)
Established in April 2013 as a statutory body of the Singapore government, the Singapore Accountancy Commission (SAC) is the lead agency in spearheading the development of the accountancy sector in Singapore.
The SAC’s Vision is for Singapore to be the Leading Global Accountancy Hub. This will be achieved through developing for Singapore a vibrant accountancy sector that enables the economy to grow, businesses to thrive and talent to flourish. In fulfilling this mission, the SAC seeks to uphold the values of being relevant, insightful, collaborative and advocative.
For more information about SAC, please visit sac.gov.sg.
About Nexia TS:
Nexia TS was founded in 1993 by two experienced chartered accountants – Henry Tan and Sitoh Yih Pin. After working as managers for one of the international accounting firms, they saw a vision and an opportunity to establish their own organisation – not any accounting firm – but one which is unique in their personalised and well-qualified expertise.
To date, Nexia TS is recognised as an established mid-tier local accounting firm. We have grown significantly in size over the years. Being an independent member firm of Nexia International, we are affiliated to accounting firms in many parts of the world. This means that our clients will get to enjoy personalised, comprehensive and quality services at competitive rates in Singapore and globally. Our reputation for quality has been recognised by clients and accounting professionals. As testimony to this, we are among the first few local accounting firms to be accredited by the Institute of Chartered Accountants in Australia to provide supervision of professionals undergoing traineeship to qualify as Chartered Accountants.
Headquartered in Singapore, Nexia TS has established a strong presence in various countries across the region. Nexia China is a one-stop centre providing advisory services for foreign-invested enterprises in China. NTS Malaysia and NTS Myanmar provide a full suite of corporate advisory
services for our clientele with operations and new foreign investments in the respective countries.
Nexia International is an international network of accounting and consulting firms with origins going back to 1971 making Nexia one of the longest established firms. Currently, with more than 24,000 professional staff serving our clients at over 570 offices in over 110 countries, we are ranked as the top 10 largest international accounting and consulting firms worldwide.
For more details, please visit www.nexiats.com.sg.