Mr S Iswaran at the Federation of ASEAN Accounting Firms (ASNAF) Conference 2006

SPEECH BY MR S ISWARAN,MINISTER OF STATE FOR TRADE AND INDUSTRY, AT THE FEDERATION OF ASEAN ACCOUNTING FIRMS (ASNAF) CONFERENCE 2006, 10 NOVEMBER 2006, 9.00 AM AT THE FULLERTON HOTEL

Mr Rohan Kamis, Chairman of the ASNAF,

Distinguished guests,

Ladies and gentlemen,

I am pleased to be here today at the ASNAF Conference 2006. I want to extend a warm welcome to the members and associates of the ASNAF to Singapore. We are glad to host the ASNAF’s annual conference this year.

Economic Outlook for the Region

The Asian Development Bank has forecasted that the economies of emerging East Asia, which comprises the 10 ASEAN countries, the People’s Republic of China, Hong Kong, Taiwan and the Republic of Korea, will collectively grow by 7.5% in 2006. This is fuelled by a sustained, broad-based economic expansion in major industrial countries that are key export markets for the region, as well as a rebound in the global information technology industry. In 2007, the East Asian economies are projected to grow 6.9% collectively, due to an anticipated easing of growth in the US, Japan, and China.

But overall outlook for the region is still positive and this is expected to create a good environment for businesses to thrive. Small- and medium-sized companies that are able to band together and leverage on each other’s strengths will be in a particularly good position to ride on this growth. This is why I am heartened to know of groupings such as the ASNAF.

The ASNAF is an alliance of mid-sized full service public accounting firms across the ASEAN region and throughout Asia, including Australia and New Zealand. The ASNAF was formed in 2002 as a result of a few visionary mid-sized accounting firms’ desire to service their clients better especially in their regional and international expansion. From five founding members in Brunei, Indonesia, Malaysia, Philippines and Singapore, the ASNAF has today expanded into an international network of more than 400 offices in over 70 countries throughout the world covering Europe, North and Latin America, Middle East, Asia, Africa, Australia and New Zealand taking into account its associates.

The ASNAF also has strategic alliances with international accounting groups such as Integra International and Fidunion International. Together, the ASNAF forms a strong regional and international network to provide accounting, advisory and assurance services to companies ranging from small to medium enterprises to the large multi-national companies.

I am glad that you have chosen the theme “Moving Ahead Together” for this conference. This theme cannot be more appropriate given your background and today’s environment where change is the only constant. A forward-looking attitude coupled with the willingness to collaborate and progress is key to survival.

The Importance of Integrity to the Accountancy Profession

The past few years have been tough for accountants all over the world, as the public’s and investors’ faith in the accountants’ role as gatekeepers has been shaken by scandals involving companies such as Enron. This is a perception that must be corrected.

In today’s world, financial markets are like inter-connected networks. Capital can flow at the touch of a button. Although our operating environment has become more complex and fast-changing, certain basic principles still apply. Disclosure of reliable, accurate and timely information is a fundamental market requirement. To reduce market volatility and increase investor confidence, countries must continue their efforts to improve disclosure, corporate governance and transparency

As auditors of financial statements, accountants are important gatekeepers who help ensure that standards and best practices are carried out by management in substance, and not simply in form. I am therefore heartened that ASNAF is committed to promote standardised accounting practice and services so as to enhance professionalism in regional accounting services.

To align Singapore’s corporate governance and disclosure practices with international standards, the Singapore Government has introduced a number of changes over the last few years. The most significant change is that since Jan 2003, companies in Singapore have been required to comply with Singapore Financial Reporting Standards (FRS). These FRS are modelled closely after the International Financial Reporting Standards (IFRS) and the International Accounting Standards (IAS). They are frequently revised to keep abreast of the changes in the IFRS.

The Code of Corporate Governance was published in 2001 by the Singapore Government. It sets out the principles and best practices in 4 main areas of governance, namely: board matters, remuneration, accountability and audit, and communications with shareholders.Listed companies are required to describe their corporate governance practices in their annual reports, as well as disclose and explain areas where they deviate from the Code. As part of the efforts to regularly update the Code to keep up with international developments in improving corporate governance practices, the Code was revised in 2005 to clarify the responsibility of Audit Committees in ensuring the integrity of companies’ financial statements, internal controls and internal audit functions.

In your pursuit to enhance accounting standards, I welcome ASNAF to collaborate with agencies such as the Institute of Certified Public Accountants of Singapore and the Council of Corporate Disclosure and Governance, and tap on the synergies of their initiatives. I hope that Singapore can also play a part in your development plans and move ahead together with ASNAF.

Conclusion

In conclusion, I would like to commend the founding members for taking the initiative to set up ASNAF.I note that ASNAF is the very first ASEAN-based regional grouping of mid-size full service accounting firms.

I understand that the ASEAN Secretariat has invited ASNAF to join as an affiliated non-governmental organisation. I would be most pleased to see ASNAF accept the Secretariat’s invitation and take on a bigger role in promoting higher standards of accounting in the region.

I wish you much success and growth in the coming years. Thank you.