Ministry of Finance of the Republic of Singapore
Ministry of Finance of the Republic of Singapore
05/10/2024 | Press release | Distributed by Public on 05/10/2024 05:40
Opening Speech by Ms Indranee Rajah, Minister in the Prime Minister's Office, Second Minister for Finance and National Development, at the AWRC Report Launch on 10 May 2024,[...]
Opening Speech by Ms Indranee Rajah, Minister in the Prime Minister's Office, Second Minister for Finance and National Development, at the AWRC Report Launch on 10 May 2024, 1440HRS at ISCA House
10 May 2024
Distinguished guests,
Ladies and Gentlemen.
Introduction
1. It is really nice to see such a wide gathering of people here today. We have got industry veterans, dedicated professors and students as well.
2. We are here today to launch the report by the Accountancy Workforce Review Committee or AWRC in short. This report, which makes various recommendations to strengthen the attractiveness of our accountancy sector, is the culmination of a year's worth of hard work and extensive deliberations by AWRC members.
Importance of accountants
3. Accountants have been around as long as there have been functioning economies. According to National Geographic, the first person in the recorded history of the world that we know was not a king or a warrior or a poet but an accountant! A 5,000-year-old clay tablet was found in Mesopotamia recording shipments of 29,086 measures of barley over 37 months and it was recorded by a person named Kushim. He was essentially the bookkeeper or an accountant. Thanks to his record keeping, not only did he keep track of his employer's business, but centuries later we have an idea of what commerce in ancient Mesopotamia was like. That is how important accountants are.
4. As we can see, through the ages and even more so now, accountants are critical for businesses. Accountants are responsible for key organisational functions, including ensuring a company's financial health and governance, the preparation of financial statements and the conduct of financial audits.
a. Accountants possess financial expertise and a keen eye for details, grounded by a strong sense of professionalism and ethics. You are our first line of defence against fraud and financial misdemeanours and are vital for the business ecosystem.
b. The role of the accountant is also evolving rapidly - from traditionally being viewed as a business supporter, to now being a business enabler and in some cases even the co-pilot. With technological advancements, most of the repetitive accountancy-related tasks can be automated, freeing up time for accountants to take on greater responsibilities and higher value-added tasks involving forecasting, advisory, and even playing a role to advance the sustainability agenda.
c. Among companies in the UK's Financial Times Stock Exchange (FTSE) 100 Index, one in three Chief Executive Officers (CEOs) previously served as Chief Financial Officers (CFOs). Beyond supporting strategic decisions with their financial insights, accountants are increasingly responsible for making key business decisions that contribute to the growth of their companies.
Shortage of accountants
5. Clearly, there is a strong demand for accountants and great opportunities for those who pursue the profession. However, in recent years, the accountancy profession has experienced challenges in recruitment.
a. Demand for accountancy and accountancy-related services is growing but firms are struggling to find enough accountants to meet these growing needs. Fewer students are studying accountancy in universities, and the proportion of accountancy graduates pursuing the profession is falling.
b. The situation is not unique to Singapore. Many countries like the UK and US, are also reporting a shortage of accountants.
6. Why is this so? And more importantly, how do we ensure that Singapore's accountancy sector continues to have a sustainable pipeline of high-quality accountancy talent? To answer these questions, MOF and ACRA established the AWRC, co-chaired by the former Singapore Accountancy Commission Chairman Mr Chaly Mah and 2nd Permanent Secretary for the Ministry of Finance Ms Lai Wei Lin, and comprising key industry players and members of academia.
Work of the AWRC
7. After a year of deliberation, the Committee has completed its work.
a. The AWRC held about 50 focus group discussions and engagement sessions, to understand the hopes and dreams, concerns and challenges faced by those in the accountancy sector.
b. This year-long journey involved engagement of multiple stakeholders in the accountancy sector, many of whom are with us here this afternoon. I would like to thank everyone who has contributed to this report - it would not be possible without your candid views, insights, and passion for shaping the future of the accountancy profession.
8. So, what did we learn over the past year? Why is there a shortage of accountants? It boils down to three main issues:
a. First, accountancy now has to compete with many other sectors that offer attractive jobs and higher starting salaries. Many students opt for careers in industries that they feel are more exciting, where they can fetch competitive salary packages for their skills and not have to endure long, gruelling hours.
b. Second, those who are looking to enhance their skills and qualifications through a professional accountancy qualification may find it a daunting endeavour due to the rigorous process involved in attaining such qualifications.
c. Third, insufficient recognition of accountancy qualifications, which could lead to missed opportunities for valuable professional development and building professional networks.
Recommendations of the AWRC
9. To address these issues, the AWRC has made three key recommendations.
10. First, to increase the appeal of accountancy as a profession by Ensuring Good Careers.
a. A key concern cited by young accountants is starting salary. Although an accountancy career offers attractive remuneration in the long term, feedback from young accountants is that during the early years of their careers, they earn relatively lower starting salaries than their peers in other sectors, yet they have to work long hours especially during the peak season.
b. The AWRC recommends that employers tackle this head on by improving their starting salaries and by redesigning their reward structures. At the end of the day, employees should feel appropriately compensated for the work they put in. Otherwise, the profession will not be able to attract enough young talent, despite good long-term salary and career prospects.
c. On this note, I am happy to announce that some of the major accounting firms have committed to reviewing their starting salaries. I am grateful for their recognition of the importance of this issue and understanding the need to take concrete steps to address it.
11. Beyond starting salaries, employers should provide a compelling career value proposition to accountants. This includes investing in talent development.
a. Many accounting firms offer international exposure opportunities. For example, Ms Carissa Tan here, is currently on a secondment to Deloitte New York as an assistant manager in audit and assurance. I am glad that she managed to join us today while she is back in Singapore! This opportunity has enabled her to learn new and diverse ideas from industry leaders and shaped her perspectives, both professionally and personally. Such enriching experiences would appeal to the younger generation who values broader exposure and mobility from the early stage of their careers.
12. AWRC's second key recommendation is to Create Quality Pathways, to improve access to a career in accountancy.
a. While it is not mandatory to have an accountancy degree to be an accountant, in order to become a full-fledged chartered accountant, individuals need to complete a professional qualification such as the Singapore Chartered Accountant Qualification (SCAQ). Aspiring accountants have told us that the pathway to becoming a professionally qualified accountant is challenging for those without a background in accountancy.
b. We recognise this concern. This is why we have been streamlining the programme structure of the SCAQ, to make it more accessible to different types of talent.
i. Last year, I announced that all polytechnic graduates, regardless of academic background, will be able to pursue the SCAQ. We have since also exempted all polytechnic graduates from the Principles of Financial Reporting module, if they had completed the equivalent module during their studies. This is in recognition of the quality of teaching in our polytechnics and will reduce the number of SCAQ exams that our polytechnic graduates have to sit for.
ii. We will do more. I am pleased to announce that from today, we will provide an additional exemption for the Taxation module for polytechnic graduates who have completed the equivalent module during their studies from the SCAQ Foundation Programme.
iii. With these exemptions, a polytechnic student who aspires to be a Chartered Accountant will have fewer Foundation Programme examinations to take and can become a Chartered Accountant about six months earlier.
iv. ACRA and ISCA are committed to reviewing the SCAQ curriculum and assessing against the curriculum offered by polytechnics and universities. If there are sufficient similarities, ACRA will be prepared to consider granting module exemptions for students who have completed the equivalent module during their studies.
c. We are also exploring new pathways for non-accountancy graduates to pursue an accountancy career. One example is the Accountancy Careers Launchpad that Ngee Ann Polytechnic intends to unveil later this year, to support non-accountancy graduates in building a foundation in accounting competencies. This launchpad, which includes a 3-to-4-month work exposure in accounting firms, will place them in good stead for opportunities in the accountancy sector.
13. Besides creating new pathways, we also recognise the need to enhance the existing pathways into the profession.
a. Many undergraduates already participate in internships during their university breaks, but these tend to be shorter in duration, typically ranging between 8 and 10 weeks.
b. We are working with the universities to enhance work-study opportunities to provide students with a richer learning experience, by more closely marrying what they learn in the classroom with practical industry experience. The longer work components in such opportunities could enable students to learn much more than they usually would in a shorter internship stint. Employers should also recognise the additional experience that such students bring, through accelerated career progression and higher starting salaries.
c. The work on this is already underway - earlier this year, NTU launched the Bachelor of Accountancy in Sustainability Management and Analytics. The new 4-year premier programme has been well-received by firms and students alike, with its unique features to develop future accountancy leaders, such as opportunities to work abroad and develop a strong grounding in emerging areas of sustainability and data analytics. To make this programme even more compelling, we have worked with NTU to provide a faster pathway for such graduates to become chartered accountants, by recognising their 30-week work component towards the SCAQ's 3-year practical experience requirement. I am heartened to hear that even though this programme was only introduced in January this year, the response has been very positive. And this new programme has helped to boost the overall application numbers for NTU's accountancy programmes by 10 per cent.
14. The third key recommendation is to Strengthen Professional Capabilities, and improve the recognition and value of the CA(Singapore) designation.
a. Through our focus group discussions, we have heard that some prospective accountants are less keen to pursue the SCAQ and to obtain a CA(Singapore) designation, as they perceive it to be only relevant for auditors. This deprives them of the professional development opportunities offered by ISCA.
b. The SCAQ's rigour in its curriculum and ISCA's emphasis on professional development are crucial to keep accountants up to date, to deal with increasingly complex accounting standards and business transactions. These skills form the cornerstone of the integrity of our financial markets.
c. In other words, the CA designation is a mark of quality. It is a signal to employers that the individual has undergone rigorous training and is proficient in core accounting skills and capabilities. Therefore, ACRA has been working with SGX RegCo on measures to emphasise to listed companies the need to employ accountants with professional qualifications from reputable accountancy bodies, such as the Singapore Chartered Accountancy qualification in their key finance functions. SGX RegCo is studying the issue in line with the AWRC's recommendation.
Conclusion
15. In conclusion, the AWRC's recommendations are to: Ensure Good Careers, Create Quality Pathways and Strengthen Professional Capabilities, to build a sustainable pipeline of high-quality accountancy talent.
a. What I have shared is just a preview of the AWRC's report. The report itself is much richer, detailing the key issues, recommendations, and stories of accountants whom we spoke to.
b. I encourage all of you to take some time to read the AWRC report and share it with your industry counterparts. The report paints a roadmap towards a vibrant and dynamic future for Singapore's accountancy profession, strengthening our position as a leading business hub.
c. I hope that you will all join us on this journey and work as one, so that we can bring these recommendations to life!
16. Once again, thank you all very much for making this report possible. I am excited about the future of the accountancy profession, and with these recommendations, I am confident that with your support, accountancy will continue to be a profession of choice.
17. Thank you.