Financial Statements, What's So Special About This?

What are these financial statements?

Some might argue these are just the same as management accounts, but “formatted nicely in Microsoft Word”.

I wouldn’t disagree agree actually. Because it really depends on WHO actually gets this done for your company. For the uninformed, this could very well be the case, just a beautifully formatted version of the management accounts.

Is there more to it?

Unfortunately (or fortunately) there is.

Financial statements exist for the purpose of disclosure and reporting. That means the information from the management accounts gets re-presented in the form of an annual report. Important things to note here is that there are rules governing the preparation of these financial statements, rules imposed by ACRA and the Companies Act. These rules require adherence to Singapore Financial Reporting Standards (SFRS), International Accounting Standards (IAS) and if these are audited, the Singapore Standards on Auditing (SSA).

Why so many rules and standards?

Because what you present in the financial statements are meant to make it comparable to ALL other companies, not just companies in your trade, but all companies in Singapore and across the globe. This enables any reader of the financial statements to understand them and because they all follow the same set of rules internationally, they become comparable and less susceptible to window-dressing or fraudulent misrepresentation. This becomes hugely relevant when you position the reader as a potential investor, a banker or the tax authorities.

Makes sense? Yup, we think so too.

Who gets this done?

Well, in case you haven’t checked the standards out, theres a whopping 400+ standards in the SFRS. And the Singapore Companies Act is easily a thousand A4 pages worth of reading. Never mind the jargon.

If you meet the requirements for preparing unaudited financial statements, get a professional firm of accountants to get this done for you. The accountants or partners in the firm should possess an international qualification like ACCA and be professional members of the Institute of Singapore Chartered Accountants (ISCA).

Since you have read our article on Director’s responsibilities, it is still your responsibility to get this done right so it really does make sense for you , as a director, to appoint a proper professional to get this done so you would have discharged your responsibility.

Talk to us

Get in touch with us today to find out how we can partner up with you to get this done in the most cost effective manner for you. You can also check out our plans here and also here before our video call.

Be rest assured our partners and senior staff are all ACCA-certified and possess ISCA recognition.