The order supports improvement but does not transfer responsibility
The source identifies sections 38(1)(b) and 38(2)(b)(iii) as the powers for hot-review orders. A suitably qualified practising or former public accountant mentors the reviewed accountant to improve audit processes. The engagement partner nevertheless remains solely responsible for the judgement, opinion and signed engagement. Review should take place throughout the audit, from initial planning where practicable through completion, and finish before audit conclusion and the report date. This version expressly refers to Practice Direction 2of 2024 for scope; it should not be labelled an unchanged older FAQ.
Select the ordered number and avoid dormant audits
The order specifies the number of engagements and review period according to findings’ severity. Selecting work relevant to inspection deficiencies is encouraged but not itself mandatory. Dormant audits cannot be selected. If there are too few entities with turnover greater than S$10 million, include all such existing engagements first and fill the remaining required number with other non-dormant audits. The ordered total still must be completed within the period. If compliance will be impossible, notify ACRA at least one month before expiry with evidence supporting a request to vary the order; variation is for the committee to consider, not automatic.
Obtain approval within two weeks and check the reviewer’s suitability
The selected reviewer needs prior ACRA approval within two weeks of the order date and must have no independence or conflict issue. A practising accountant with a satisfactory practice-review outcome qualifies; a former accountant with such an outcome and current audit knowledge may also qualify. The reviewer should decline if unable to mentor effectively or commit sufficient time. ISCA’s reviewer list is a reference, not a replacement for approval. If unable to find a willing reviewer, contact the named ACRA officer; ACRA can liaise with the available pool. A request for more appointment time must be made within two weeks of written notification.
Reassess suitability when circumstances change
The reviewed accountant should assess suitability at appointment and again when new factors become known. If the approved reviewer later receives an unsatisfactory result in their own practice review, the FAQ says ACRA normally permits completion of the ongoing engagement for that specific review, but will not permit new future hot-review appointments. This is a limited ongoing-engagement distinction, not permanent approval despite an adverse result.
Agree scope, confidentiality and fees privately
Compensation is privately agreed and need not be reported to ACRA. The FAQ prescribes no standard hours or fee rates because complexity varies. An engagement or appointment letter should address scope, remuneration, confidentiality, responsibilities and professional conduct. Adequate review time should be agreed upfront, taking account of intended sign-off, order expiry and the reviewer’s workload. No fixed minimum interval within the review period is stated. Where a valid delay needs extension, the accountant must notify ACRA one month before expiry; approval remains discretionary and case-specific.
Review the complete file and use the remediation plan
The reviewer should obtain the complete ACRA findings report and remediation plan, assist relevant implementation and use professional judgement to guide improvement. The whole current and permanent audit files should be supplied. Discuss key issues and high-risk areas to assess whether risks were identified and appropriate work performed, rather than review only selected pages. Work must comply with auditing standards, the applicable accounting framework and company-law requirements. The FAQ points to Practice Direction 2of 2024 for further scope details and does not reproduce that entire direction.
Prepare a report, retain it and submit when requested
A written review report demonstrates that review occurred and that the order was complied with. Format is discretionary but AnnexA establishes minimum information. Reports need not be submitted until ACRA requests them; they must still be prepared and available. ACRA may examine them to assess effectiveness and compliance. Failure to comply with the order can result in disciplinary or enforcement action, or both. The reporting rule is therefore not a waiver of documentation simply because no submission has yet been requested.
Annex A: complete engagement information
Minimum information identifies the accountant and reviewer with registration details, each entity and financial year-end, engagement-letter date, partner and manager tenure, report type and sign-off date, subsequent-event review date, activities, materiality, performance materiality and uncorrected detected misstatements, audit approach, risks and key issues, discussion of issues and judgement bases, and review hours. It also requires findings for each engagement, commencement and completion dates, reviewer signature and report date. Suggested SectionA is completed by the reviewed accountant and additionally identifies the firm, includes group materiality where applicable, and ends with that accountant’s signed name and registration number. The suggested template does not remove the broader minimum-information list.
Annex A: the reviewer’s discussion record
Suggested SectionB is completed by the reviewer. It records commencement, completion and hours; planning discussions; discussions of the accountant’s key issues; the basis of key judgements; and the proposed auditor’s opinion. It ends with report date, reviewer signature, name and registration number. These fields turn mentoring into an evidenced review process. Blank template lines are not substantive findings and should not be replaced with invented conclusions; each engagement needs its actual discussion and review record.
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.
Read the official PDF ↗