Focus of new Acra rule is to help investors
New rule will improve quality and timeliness of financial information
More red tape? Some observers became anxious over last week's unveiling of new powers, which mean firms can be forced to restate, re-audit and re-file financial statements if they commit severe reporting breaches.
After all, sifting through all those numbers again is a gruelling process that some industry practitioners think may even lead to lawsuits.
But the new rule, under the Accounting and Corporate Regulatory Authority (Acra) that kicks in on April 1, is an important step, improving the quality and timeliness of financial information for retail investors.
Yes, failure to comply will see Acra hold company directors accountable - potentially resulting in fines or even criminal charges depending on the severity of the breaches - but the focus of this new approach is not deterrence and penalty.
Rather, it is to ensure investors get the most accurate and up-to-date financial information as soon as possible.
This is crucial as retail investors may not have the expertise to analyse complex financial reports, let alone reporting breaches.
The more information for investors to make informed decisions, the better.
Other new rules, such as a requirement starting this year for a more in-depth auditor's report to highlight areas with bigger risks of misstatement, will have similar benefits.
The enhancements to reporting and auditing standards also complement a string of new investor protection policies rolled out by regulators in recent times.
Last week, Parliament passed a law to bring changes to the Securities and Futures Act, including the tightening of accredited investor criteria so that uninformed investors face a smaller chance of being exposed to sophisticated and risky investment products.
As the Government continues to improve its regulatory regime, it bodes well not only for investors, but also for Singapore as a financial services hub, which relies very much on its strong reputation and transparency to stay competitive on the global stage.