It was reported that the Singapore Institute of Directors (SID) had disagreed with a requirement put forth by the Institute of Certified Public Accountants of Singapore (ICPAS) auditing and assurance standards committee. The disagreement lies in the scope of a director's role that includes 'designing, implementing and maintaining internal control... so that the financial statements are free from material misstatement'.

The SID had objected to this role, saying that it 'places unduly onerous responsibilities on directors'. But the ICPAS affirmed that the new disclosure was in line with international standards and it was to ensure shareholders fully understand the delineating roles between directors and managers who prepare the financial statements, and auditors who audit them.

From a business and professional standpoint, I would suggest that the matter necessitates both SID and ICPAS to work out the relevant competencies involved in the preparation of the financial statements and the act of auditing them.

They should distinguish who should possess the competencies to prepare and direct the financial statements (health) of the company and who should be the technical expert to audit the veracity of the statements.

Would the SID clarify with the public what it means when it articulated its ethos on its website: 'To promote the professional development of directors and corporate leaders and encourage the highest standards of corporate governance and ethical conduct.'

I would like to know how the SID could continue to fulfil its obligations and live up to its philosophy when it could not support the minimum standards set out by ICPAS.

I looked up the syllabus in the SID-SMU Executive Certificate in Directorship Module 3: Finance for Directors. The contents are rigorous enough as they cover Accounting, Finance and Shareholder Value.

These topics should amply provide directors with the necessary competencies and minimum standards to discharge their technical and strategic roles for the company.

When a person aspires to lead and direct a corporation, he or she should not shy away from the rudiments of designing, preparing and implementing financial roles and responsibilities.

Perhaps it is time for societies and institutions to seriously re-examine their ethos and principles to avoid being mistaken for paying lip service to their business tenets.

George Lim Heng Chye