9/1/2023, 01:08 ‘What are the Directors Duties in Relation To Financial Reporting? Secretarial mnting Tax Immigration Othe rw . Resources Resources What Are the Director's Duties in Relation To Financial Reporting? 30 Inthe world of finance and business, quality financial reportingis the holy gal It plays avital role in understanding a company's financial standing or integrity. Moreover, with the increasing globalisation ofthe world businesses are able to transact and collaborate with partners and clients from anywhere inthe word ‘Asarresult, many more people are interested inthe nancial reports of businesses, Long gone are the days when companies were only answerable to ers, executives and ‘their immectate shareholces and government accounting bois. In today's world, investors potential investors, cu directors, and the general public constantly demang to see financial reports of businesses tomake informed financial decisions For this reason, Singapore's Accounting and Corporate Regulatory Authority (ACRA) mandates that all incorporated companies prepare and make avalable financial renors ona timely basis, Therefore, among many other responsibilties, acompanysdrectorIsdirectly responsible forthe company’s honest timely, and detailed financial reports, ‘Azajor shortfall with several financial reportngin the past was that acked the necessary transparency that stakeholders needed to trust the report. To solve this major isue, ACRA created the Financial Reporting Survellance Programme. The programme was designed to.ensurea level playing ground and institute nancial reporting standards that mast be adhered to by companies incorporated in Singapore. Table of Contents = 4 Why are Directors Responsible for Financial Reporting? hntps:timeol.com,sgiwhat-ae-the-drectors-duties-n-elation-o-nancla-reporting! 189/1/2023, 01:08 the Director's Duties in Relation To Financial Reporting? arial —— Resources '3.Conelsion 44 About Timcole Why are Directors Responsible for Financial Reporting? Directors are the governing authority of any business a: company, They ae directly responsible forthe quality of nancial reports. Itisone ofthe director's duties to ensure theres francial transparency and integrity inthe company. Mareso, they are mandated by law t oversee the process and ensure financial ecords received aren ine with or correspond tothe true financial standing ofthe company Thiss because ciectors may not bein charg of preparing thse franc sttemenis but ae responsible or aproving and accepling the prepared franca recorés, Therefore they wilbear the brunt of ary mistakes or falsis inthe report. Director’s Duties in Relation To Financial Reporting Company directors may have other functions an roles but play a crucial part in fnancaleporting. Going by the laws and regulations of ACRA these arethe expected duties of a company's director. Ensure Proper Documentation of Financial Records Preparing account records or reviewing dally ransactons i not one ofthe directors duties. However, the director must ensue the processes and tools for proper documentation ae provided and really avallable. nother words the company’s internal contol systems must be superb Singapore's Corporate Act clearly states that allincorporated companies must keep financial records tointeror easly tis the cuty ofthe director to ensure this Acts strictly enforced and adheredto, the company's financial position Review Prepared Financial Reports “The companys director must critically examine nancial reports before making them availble to sharcholders and the public. They are also responsible for fling the company's nanclalreport with ACRA. This done to ensure errors and mistakes ae corrected before making the Information avalable Have Basic Financial Literacy Directors are not always nancial experts, and there's no mandatory requirement fr them tobe. However, they must have fundamental financial Iteracy that wll enable them to read and understand prepared financial reports, In addition oth requirement. directors are alsa expected tobe fully updated about all of ACRAS financial principles and standards, les common to have directors with ow financial iteracy opt for personal traning to acquire the needed skis and expertise Alternatively directors can ee expert assistance tohelp look through the prepared fnanclal reports Appointment of Competent Senior Management ‘Anexcellent way t ensure financial reports ae prepared properly isto hire or appsint competent hands t the senior management level. Although having basic nancial iteracy is necessary the director would take much pressure ofthe shoulders knowing financial professionals have prepared thereponts, ‘With regardto finance reports, the two key senior management staf to appoint ae the Chief Financial Officer (CFO) and the Chief Executive ier (CEO), Both staff would need to possess an unrvalledlevel of integrity, competence, and experience to undertake therole, In addition to the appointments of senior management staff, the director i responsible for employing the company's secretary. The secretary may not be directly involved in preparing financial report but can help coordinatenecessary meetings and make reminders for hnancal documentation. ‘The irector's duties include employing a company secretary with the right qualifications and experience Inline with ACRA'S laws, a company secretary must be appointed within six months after its incorporation, andthe psition must also not remain va +r more than six months, hntps:timeole.com,sgiwhat-ae-the-drectors-duties-n-elation-o-nancla-reporting! 2189/1/2023, 01:08 the Director's Duties in Relation To Financial Reporting? arial rw there's need for it So the director must ensure senior management cooperates with the auditors. “The rectors responsible for resolving any issues that may arise during or atthe end ofthe auit process. In adction, the director must act asa unifier to ensure all participants independent auditors, senior management, and the director reports Conclusion “The duties of company directors go beyond generally running the affairs ofa company. They are obligated to oversee financial reporting to ensure ye toan agreement on te details ofthe financial ‘they are prepared under ACRAS standards. They are also responsible for theintegrty ofthe financial reports. To provide a certain evel of ‘transparency and competence, directors need to appoint senior management staf with excellent character quality and experience in preparing financial statements, n dition, they would ned to work with external auditor an give them direct access to communicate with management and aise an unbiased opinion about the company’s financial standing About Timcole “Timeole sone othe leading company incorporation and accounting frm basen Singapore, Our wide range of professional services serves asa op solution for your business, offering you the most affordable price for services conducted withthe highest evel of excellence. Ccontactusta find out mere on how We can help you with your company today, 4 Check our promotional packages, covering all aspects of your business needs: + Company Incoreration Packages ‘+ Company Secretarial Services + Comaany Accounting & Taxation Packages Contact us fr a free consultation today to choose or customize the most suitable plan for your business ‘7. Common Bookkeeping Mistakes That Can Put Company Director Convicted of Tax Evasion, Your Business At Risk Money Laundering and Cheating Offences Related Posts \What Should! Do fmLateln Filing My Corporate Quick Guide on Annual Returnsin Singapore Taxes? February 35,2022 (What is a Register of Nominee Directors? 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