BDO Spotlight

Managing Partner's Message

In this edition, we explore pivotal developments shaping the business landscape in Singapore and beyond. From the intricacies of auditing group financial statements to the growing importance of sustainability assurance, we delve into how evolving standards and regulations impact industries. We also examine the transformative role of generative artificial intelligence in driving business innovation and highlight key takeaways from Singapore's 2024 Budget, which offers new measures to support businesses while addressing ongoing challenges. 

Audit of Group Financial Statements

The revised Singapore Standard on Auditing (SSA) 600 introduces key updates for auditing group financial statements, effective December 2023. It emphasises a proactive, risk-based approach, focusing on identifying and addressing risks of material misstatement, with an expanded role for component auditors. The revised standard broadens the definition of "component" to include business units and functions, enhancing the scope of group audits. It also stresses robust two-way communication between group and component auditors. It introduces more stringent documentation and professional scepticism requirements, which could increase audit complexity and costs for groups with decentralised systems.

Sustainability

Sustainability assurance is becoming increasingly critical for businesses as global standards evolve, particularly in Singapore. It involves an independent evaluation of a company's sustainability practices to ensure accuracy and compliance with ESG standards. With rising investor expectations and regulatory requirements, including mandatory climate-related disclosures, sustainability assurance is essential for maintaining credibility. However, challenges remain, such as evolving standards like ISSA 5000 and skill gaps within the auditing profession. As Singapore advances in sustainability, staying updated on these developments is crucial for businesses to align with global best practices and effectively manage sustainability risks. This issue of BDO Spotlight includes the latest updates on sustainability reporting requirements in Singapore.

Gen AI

Generative Artificial Intelligence (GenAI) is revolutionising marketing, sales, and customer service, enabling businesses to streamline operations, enhance efficiency and personalise customer experiences. Key steps for successful GenAI integration include assessing current capabilities, defining clear objectives, starting small with scalable projects, ensuring data readiness, selecting suitable tools, and fostering internal competence. Ethical considerations, regulatory compliance, and change management are also critical. By embracing GenAI, businesses can stay competitive, drive growth, and navigate evolving market and regulatory landscapes.

Singapore Budget: Dollars and Cents on Singapore Businesses

Singapore's 2024 Budget introduced key measures to support businesses, including a Corporate Income Tax rebate, enhanced tax deductions for renovations, and a global minimum effective tax rate of 15% for large multinational enterprises under BEPS Pillar Two. Budget 2024 also targets workforce development, offering mid-career Singaporeans SkillsFuture Credit top-ups and training allowances. Additional highlights include personal income tax relief, changes in Central Provident Fund (CPF) contribution rates for senior workers, and expanded Annual Value bands for residential property. Despite projected GDP growth of 2-3% in 2024, businesses still face challenges like rising human resources costs, tighter workforce policies, and talent shortages. As global risks like trade disruptions and inflation loom, we welcome your feedback on the 2024 Budget's impact and invite suggestions for the 2025 Budget to enhance business support.

With expert insights on these pressing topics, I hope your business remains agile and forward-thinking in an ever-changing environment. Happy reading!