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At some point, someone is going to write the great history book about what happened in 2020. From an accounting perspective, that book is going to start very soon, with the release of the audited results of companies with year-end 31 December 2020.
I say that for 3 reasons:
First, this is the first full-year audited results since the removal of quarterly reporting in early 2020. So there could be much more interest in these results than before. In particular, the removal of quarterly reporting was to enable companies to focus on the long term. So how companies achieved this and importantly, reflect this in their FY results will be of interest.
Second, this is also the first set of audited financial numbers that will reveal how severe an impact COVID-19 would have had on different businesses over the full year. We have already provided detailed guidance on how we want the COVID effect to be described and made clear to investors in the interim financial statements. We expect no less for the full-year audited results.
Finally, there is SGX RegCo’s announcement this morning of the new rules governing auditors and their work in respect of listed companies. One of the changes is the power to appoint a second auditor. When we consulted on this power, investors overwhelmingly supported it, because as they pointed out, the very possibility of a second auditor being appointed, in and by itself, can change behaviour for the better.
I should emphasize once again, that the appointment of a second auditor will only be in exceptional circumstances, after we have exhausted all other tools. But as the respondents who supported the proposal have pointed out, the very fact that we have it in our toolkit, can make a big difference in the behaviour of auditors in deciding whether to stand by the financial statements they have audited, and directors and shareholders in deciding whether to stick with their auditors.
Last year I spoke about the trust deficit globally when it comes to financial statements. In this regard, the respondents’ feedback to our public consultation is I think quite revealing. We need to win back their confidence together. And I look forward to working with all of you to do so. Thank you very much.
