SGX moves to tighten auditing of listed companies, raise property valuation standards

SGX announced the proposed changes to its accounting oversight in January 2019.
SGX announced the proposed changes to its accounting oversight in January 2019.ST PHOTO: CHONG JUN LIANG

SINGAPORE (BLOOMBERG) - The Singapore Exchange (SGX) wants all listed companies to appoint locally registered auditors, about a year after it signaled its plans to overhaul accounting oversight.

SGX RegCo, the bourse's regulatory arm, has launched a month-long consultation on requiring firms to appoint an auditor registered with the Accounting and Corporate Regulatory Authority (ACRA), according to a statement. The exchange is also seeking powers to appoint an additional auditor in some cases.

Singapore's regulators have faced criticism of how they handled the collapse of commodity trader Noble Group, which was given a clean bill of health for three years even as an attack on its accounting practices was sending its shares plummeting.

SGX announced the proposed changes to its accounting oversight in January last year. It was reported then that 15 to 20 listed companies did not have Singapore-based auditors.

The proposed changes "will increase the accountability of auditors and improve investor confidence in audits," Tan Boon Gin, chief executive officer of SGX RegCo, said in the statement.

Non-Singapore firms trading on SGX that wish to appoint foreign auditors would also need to designate an additional ACRA-registered auditor.

SGX also wants to raise the reporting standards of property valuation by listed companies, and proposed the following changes:

- Valuers should be independent of issuers, and must have at least five years' relevant experience in conducting valuations

- Valuers should be members of the Singapore Institute of Surveyors and Valuers or a similar professional body in their home jurisdiction

- All issuers and listing applicants should comply with SISV standards for domestic property valuation, and SISV or International Valuation Standards for overseas properties

"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," said Mr Tan.

SGX is carrying out a separate review of practices on business valuation and will be looking to consult the public on proposed amendments.