Surprised and humbled by the turnout despite being the last speaker on the last day of the Accounting and Finance show. Thank you for your show of support and I hope the session (Bookkeeping Automation - Top 5 Things To Consider) was useful to you.
And in case you've missed it and want to find out more, drop us a line here.
Our Founder, Vincent Lee will be speaking at the inaugural Accounting & Finance Show Asia in Singapore on Day Two, 17 October 2018.
He will be speaking about "Bookkeeping automation: The top 5 things you need to consider" in the Accounting & Bookkeeping Theatre at 15:30 (3:30pm).
Come and learn more about the digital revolution happening in the industry and let us help you begin your digital journey today!
We are excited to be in our new office (with views like this, who wouldn't?)!
Our new location is :
5 Temasek Boulevard
#17-131 Suntec Tower 5
Wishing all our Muslim clients and friends Selamat Hari Raya Aidiladha!
People are often surprised by my less than enthusiastic take on the usage of existing off-the-shelf audit software. But if you ask me, RPA makes a lot more sense than what an audit software can offer for the profession.
This article here will shed more light on what could transform the audit and accounting landscape in the years to come.
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!
Our Managing Director, Vincent Lee will be sharing his insights on tax treatment on crypto-assets in this event : https://lnkd.in/f5qbejN #crypto #tax
With today's focus on big data and data analytics, it is perhaps surprising to know that it is possible to fight against the monopolization of data.. As this article (Why the Web 3.0 matters and you should know about it) relates,
"The next web, they envisaged, would take nostalgic turn to the vision of the web 1.0: more ‘human’ and more privacy. Rather than concentrating the power (and data) in the hands of huge behemoths with questionable motives, it would be returned the rightful owners."
The article then highlights the new apps that are poised to take over the existing ones :
With the brouhaha surrounding Facebook and Cambridge Analytica, China's social credit score system, such developments are heartening news indeed. As much as all things internet are now very much a part of the fabric in society, to know that we can avoid being slaves to the system is a very big deal.
How is this done? The answers seems to be this :
"For access to the decentralized web, people will only need a seed. This will be a single asset which enables the interaction with dApps and other services. Individuals will still use a web browser to access the internet, and visually it will be Web 2.0 user-friendly."
But at present the decentralized apps, wallets, platforms, and other digital assets that make up Web 3.0 are scattered. And accessing these interfaces calls for separate seeds, logins, and identities — much like the existing Web 2.0. So the author, the founder of Essentia.one, offers to be the provider of the single seed.
The irony is, while having a single key to access all things internet is great for the user, we are back to the original issue of monopoly. If there is only one provider providing these seeds, then all power will be concentrated on the one providing the seeds.
Wouldn't we be just replacing the current behemoths with just another version?
Came across this interesting article today and am guilty of quite a few of them. The first 7 relate to office productivity and the rest is more on the personal level. In summary, here's the 12 poor decisions you could be making on a day to day basis :
Even as some companies are still reeling from the adoption of FRS 115, the next big standard to affect the accounting landscape is FRS 116. This will be a major accounting standard to adopt for lessees.
In a nutshell with this new standard, there is no more distinction between operating and finance lease accounting for lessees. What this means is that leased assets and liabilities that were off balance sheet under FRS 17 (the previous standard) will now have to be recognised.
Needless to say, the impact on the financial statements as a result of this change could be potentially huge, especially if the company has lots of operating leases.
Impact on Statement of Financial Position
The company’s assets and liabilities will increase and this would affect ratios like current ratio and gearing ratio negatively.
In all likelihood, the current ratio will decrease as the lease liability recognise would affect both current and non-current liabilities but the lease asset recognised will only affect the non-current asset section.
Gearing ratio would also increase as financial liabilities is increased and equity is decreased due to increased expenses recognised (depreciation and lease interest).
Companies relying on these ratios to determine or maintain debt covenants would do well to pre-empt these changes and negotiate with their bankers now to avoid breaching their debt covenants.
Impact on Income Statement
As mentioned above, ceteris paribus, a company’s overall profits would decrease upon adoption of FRS 116. This is due to increase in depreciation and interest expense, which would likely outweigh the effect of the absence of the now disallowed rental expense.
An interesting consequence, however, is that EBIT and EBITDA would increase as the additional depreciation expense should be lesser than the disallowed rental expense.
Companies that use these ratios for staff incentive programs would need to take note of these impact and revise their KPIs accordingly. Similarly, companies who report these ratios to their investors should also inform them of these impacts and decide if their current benchmark needs to be revised.
Impact on Cash Flow Statement
The impact on operating cash flow would be positive as the rental expense amount is no longer in this section and the newly included interest payment would be much smaller in comparison. This is because the bulk of the cash outflow is now the principal payment and that would belongs to the financing section.
Companies may wish to educate their investors that the increase in operating cash flows does not really indicate any vast improvement in the business as the net cash flow is unaffected.
Even though the effective date for this Standard is 1 January 2019, companies that have heavy operating lease commitments should start assessing the impact now rather than in 2019., In particular, companies in the co-working and service office industry like WeWork and Regus could be very much affected by this standard, especially if they don't own the properties they operate in.
For companies with debt covenants tied to gearing ratios, they should start negotiating with their financial institutions to avoid situations where those covenants would be breached.
Companies who are using the affected ratios for benchmarking should also assess the impact of these changes and make their own revisions accordingly.
If you need assistance in assessing the impact of adopting this Standard on your Company, we can help!
Contact us today!
So says Ravi Menon, M.D of MAS on cryptocurrencies becoming mainstream in the future.
“Perhaps, (it could happen) if an algorithm can mimic the reaction function of a central bank and preserve the value of the cryptotokens better than central banks can do with respect to fiat (legal tender) currencies.”
Sounds like he has just pointed the way forward with that quote.