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By Theresa Tan
IN a move to ensure more transparency and accountability, the Accounting Standards Council (ASC) is proposing that all charities comply with one set of its new accounting standards, regardless of their size or status.
Mr Low Puk Yeong, Commissioner of Charities, who is also chairman of the ASC committee for charities, said the draft proposals have taken into account feedback given by the charity sector, auditors and public donors.
"These draft proposals reflect our aspirations to promote greater transparency and accountability of the charity sector by improving the standards of financial accounting and reporting, while at the same time also ease the burden on smaller charities and Institutions of a Public Character ((IPCs)," he said.
Concurring, Mr Gerard Ee, chairman of the National Kidney Foundation (NKF) and a member of the ASC charities committee, said the new accounting standards will make life easier for smaller charities, as they are consolidated into one easy-to-follow document.
The Council was set up in November last year to prescribe accounting standards for companies, charities, co-operatives and societies.
The Council's proposed standards for charities include:
- Using a charity's expenditure, on top of its income, to determine its size.
Currently, charities are classified as large and non-large charities based on their annual income. Charities with an annual income of $10 million or more are considered large.
Besides income, the Council is proposing that a charity's expenditure should be considered as well, as it gives a better gauge of how a charity spends its money.
- Small charities with annual income or expenditure of less than $500,000 do not have to hire external auditors to audit their accounts. Currently, only charities with annual income or expenditure of above $250,000 have to hire external auditors.
This proposed change follows the standard under Societies Act and also makes it less onerous for small charities to do their work. All they have to do is to get their accounts examined by independent qualified accountants who are either members of the Institute of Certified Public Accountants of Singapore (ICPAS) or any other bodies approved by the ICPAS.
- All charities have to disclose additional key information in their annual reports. Such information include how charities spend their money, details of its investment policies for example.
The Council is seeking public feedback on its proposals. The public can give their views through the following channels: the The Charity portal, the Reach portal and the council's website.
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