The consolidation as at 20 December 2023
This 225-page Singapore Statutes Online PDF records the Accountants (Prescribed Standards and Code of Professional Conduct and Ethics) Order 2023 as at 20 December 2023. The Order began on 1 July 2023; this version incorporates S 741/2023 effective 15 December 2023. It retains the professional and quality-standard schedules and broad ethics requirements, while adding detailed group-audit independence rules and revising team definitions. It is a dated consolidation, not a statement that later amendments are absent.
Auditing and quality standards in the schedules
The First Schedule lists Singapore Standards on Auditing, from the overall objectives and engagement terms through risk, evidence, reporting and special-purpose work. The Second Schedule permits the specified International Standards on Auditing in the circumstances set out by the Order, including Singapore entities listed overseas and foreign entities quoted or listed in Singapore. The Third Schedule identifies SSQC 1 and SSQM 1 and 2. Permission to use an international standard is contextual; it is not a general choice to replace the Singapore standards for every client.
Reading the ethics code
The Fourth Schedule applies to public accountants and accounting entities providing public accountancy services. The code comprises fundamental principles and a conceptual framework, requirements for public practice, independence for audit and review, and independence for other assurance engagements. Part 2 is intentionally blank. Paragraphs beginning R state requirements; A material explains their application, and SG provisions add Singapore requirements. In this code, may denotes permission, while might denotes possibility. Read the relevant general framework alongside the specific service or relationship rule.
Integrity, objectivity and competent work
The five principles are integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. Integrity requires straightforward and honest conduct and avoidance of materially false or misleading information, including misleading omissions. Objectivity must survive bias, conflicts, undue influence and undue reliance on technology. Competence requires current knowledge, appropriate training, diligent work and supervision, together with explanation of inherent service limitations where appropriate. Professional behaviour includes compliance with law, the public-interest responsibility and honest marketing that does not make exaggerated claims or disparaging comparisons.
Confidential information and permitted disclosure
Confidentiality covers information obtained from prospective clients, within the firm and after the professional relationship ends. Information must not be used for personal or third-party advantage. Disclosure can be required by law, permitted by law with client authority, or justified by a professional duty or right where law does not prohibit it, such as responding to a regulator or protecting professional interests. Before disclosure, consider the facts, recipients, affected interests and whether information is complete and substantiated. The NOCLAR provisions provide a specific public-interest pathway rather than a general permission to share client data.
Identify, evaluate and address threats
The framework identifies self-interest, self-review, advocacy, familiarity and intimidation threats. An inquiring mind, professional judgment and the reasonable and informed third-party test are required; consider the combined effect of circumstances and services. If a threat is not at an acceptable level, eliminate its cause, apply effective safeguards, or decline or end the activity. Reassess when facts change. A policy or procedure is not automatically a safeguard: it must effectively reduce the identified threat. Awareness of cognitive bias and a culture that supports challenge and reporting reinforce this process.
Conflicts of interest and confidentiality barriers
Identify conflicts before accepting work and monitor them throughout the relationship, including relevant network interests. Explain the nature of material conflicts and obtain appropriate client consent; where necessary consent is refused, decline or end the service or remove the conflict. Separate teams, confidentiality undertakings and independent review can help. In the exceptional case where confidentiality prevents disclosure or consent, continuation requires that the firm not advocate one client against another, effective information barriers, and a reasonable third-party conclusion that withdrawal would cause disproportionate harm. Document that exception and the reasoning.
Appointments, predecessor communication and second opinions
Acceptance requires consideration of client integrity, resources, competence, time and expert work. A proposed audit accountant must communicate with the existing or predecessor accountant. Client permission should normally be obtained in writing; refusal and alternative sources of relevant facts must be evaluated. Singapore provisions require written communication and reasonable time to respond; a final registered-post enquiry is relevant before assuming silence means no professional reasons against acceptance. Periodically reassess recurring engagements. A second opinion must explain its factual limitations; refusing permission to contact the existing accountant requires a decision about whether the opinion can responsibly be given.
Reviewers, fees and referral arrangements
An engagement quality reviewer needs competence, authority and objectivity. SSQM 2 requires a two-year cooling-off period before a former engagement partner becomes its quality reviewer; this differs from the PIE rotation rules. A low fee is not inherently unethical, but inadequate resources can threaten competence. Assess contingent fees, referral payments and commissions under the relevant framework and disclose or agree arrangements with the client where appropriate. Payments to a former owner or heirs when buying a firm are not treated as ordinary referral commissions.
Inducements and custody of client assets
Illegal inducements are prohibited. Even a lawful or trivial gift must not be offered or accepted where the accountant concludes, or a reasonable third party would conclude, that the intention is improper influence. Without improper intent, evaluate timing, frequency, cumulative value, transparency and other circumstances. Family conduct can also create threats. Custody of client money or assets requires legal permission and applicable conditions: establish the source, consider anti-money-laundering duties, segregate assets, use them only for their intended purpose and remain ready to account for assets and income.
NOCLAR: understanding and escalating suspected wrongdoing
Section 360 addresses actual or suspected non-compliance with laws affecting financial statements directly or fundamentally affecting the business. Clearly inconsequential matters, purely personal misconduct and unrelated third-party issues have distinct scope limits. Comply with reporting law and restrictions such as tipping-off prohibitions. Understand the matter and raise it with the appropriate management level; where management is implicated, communicate with governance. Seek rectification, remediation, prevention and any required disclosure. In group audits, communicate relevant matters to the group partner and affected components, subject to legal limits.
NOCLAR: further action and documentation
Assess management’s response and whether further action is needed in the public interest. Withdrawal does not replace other necessary action. An appropriate disclosure to an authority can be justified under the code after evaluating seriousness, evidence, likely harm, protection and the authority’s ability to act; imminent substantial harm can require urgent consideration. Audit work requires documentation of judgments and action; documentation for other services is encouraged. On withdrawal, the predecessor supplies relevant NOCLAR facts to the proposed accountant even without client permission, unless law prevents this. Non-audit personnel serving the firm’s audit client must communicate through the appropriate audit partner.
Audit independence and the prohibition on management
Part 4A covers audit and review, independence of mind and appearance, and both the engagement period and financial-statement period. Firms and network firms must not assume audit-client management responsibilities. Client management must make decisions, oversee services and accept responsibility for results. For listed clients, the client includes all related entities; for other clients, controlled entities are included, with other known relevant relationships considered. Before appointment, assess previous relationships and non-audit work. A PIE’s prohibited prior service must cease before the engagement, with threats appropriately addressed.
Who belongs to an engagement or group audit team
Individuals performing audit procedures can be engagement-team members even when supplied by a network firm, an outside component auditor or another service provider. Accounting or auditing specialists performing procedures are included; external experts and internal auditors providing direct assistance are excluded. Technical advisers and engagement quality reviewers can be audit-team members without being engagement-team members. The group audit team includes relevant component personnel and others directly influencing the group audit. This determines whose interests, family relationships, employment and rotation need assessment.
Group and component communication under Section 405
The group partner confirms that component auditors understand and comply with the applicable ethical requirements. Communicate the group’s PIE status, relevant entities and components, independence period and whether a component partner is a group key audit partner. Ask components to report significant independence judgments, conclusions and reasons. A component’s separate statutory audit may have different requirements from its work for the group. NOCLAR communication also covers statutory audits of legal entities or business units, and the group partner must arrange relevant communication even across different firms or networks.
Independence for component firms outside the network
Outside-network component personnel must be independent of their component client, the entity whose group statements are audited, and relevant entities controlling the component within that entity’s control chain. Other relevant relationships must be notified to the component firm for assessment. The component firm is independent of its component client, applies specified investment and loan rules to the group reporting entity, and evaluates other known group or network threats. The group firm and its own network remain independent of the group client. Independence periods refer to the group statements and group report rather than only a local component reporting date.
PIE groups, non-assurance services and key partners
Where the group is a PIE, an outside-network component firm applies the PIE non-assurance restrictions to its component client, even if that component is not itself a PIE. Evaluate self-review against the financial information actually audited, such as inventory in a limited assignment. An otherwise permitted service has a specific exception from communicating with, or obtaining concurrence from, the group’s governance under R600.21–R600.24. The group partner identifies and informs component key audit partners; compensation restrictions apply to all groups, and PIE groups add employment and seven-year rotation requirements. New components, new component firms and a group becoming a PIE require reassessment of existing relationships and services.
A component independence breach and use of its work
The component firm must eliminate or suspend the cause, assess significance and remedies, and promptly notify the group partner in writing. The group partner assesses whether the work remains usable under a reasonable third-party test. Unremedied breaches prevent use; alternatives include group-performed work or another component firm. Outside-network breaches require prompt governance discussion about the breach and remedy or alternative evidence, written communication and concurrence. If governance does not concur that consequences are satisfactorily addressed, the group firm cannot use that component’s work. These requirements are additional to the applicable network-breach rules.
Networks, mergers and independence breaches
A network is a cooperative structure sharing such features as profits or costs, ownership, control, management, quality policies, strategy, branding or significant resources. Referral links or immaterial shared training alone are not automatically a network. A merger-created prohibited relationship normally ends by the transaction’s effective date. Where that is not reasonably possible, the conditional transition is no more than six months, with affected personnel excluded, safeguards and governance communication. For an independence breach, eliminate the cause, assess consequences, communicate and document; continuation requires satisfactory remedies and governance concurrence, otherwise end the audit subject to law.
Audit fees, overdue fees and contingent fees
An audit fee must not be influenced by non-audit work, except relevant actual cost savings. Direct or indirect contingent audit fees are prohibited; a court or public authority’s fee is not contingent. Certain non-assurance contingent fees are also prohibited, including material firm fees, significant network fees relating to a material audit matter, and fees dependent on material audit judgments. Overdue fees are normally collected before the report; a significant long-outstanding balance requires a loan assessment and a decision on continuation. Key audit partners must not be evaluated or paid for selling non-assurance services to their audit client, although normal profit sharing is allowed.
Fee dependency: the separate 30% and 15% tests
For a non-PIE audit client providing more than 30% of firm fees in each of five consecutive years, determine whether an external review of the fifth-year audit, before or after issuance but before the sixth-year report, provides an effective safeguard, and apply it if so. Continuing dependency requires annual reassessment. For a PIE exceeding 15% in each of two consecutive years, assess and apply an effective external pre-issuance review for the second year. If this continues for five years, cease after the fifth-year opinion. An exceptional public-interest continuation requires regulator or professional-body concurrence and external pre-issuance review in the sixth and every subsequent year.
Fee communication, public disclosure and Singapore’s 50% rule
Communicate PIE audit and other fees, relevant controlled-entity fees, dependency and safeguards to governance, subject to specified consolidated-parent exceptions. If law does not require public disclosure, discuss its benefits with the client; if the client does not disclose, the firm must disclose the prescribed fees and two-year dependency information, subject to the code’s exceptions. Singapore-listed clients have an additional requirement when non-audit fees, excluding audit-related services, paid to the firm and network reach at least 50% of audit fees: disclose the fact and discuss safeguards with governance. The glossary limits certain Singapore provisions for engagements on single accounts or financial-statement items.
Investments, loans and business relationships
Direct interests of any amount and material indirect interests are prohibited for the firm, network, audit team and specified family and other partners. An intermediary investment is direct if the beneficiary controls or influences its decisions. Limited employment-benefit and trustee exceptions have cumulative conditions; unintentionally acquired interests require disposal. Loans made to a client must be immaterial to both parties. Borrowing from a bank client requires normal terms, while non-bank borrowing must be immaterial to both; deposits require normal commercial terms. A close business relationship requires both an immaterial financial interest and an insignificant relationship. Ordinary arm’s-length purchases still need assessment if unusually large.
Family, former employment and client appointments
A team member cannot participate where immediate family is a client director, officer or an employee significantly influencing accounting records or statements during the relevant periods. Other family and personal relationships require assessment, and specified close relationships require firm consultation. Recent service in a relevant client role during the statement period prohibits team membership. Firm or network personnel cannot be directors or officers; company-secretary work is exceptional only where locally permitted, management makes all decisions and duties are routine administration. Employment negotiations require notification and appropriate removal or review. Former personnel joining the client must not retain prohibited significant links with the firm.
PIE employment restrictions and partner rotation
A former key audit partner joining a PIE in a specified senior role requires an audited period of at least 12 months after ceasing that partner role, without participating in that audit; a former senior or managing partner has a 12-month restriction, with a narrowly conditioned merger exception. A PIE key audit partner normally serves no more than seven cumulative years across key roles, counting prior firms. Cooling-off is five years for an engagement partner, three for an engagement quality reviewer and two for another key partner. Mixed roles have specified four-year and three-year tests. A new PIE and an unforeseen one-year extension have distinct conditions; cooling-off excludes audit, quality review, influence and specified intensive client roles.
Non-assurance services: assess before accepting
Section 600 applies to all non-assurance services, including services not specifically listed, and evaluates their combined effects. Management responsibilities remain prohibited. For a PIE, a service that might create self-review is prohibited: determine whether its results affect accounting records, controls or statements and whether the audit would evaluate or rely on the firm’s own work. Materiality does not override an express ban. Audit-related advice can fall within a defined exception where management remains responsible and other threats are addressed. Where no effective safeguards exist, change scope, decline or end the service, or end the audit.
PIE governance concurrence and related-entity exceptions
Before a firm or network accepts non-assurance work for a PIE, its controlling parent or controlled subsidiaries, governance must receive the required assessment and concur under the agreed process. Confidentiality restrictions permit only a conditioned alternative communication route; if no lawful route or agreed process is available, decline the service or end the audit. A client becoming a PIE requires cessation of newly prohibited work before, or as soon as possible after, the change with governance-agreed safeguards. Certain parent, significant-investor and sister entities have a narrow exception only if not themselves audited by the firm, no management responsibility touches the audited entity, no self-review arises and other threats are addressed.
Accounting, bookkeeping, administration and valuations
For non-PIE audit clients, accounting and bookkeeping must be routine or mechanical, with client judgments and appropriate safeguards. PIE bookkeeping is prohibited, except the tightly defined preparation of certain related-entity statutory statements after the group report using approved data and not underlying records or future group statements. Routine administrative work with little judgment normally creates no threat if management is not assumed. A valuation for a non-PIE is prohibited if it combines significant subjectivity with material financial-statement impact; for a PIE, any potential self-review is prohibited. Tax-only effects are instead considered under the tax valuation subsection.
Tax returns, calculations, advice and tax avoidance
Historical tax-return preparation does not usually create a threat, but current and deferred tax calculations supporting accounting entries create self-review and are prohibited for PIE audit clients. Tax planning supported by authority, precedent, established practice or a likely-to-prevail legal basis can avoid self-review, subject to other threats. Advice is prohibited if its effectiveness depends on an accounting treatment the audit team doubts. A firm must not promote a treatment initially recommended by itself or its network with a significant tax-avoidance purpose unless confident that its legal basis is likely to prevail. PIE tax advice or planning that might create self-review is prohibited.
Tax valuations and disputes
If a tax valuation also revalues assets or affects statements beyond tax entries, apply the general valuation rules. Legally fixed or widely accepted assumptions, or prescribed or accepted methods with external authority review, can avoid self-review. Otherwise assess subjectivity, evidence and materiality; PIE potential self-review remains prohibited. In tax disputes, consider the firm’s earlier advice, management’s role and public proceedings. Advocacy before a tribunal or court is prohibited for a non-PIE where amounts are material, and prohibited for a PIE regardless of materiality. Factual evidence, requested explanations and continuing analytical advice are distinguished from advocacy.
Internal audit and IT systems
Internal audit clients must appoint a competent responsible person, approve scope and frequency, evaluate findings, choose recommendations and manage implementation. The firm cannot set internal-audit strategy, direct staff, own controls or report as management. PIE internal-audit work potentially creating self-review is prohibited, including financial-reporting controls, accounting systems and statement amounts. For IT work, the client must decide, oversee, evaluate and operate the system. Systems unrelated to financial reporting or insignificantly customised third-party off-the-shelf software do not usually threaten independence; PIE designs affecting financial controls or records are prohibited where self-review might arise.
Litigation support and expert witnesses
Litigation support includes document work, investigations, witnesses and damage calculations. Valuation rules apply to estimates affecting statements, and PIE potential self-review is prohibited. A factual witness’s response within expertise is not automatically an advocacy threat. PIE expert-witness work is normally prohibited, except court appointment or a qualifying class action: audit clients must be less than 20% of members both in number and value, none leads the group, and none controls the service scope or terms. For non-PIEs, an expert independent of the current and former audit team can be a safeguard.
Legal services, recruiting and corporate finance
A firm or network employee cannot be an audit client’s general counsel. PIE legal advice potentially creating self-review is prohibited; court advocacy is prohibited for PIEs and for material non-PIE disputes. Recruiting cannot involve negotiating for the client, nor specified searches, reference checks, appointment recommendations or individual terms advice for directors, officers or senior accounting-influencing management. Corporate finance cannot promote, deal in, underwrite or advise investment in the client’s instruments. Advice dependent on doubtful accounting treatment is prohibited. Other corporate-finance services require threat assessment, with PIE potential self-review prohibited.
Restricted special-purpose audit reports
Section 800 permits only specified independence modifications when intended users understand the report’s purpose and limitations and expressly agree to the changes after communication. A representative may agree for a defined user class, with later users informed. These modifications cannot be used for a legally required audit; an unrestricted report for the same client still follows full Part 4A. PIE-only rules and certain related-entity or network requirements may be modified, but known threats remain assessable. The firm cannot hold a material direct or indirect interest. Non-assurance-service rules continue subject to the permitted modifications.
Other assurance engagements and client responsibility
Part 4B covers assurance on KPIs, compliance, value for money, internal controls, greenhouse-gas statements and specified financial-statement elements, rather than audit or review. The assurance client includes the responsible party and, in attestation work, the party responsible for subject-matter information. Other engaging or measuring parties still require conflict and threat assessment. Independence covers the engagement and information periods. Management responsibility related to the underlying subject matter or attestation information is prohibited: the client must appoint a suitably skilled decision-maker, oversee work and accept responsibility. Relevant network and related-entity threats must be addressed.
Prior services and breaches in other assurance
Prior non-assurance work requires assessment before acceptance. If impermissible work cannot practically end first, the code permits acceptance only with a short completion or transfer period, necessary safeguards and discussion with the engaging party or governance. Document significant independence judgments, safeguards and discussions. A breach requires ending or eliminating its cause and assessing objective ability to report. Discuss satisfactory remedial action promptly; if it cannot remedy the consequences or the relevant client party does not concur, end the engagement in accordance with law. Document the breach, decisions and any continuation rationale.
Other assurance fees, interests and relationships
Contingent assurance fees are prohibited, as are certain non-assurance fees dependent on material subject-matter judgments. Overdue and concentrated fees require assessment, but Part 4B does not simply import the audit 30% or 15% thresholds. Gifts must be trivial and inconsequential and never improperly intended. The firm, assurance team and immediate family cannot hold direct or material indirect client interests; trustee and accidental-acquisition rules apply. Loans, deposits, close businesses and family relationships have specific restrictions broadly parallel to audit, but use the assurance subject matter and its responsible parties rather than assuming every audit definition is interchangeable.
Other assurance personnel and non-assurance work
Personnel serving as client directors, officers or significantly influential employees during the covered period cannot join the team. Firm personnel cannot be directors or officers; a routine locally permitted secretary exception requires client decision-making. Former personnel joining a client must cease firm participation, and job negotiations must be notified. Long association requires threat evaluation and, where necessary, an appropriately long period outside the engagement and influence; the audit PIE seven-year rotation is not automatically applied here. Non-assurance work must be evaluated before acceptance, including combined effects and public-interest expectations; adjust scope, apply effective safeguards or end incompatible work.
Restricted-use assurance and key definitions
Section 990 allows only its specified modifications after intended users understand the purpose, subject matter and limitations and explicitly agree. Known interests of reviewers, advisers and others directly influencing the engagement remain assessable; the firm still cannot hold material direct or indirect interests. An unrestricted engagement for the same client follows full Part 4B. The glossary defines immediate family as spouse or equivalent and dependants, and close family as other parents, children or siblings. Audit and assurance teams extend beyond those doing fieldwork to relevant reviewers and influencers. Singapore PIEs include locally listed or issuing entities, Singapore-incorporated overseas-listed entities and financial institutions; large charities and IPCs follow listed-entity independence, except the Singapore 50% fee provision.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
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