The SEC had recently clarified its stance on what would constitute securities in an initial coin offering and this article gives a good write up on what to expect.
Basically, the SEC stance is substance over form. It does not matter if you don't label your token a security. What matter is the economic reality of the underlying value of the token issued.
As MAS usually takes guidance from MAS, it would hardly be surprising if Singapore too follow this interpretation in the future.
Found a good summary of all our local taxes by Dollars & Sense.
In the face of immutable technology, auditors could face a disrupted future where they are replaced by computers. So news like this one would certainly do the profession no favors.
"KPMG audits had shown an "unacceptable deterioration" and will be subject to closer supervision, the Financial Reporting Council said.
Since the Carillion collapse earlier this year, public sentiment towards the Big Four in the UK has been very poor and there are calls for them to be disbanded. One wonders if this finding could be the straw that finally breaks the camel's back.
Stepping out from last week's Singapore Accountancy and Audit Convention, the message is clear and loud : Go digital or be left behind. But in this bid to go digital, I often wonder if we run the risk of making ourselves obsolete in the end.
Or, at the very least, become less useful and relevant.
For example, with the software available nowadays, it is quite possible to generate a financial statement with ease. Gone are the days when your balance sheet don't balance and you spend hours trying to find that missing dollar to balance it.
But when we were trying very hard to balance the books manually, we were also developing a skill set. Our attention to detail skills and our analytical skills were not only being honed, but they were put to the test as well. If this was taken away, can we truly develop these skills to our fullest? One might argue, yeah but with the time freed, you can look for other avenues to hone those skills.
While that might be true, I am skeptical that other avenues can provide the same level of training and discipline.
Even now, an auto-generated financial statement is not guaranteed to be 100% in compliance with accounting standards. But if a novice never learned how to prepare one without just pushing a few buttons, how would he or she know if the end product contains any errors?
And think about it; if the future is that financial statements can be generated error-free with a single click of a button, where does this leave the profession?
Similarly, if everything we do as accountants now can be generated with a single click of a button, we will be easily replaced by robots who can be easily programmed to just push that button.
The big argument for automation is that we make use of technology to do away with the menial tasks. And by doing so, we free up time to do the more value added stuff. This is all well and good, but we must be careful not to treat all menial tasks as non-essential to the development and training of a capable accountant.
I often tell our new audit hires that our training process is like an apprenticeship. Just like a master chef has to start his training cutting vegetables and other prep work in the kitchen before he actually does any cooking. Just like a blacksmith starting his apprenticeship working the furnace before even pounding on his first metal. Can a chef become a Michelin star chef if he relied on machines doing the prep work right from the start? I highly doubt so.
So it is the same with our profession. We too need to hone the skills that will one day enable us to gain mastery in our profession.
The danger is not just the skills but also basic knowledge as well.
Today, most accounting software can do the bank reconciliation for you with a single click of the button. And many accountants who have used such software seems to no longer know how to perform them. So much so that a recent trainer revealed to me that he was surprised that there is actually demand for his bank reconciliation seminars.
Many accounting software out there also do not rely on you knowing double entry to use them. So similarly, it is quite possible for a novice to lose this basic knowledge just months after graduating!
Don't get me wrong, I'm a big advocate of technology. Here at Echtual, we pride ourselves in utilizing the latest technological innovations. But only where it doesn't dull the skills we deem important to be an awesome public accountant.
The biggest challenge in going digital must be not allowing it to be our crutch. Only by doing so can we stand ready to deliver when technology fails and not face the specter of being displaced by it.
Our founder, Vincent Lee was invited by Novum Capital to share his insights on how cryptocurrencies can be taxed in Singapore under the current regime.
More than a hundred participants signed up for the event held at Mox on 31 May 2018 to hear how tax authorities here have caught up with the burgeoning blockchain industry.
To know more about accounting for cryptocurrencies and taxation of cryptocurrencies, please contact us today!