Directors of two listed companies received warnings after inspectors from the Accounting and Corporate Regulatory Authority (Acra) combed through the 2014 financial statements of 50 companies listed here, Acra said yesterday.
Each year, about 50 of 600 or so Singapore-incorporated companies listed on the Singapore Exchange are selected to go under the microscope as part of Acra's Financial Reporting Surveillance Programme (FRSP).
Acra does not disclose the identities of the companies inspected.
But the number of warning and advisory letters issued by Acra involving one or more instances of non-compliance fell from 35 last year to 23 this year.
Many directors were also making the effort to promptly rectify financial reporting gaps identified by Acra, the regulator said.
This year's FRSP report flagged four areas where it saw the highest instances of non-compliance with accounting standards.
These included the application of new consolidation standards, business acquisitions, impairment of long-lived assets, and fair value accounting of properties.
In particular, the new consolidation-related standards became effective for the first time during Acra's review cycle for the 2014 financial reports.
The standards were developed after the fallout from the 2008 crisis heightened the criticism that some entities were not honestly consolidating the entities they controlled, or funding distressed entities that had not been disclosed.
In one case described in the report, Acra queried a listed firm that had avoided consolidating a loss- making investment into its bottom line by way of a structured transaction - an arrangement packaged to achieve a certain outcome.
Overall, Acra found a good level of quality in financial reporting, although it noted some companies still make straightforward errors in their cash flow statements.
Acra's surveillance programme was initiated in 2011 and beefed up in 2014. It is meant to address the apparent lack of ownership over financial reporting from company directors here.
Perhaps the best known example of Acra's surveillance programme is China Environment. Last year, Acra issued warning letters to two of its directors after finding it had recognised construction revenue prematurely which did not reflect the extent of work done. China Environment was also made to re-state and re-file its financial statements for 2013 and 2014.