Reflections on Singapore's Accounting Profession

ISCA (Institute of Singapore Chartered Accountants) has just celebrated its 60th anniversary and our very own PM-in-waiting graced (yes, she was there too) the occasion. He gave an interesting speech about the profession and industry, and the transcript can be found here.
Of particular interest was where he touched on the future of the profession, where he rightly noted the deteriorating state of our supply chain and how the root cause is fee driven:

In fact, all corporate Boards and Audit Committees must appreciate and understand that value that audit brings to the business, value in terms of instilling discipline, deterring fraud, or upholding good corporate governance. In fact, all Board directors must be prepared to pay reasonable fees for quality audits, rather than try to keep fees as low as possible.

His other insights into how to deal with these challenges while valid, fail to, IMO, deal with the elephant in the room.

The new amendments to the Accountant's Act has just been passed, and for the 1,000 public accountants here, these new measures imposed greater penalties on us if we do not adhere to the higher standards mapped out. Public Accountants make up for less than 3% of Chartered Accountants (1k vs 34K) in Singapore, so the interesting point is that 97% of Chartered Accountants are not governed by this Act. And they are also not under equivalent legislature ever since we changed our designation from CPA (Certified Public Accountants) to Chartered Accountants in 2013.

How this came about is that when we were CPAs, this Act applies to us all, i.e. both practising and non-practising. But when the designation was changed, the wording in the Act did not change, so now it applies to public accountants only. And that means all Chartered Accountants who are not Public Accountants suddenly do not fall under the Act.

It's been a decade since the designation and pathways has changed and the climate we see now is a consequence of the decisions made back then. IMO, this change impacted the appeal of accountancy courses as the necessity of these courses to those who want to pursue the profession declined substantially compared to the previous pathway. Hence we are seeing a talent drain or "leakage" that has been slowly building up over the course of ten years.

While that by itself is significant enough, another pertinent point is that a lack of legislative accountability (pardon the pun) on non public accountants also drove the quality of accounting in the industry down. It has been in my experience that very few accountants these days can draft a proper set of financial statements. Heck, I even saw a social media post describing financial statements as statutory accounts and how they are different from management accounts! (Yes, I can't even...)

And to add insult to injury, the poor public accountant is now expected to deliver a higher quality audit when the quality of the accounts they are auditing continues to deteriorate.

I believe these are the true challenges the public accounting profession face and as long as the elephant is still in the room, it is possible that we may no longer have space to breathe in the future.