Navigating a New World Post COVID-19 Recovery Stuart Chaplin, - PowerPoint PPT Presentation

Accountant/ Senior Accounts Executive Technology solutions impacting this job… Impact assessment… Within 3 to 5 years , the role will 1) Advanced Analytics/ Big Data Analytics A MODERATE exposure to data potentially… 2) Artificial Intelligence (AI) analytics . It substitutes a small proportion of job tasks, and at the same MEDIUM degree of 3) Robotic Process Automation (RPA) REQUIRE REDESIGN time amplify human performance. change in tasks Key Work Emerging skills Impact at task-level / Future view of job tasks Functions/ Tasks FINANCIAL ACCOUNTING • Business Innovation and Improvement • RPA – automate capturing and compiling accurate journal entries and account information. Supervise • Data Analytics • Advanced Analytics/ Big Data – comprehensive information to generate innovative insights. financial • Digital Technology Adoption and Innovation H • Role shift to reviewing the outputs of RPA processes and handling exception cases accounting and • Digital Technology Environment Scanning corporate requiring additional technical and domain specific knowledge. • Finance Business Partnering • AI – identify patterns which will facilitate forecasting for budgeting and planning Support strategic • Stakeholder Management • Shift to understand data sets and how they are incorporated into AI tools and standardise data planning H initiatives for a more organised data environment. • RPA - reduce the manual effort for basic processes. Support working Skills to be enhanced • Role shift towards strategic and collaborative task such as providing insights on working capital M • Communication management capital needs and funding strategies. • Problem Solving • AI - automatically screen for anomalies and propose corrective actions. Support internal • Sense Making • Focus on more complex issues and advising on policies and procedures that can help to and external M audit activities proactively minimise risks. In the next Utilise the outputs of RPA and AI systems to focus on generating insights, and play a more strategic 3 – 5 role in the organisation. They will also shift to focus on proactively identifying opportunities to reduce risks and providing advise to relevant stakeholders years…

Accounting Executive Technology enablers impacting this job… Impact assessment… 1) Advanced Analytics/ Big Data Analytics Within 3 to 5 years , the role will A SIGNIFICANT exposure to potentially… 2) Blockchain automation , jobs are at risk of convergence or displacement by HIGH degree of 3) Artificial Intelligence (AI) UNDERGO DISPLACEMENT automation. change in tasks 4) Robotic Process Automation (RPA) MANAGEMENT ACCOUNITNG Emerging skills Key Work Impact at task-level / Future view of job tasks Functions/ Tasks • Data Analytics • Data Governance Assist in analysis • Advanced Analytics/ Big Data Analytics - compare key financial metrices across previous of profit & loss, • Digital Technology Adoption and years to derive explanations. balance sheet, H Innovation • Blockchain - reconciliation efforts eliminated as it provides certainty in record transaction and reconciliation history and enables complete and conclusive verification of transactions. • Digital Technology Environment Scanning process • Finance Business Partnering • AI - predict revenue and cost increase/ dip due to internal and external factors. Suggest Assist in • Macroeconomic Analysis product lines or lines of business to focus on. budgeting and H forecasting • Shift towards interpreting and/or validating the outputs of AI Skills to be enhanced • RPA - automate the preparation of financial ratios with more efficiency and greater Analyse and accuracy. prepare financial H • Sense Making • New focus to interpret the financial ratios considering prevalent market environments ratios • Digital Literacy In the next This role can take on new tasks such as interpreting data analysis, providing insights and • Problem Solving 3 – 5 years… recommendations to relevant stakeholders.

Management Accountant/ Financial Planning and Analysis Analyst/ Business Analyst Technology enablers impacting this job… Impact assessment… 1) Advanced Analytics/ Big Data Analytics Within 3 to 5 years , the role will A MODERATE exposure to data potentially… 2) Robotic Process Automation (RPA) analytics . It substitutes a small MEDIUM degree of proportion of job tasks, and at the same 3) Artificial Intelligence (AI) change in tasks REQUIRE REDESIGN time amplify human performance. Key Work Impact at task-level / Future view of job tasks Functions/ Tasks MANAGEMENT ACCOUNITNG Emerging skills Perform financial • Data Analytics • AI - generate multiple variations of financial simulations within minutes to analyse financial modelling to • Data Governance proposals. H support strategic • Shift towards interpreting and/or validating the outputs of AI • Digital Technology Adoption and planning Innovation • RPA – identify gaps in financial and cost accounting Review • Digital Technology Environment Scanning • AI – more accurate forecasting and budgeting based on macro and internal trends completeness of H the financial and affecting the business. • Finance Business Partnering cost accounting • Shift to defining rules for RPA systems and perform training of the machine • Macroeconomic Analysis Analyse trends, • Advanced Analytics/ Big Data Analytics – track past and predict future trends , identify risks and potential business risks. improvements for M Skills to be enhanced • Human interpretation of data and patterns required to generate insights and actionable operational improvement steps to achiev optimal operational efficiency. • Sense Making efficiency • Problem Solving Develop the • Human judgement is key in deriving the appropriate internal control systems for the internal control M organisation. Some physical sighting/ hands-on investigation is required system In the next Focus on utilising human judgement to interpret results and recommend ways to improve operations 3 – 5 years… and performance measurement, collaborating with cross-functional stakeholders.

Four Key Themes of Evolution Of Finance Job Roles 1 2 3 4 Junior FA and MA roles Advancement of the SMEs find it more Possibility of right- have high likelihood of workforce and their shoring certain Finance difficult to implement displacement due to demand for higher roles, while retaining technologies due to technology. skilled roles. lack of funding. higher value roles locally. Tasks will shift towards: Role of Accounts Executive/ When considering a) Providing insights from Accounts Assistant and Companies should strive to implementing new data analytics Accounting Executive has adopt technologies to perform technologies SMEs need to b) Providing input to train diminished and there is an simple and manual intensive assess ROI prior to machines increasing demand for tasks. However, some implementation. Often times higher-skilled roles that shifts companies face the dilemma these technologies have a Degree of technology impact away from data inputs and of technology investment vs. high price tag. SMEs may varies across industry and routine checking. right-shoring, where certain explore available assistance organization size. tasks are outsourced while Education syllabus and programmes/ initiatives to retaining business critical courses prepare graduates to kick-start their technology functions in the local base. transformation journey. take on roles beyond entry Assessment of return on level. investment is required.

Job Mobility - Accounts Executive/Accounts Assistant Within FA and MA Within Accountancy FINANCIAL ACCOUNTING FINANCIAL ACCOUNTING MANAGEMENT ACCOUNTING INTERNAL AUDIT Mobility ACCOUNTS EXECUTIVE/ Options ACCOUNTANT/SENIOR ACCOUNTS SENIOR INTERNAL ACCOUNTS ASSISTANT ACCOUNTING EXECUTIVE EXECUTIVE AUDITOR/INTERNAL AUDITOR Technical Skills and Competencies Technical Skills and Competencies 1) Accounting Standards 1) Accounting Standards 14)Internal controls 16)Financial Reporting Quality 2) Accounting and Tax Systems 2) Accounting and Tax Systems 15)Professional and Business Ethics 17)Financial Statements Analysis 3) Audit Compliance 3) Audit Compliance 16)Professional Scepticism and 18)Group Accounting and 4) Business Innovation and Improvement Judgement 4) Audit Frameworks* Consolidation 5) Data Analytics 5) Business Innovation and Improvement 17)Professional Scepticism and 19)Internal Controls 6) Digital Technology Adoption and Innovation 6) Business Planning* Judgement 20)Professional and Business Ethics 7) Digital Technology Environment Scanning 7) Capital Expenditure and Investment 18)Professional Standards 21)Professional Scepticism and 8) Financial Closing Evaluation* 19)Project Management Judgement 9) Financial Management 20)Tax Computation 8) Conflict Management* 22)Professional Standards 10)Financial Reporting 9) Data Analytics 21)Tax Implications 23)Project Management 11)Financial Reporting Quality 10)Digital Technology Adoption and Innovation 22)Taxation Laws 24)Regulatory Compliance* 12)Financial Transactions 11)Digital Technology Environment Scanning 23)Transactional Accounting 25)Stakeholder Management* 13)Group Accounting and Consolidation 12)Finance Business Partnering* 24)Transfer Pricing 26)Tax Computation 13)Financial Closing 27)Tax Implications 14)Financial Management 28)Taxation Laws 15)Financial Reporting 29)Transactional Accounting * Note: Skill Gap 30)Transfer Pricing

Job Mobility - Accounts Executive/Accounts Assistant Within FA and MA Within Accountancy FINANCIAL ACCOUNTING FINANCIAL ACCOUNTING MANAGEMENT ACCOUNTING INTERNAL AUDIT Mobility ACCOUNTS EXECUTIVE/ Options ACCOUNTANT/SENIOR ACCOUNTS SENIOR INTERNAL ACCOUNTS ASSISTANT ACCOUNTING EXECUTIVE EXECUTIVE AUDITOR/INTERNAL AUDITOR Technical Skills and Competencies Technical Skills and Competencies 1) Accounting Standards 1) Auditor Independence* 14)Internal controls 13)Information Gathering and 2) Accounting and Tax Systems 2) Business Acumen* 15)Professional and Business Ethics Analysis* 3) Audit Compliance 3) Business Innovation and Improvement 16)Professional Scepticism and 14)Internal Audit Engagement 4) Business Innovation and Improvement Judgement 4) Business Process Analysis* Execution* 5) Data Analytics 5) Cyber Security* 17)Professional Scepticism and 15)Internal Audit Engagement 6) Digital Technology Adoption and Innovation 6) Data Analytics Judgement Planning* 7) Digital Technology Environment Scanning 7) Due Professional Care* 18)Professional Standards 16)Internal Controls 8) Financial Closing 8) Enterprise Risk Management* 19)Project Management 17)Professional and Business 9) Financial Management 20)Tax Computation 9) Financial Statements Analysis* Ethics* 10)Financial Reporting 10)Fraud Risk Management* 21)Tax Implications 18)Professional Standards 11)Financial Reporting Quality 11)Governance* 22)Taxation Laws 19)Project Execution and Control* 12)Financial Transactions 12)Infocomm Security and Data Privacy* 23)Transactional Accounting 20)Risk Management* 13)Group Accounting and Consolidation 24)Transfer Pricing * Note: Skill Gap

Job Mobility - Accounting Executive Within FA and MA Within Accountancy MANAGEMENT ACCOUNTING MANAGEMENT ACCOUNTING FINANCIAL ACCOUNTING INTERNAL AUDIT Mobility MANAGEMENT ACCOUNTANT/ Options ACCOUNTING EXECUTIVE FINANCIAL PLANNING AND ACCOUNTS EXECUTIVE/ SENIOR INTERNAL ANALYSIS ANALYST/ BUSINESS ACCOUNTS ASSISTANT AUDITOR/INTERNAL AUDITOR ANALYST Technical Skills and Competencies Technical Skills and Competencies 12)Finance Business Partnering 1) Accounting and Tax Systems 11)Finance Business Partnering 1) Accounting and Tax Systems 2) Audit Compliance 12)Financial Analysis 13)Financial Analysis 2) Audit Compliance 14)Financial Planning* 3) Benchmarking 13)Internal Controls 3) Benchmarking 15)Financial Reporting* 4) Conflict Management 14)Macroeconomic Analysis 4) Business Planning* 5) Corporate and Business Law 15)Management Decision Making 16)Macroeconomic Analysis 5) Conflict Management 17)Management Decision Making 6) Cost Management 16)Performance Management 6) Corporate and Business Law 7) Data Analytics 17)Professional and Business Ethics 18)Performance Management 7) Cost Management 19)Professional and Business Ethics 8) Data Governance 18)Risk Management 8) Data Analytics 20)Risk Management 9) Digital Technology Adoption and Innovation 19)Tax Implications 9) Data Governance 10)Digital Technology Environment Scanning 20)Taxation Laws 21)Stakeholder Management* 10)Digital Technology Adoption and Innovation 22)Tax Implications 11)Digital Technology Environment Scanning 23)Taxation Laws * Note: Skill Gap

LKYCIC: Chart clear pathways to new related jobs/sectors Tasks x Skills Assess impact on jobs and worker x x Complementary frameworks x x x x x x x Growing role and x x x x use of tasks Expands “toolbox” x x x x x x

Job Mobility – Outside of Accountancy Sector (FA- Accounts Executive/Accounts Assistant) Job Role FA - Accounts Executive/ Accounts Assistant Suggested inter- Clinical Data Manager Business Intelligence Analyst Customer Service Representative sector transition Task transition diagram Similar tasks Tasks to train for Similar tasks Tasks to train for Similar tasks Tasks to train for Type Emerging role Emerging role Adjacent role Role Description The role of the Clinical Data Manager The role of the Business Intelligence The role of the Customer Service is to apply knowledge of healthcare Analyst is to produce financial and Representative is to interact with and database management to analyse market intelligence by querying data customers to provide information in clinical data, and to identify and report repositories and generating periodic response to inquiries about products trends. reports. He/she also devises methods and services, and also handle and for identifying data patterns and resolve complaints. trends in available information sources.

Job Mobility – Outside of Accountancy Sector (MA- Accounting Executive) Job Role MA - Accounting Executive Suggested inter-sector Quality Control Systems Manager Logistics Manager Compliance Manager transition Task transition diagram Similar tasks Tasks to train Similar tasks Tasks to train Similar tasks Tasks to train for for for Type Adjacent role Emerging role Emerging role Role Description The role of the Quality Control The role of the Logistic Manager is The role of the Compliance Manager Systems Manager is to plan, direct to plan, direct and/or coordinate is to plan, direct and/or coordinate and/or coordinate quality assurance purchasing, warehousing, activities of an organisation to programmes. distribution, forecasting, customer ensure compliance with ethical service, and/or planning services. and/or regulatory standards. He/She has to formulate quality control policies and also control the He/She has to manage logistics quality of laboratory and production personnel and logistics systems, efforts. and direct daily operations.

Emerging Data Protection Officer Role: Data Existing Roles Similar Tasks (New Role) Tasks to Train (New Role) Protection 1. Liaise with the PDPC on data 1. Ensure compliance of PDPA when Officer protection matters, if necessary. developing and implementing policies and 2. Alert management to any risks that processes for handling personal data might arise with regard to personal 2. Foster a data protection culture among Financial data employees and communicate personal data Accountant protection policies to stakeholders 3. Manage personal data protection related queries and complaints 1. Ensure compliance of PDPA when 1. Alert management to any risks that might developing and implementing arise with regard to personal data policies and processes for handling 2. Liaise with the PDPC on data protection personal data matters, if necessary. Management 3. Foster a data protection culture among Accountant employees and communicate personal data protection policies to stakeholders 4. Manage personal data protection related queries and complaints

Challenges: How Tasks Can Help 1) Job redesign, job rotation and upskilling require mindset shifts - tasks make it possible to see unexpected transitions 2) Greater clarity on training courses is a necessity - tasks make it concrete what is new and what is similar 3) Successful job redesign is multi-faceted and requires planning - tasks help identify the hard and soft skills that are more versatile

Please scan the QR Code below to download the full report “Redefining the Finance Function with Job Redesign” https://isca.org.sg/jobredesignfinance

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For permission to utilise the following materials for education purposes or any other enquiries, please contact ISCA’s Technical Division @ technical@isca.org.sg 2

Complying with a New Code of Ethics Mr Tan Seng Choon Chairman, ISCA Ethics Committee Partner (Assurance), Ernst & Young LLP

Agenda PART 1 Applying the Enhanced ALL PROFESSIONAL Conceptual Framework ACCOUNTANTS Inducements, Including Gifts and Hospitality PART 2 PROFESSIONAL ACCOUNTANTS IN Responding to NOCLAR BUSINESS (“PAIBs”)

PART 1 COMPLYING WITH THE CODE, FUNDAMENTAL PRINCIPLES AND CONCEPTUAL FRAMEWORK APPLYING THE ENHANCED CONCEPTUAL FRAMEWORK

Applying the Enhanced Conceptual Framework – 3 steps approach Fundamental Principles (FPs) Integrity Objectivity Confidentiality • 5 fundamental principles • 3 steps – threats? Professional Competence and Due Care Professional Behaviour 3 steps Step 1: Identify threats to compliance with the FPs Step 2: Evaluate the Identified threats Acceptable Level Reasonable and Informed (revised) Third Party Test (new) Addressing Identifying Step 3: Address the threats Threats Threats Conditions, Polices and Safeguards (revised) Procedures (new) Evaluating Threats

Step 1: Identify threats to compliance with the FPs Categories of Threats SELF-INTEREST SELF-REVIEW ADVOCACY FAMILIARITY INTIMIDATION Addressing Identifying Threats Threats Evaluating Threats

Step 1: Identify threats to compliance with the FPs For Example SELF-INTEREST Does the promise of a large bonus make you hesitant to You are Director of Accounting Policy for investigate the emails that were uncovered? an international manufacturing company: Does it make you less objective? INTIMIDATION • The CEO has a plan to set up operations in an emerging market. As Director of Accounting Policy, you Do I feel threatened in any way with respect to performing my are not sure the plan complies with bribery and job in a diligent, professional or objective way? corruption laws. Does the CEO’s “ whatever it takes ” approach pressure you into feeling that both job and reputation are on the line if • A credible new plan for entering a high-margin market anything slows down or derails entry into the new market? will satisfy the Board of Directors and shareholders. ADVOCACY The CEO has also promised sizable bonuses if the team can “get the job done, whatever it takes .” Are you at risk of over-stating the legitimacy or value of the CEO’s position/plan in spite of concerns over the bribery issue in order to promote the interests of the company? Source: Taken from “Exploring the IESBA Code” <https://www.ifac.org/knowledge-gateway/building-trust-ethics/discussion/exploring-iesba-code>

Step 2: Evaluate the Identified threats RITP Test Acceptable Level (revised) • The level at which a professional accountant (PA) using the Evaluate whether level of reasonable and informed third party (RITP) test would likely threat is at an acceptable conclude that the accountant complies with the FPs level using the RITP Test RITP Test (new) • Consideration by the PA about whether the same conclusions would likely be reached by another party i.e. a RITP • Such consideration is made from the perspective of a RITP, who weighs all the relevant facts and circumstances that the Addressing Identifying accountant knows, or could reasonably be expected to know, Threats Threats at the time the conclusions are made Evaluating Threats

Step 2: Evaluate the Identified threats For Example SELF-INTEREST Let’s use the RITP test to Promise of large bonuses could make the Director hesitant to investigate the evaluate threats identified by the emails that were uncovered, less objective in evaluating the situation, or Director of Accounting Policy. less diligent in understanding appropriate anti-bribery laws. The self-interest threat to integrity, objectivity, professional competence and due care, and professional behavior is not at an acceptable level . INTIMIDATION RITP Test The CEO’s “ whatever it takes ” approach could pressure the Director to just find the “right” answer and approve the plan because jobs and reputations are on the line. The intimidation threat to integrity, objectivity, professional competence and due care, and professional behavior is not at an acceptable level. Source: Taken from “Exploring the IESBA Code” <https://www.ifac.org/knowledge-gateway/building-trust-ethics/discussion/exploring-iesba-code>

Step 3: Address the threats i.e. not all threats can be addressed The PA shall address threats in one of three ways : by applying safeguards! • Eliminating the circumstances creating the threats; • Applying safeguards to reduce the threats to an acceptable level; or • Declining or ending the specific professional activity. (New) The PA shall form an overall conclusion about whether threats have been addressed. Safeguards (revised) • Actions, individually or in combination, that PA takes that effectively reduce threats to compliance with FPs to an acceptable level Addressing Identifying Threats Threats Conditions, Policies and Procedures (new) • Established by profession, legislation, regulation, the firm, or the employing organization that can enhance a PA acting ethically. Might help in identifying threats and evaluating the level of threats but not safeguards . Evaluating Threats

Step 3: Address the threats For Example These threats could be eliminated by cancelling the expansion plan or by ending the professional activity by resigning. What actions could the Director Alternatively, the Director could consider potential safeguards to reduce the of Accounting Policy take to threats such that a RITP would feel that the Director is acting in a manner that address the threats that are not is consistent with the FPs: at an acceptable level? 1. Suggest to the CEO that the Board should be consulted/involved 2. Consult with external legal counsel or advisors with expertise in the INTIMIDATION jurisdiction Involving one of these parties provides an outside perspective that adds SELF-INTEREST objectivity, transparency, and oversight to help ensure that decisionmakers will be more compelled to act objectively and demonstrate professional behavior, integrity, professional competence and due care. Source: Taken from “Exploring the IESBA Code” <https://www.ifac.org/knowledge-gateway/building-trust-ethics/discussion/exploring-iesba-code>

Applying the Enhanced Conceptual Framework When applying the conceptual framework, the PA shall: • Exercise professional judgement ; • Remain alert for new information and to changes in facts and circumstances ; and • Use the Reasonable and Informed Third Party Test. If the PA becomes aware of new information or changes in facts and circumstances that might impact whether a threat has been eliminated or reduced to an acceptable level, the accountant shall re-evaluate and address that threat accordingly. new level of appropriate threats? threats? safeguards?

PART 2 PROFESSIONAL ACCOUNTANTS IN BUSINESS (“PAIBs”) What we will cover: Section 200 Applying the Conceptual Framework – PAIBs Section 220 Preparation and Presentation of Information (Revised) Section 250 Inducements, Including Gifts and Hospitality Section 260 Responding to NOCLAR Section 270 Pressure to Breach the Fundamental Principles (New)

Preparation and Presentation of Information (Revised) New requirements to exercise professional judgement when preparing or presenting information, including: • When activities performed do not require compliance with a relevant reporting framework; and • When relying on the work of others. Prohibition on use of discretion with the intention of misleading others or inappropriately influence contractual or regulatory outcomes Enhanced guidance to address information that is or might be misleading

Pressure (Incentive) to Breach the FPs (New) Prohibition on allowing pressure (incentive) from Pressure (Incentive) others to result in a breach of the FPs Prohibition on placing pressure (incentive) on others that would result in them breaching the FPs FRAUD Opportunity Rationalisation

Pressure (Incentive) to Breach the FPs (New) • Pressure from superiors to approve or process expenditures that are not legitimate Preparation and business expenses Presentation of • Pressure to report misleading financial results Information / non-GAAP measures to meet expectations of investor, analyst or lender • Pressure from others to offer inducements to Inducements, influence inappropriately judgement or Including Gifts and decision-making process Hospitality • Incentive to accept a bribe or other inducement Non-compliance with • Pressure to structure a transaction to evade Laws and Regulations tax

PART 2 PROFESSIONAL ACCOUNTANTS IN BUSINESS INDUCEMENTS, INCLUDING GIFTS AND HOSPITALITY

Inducements, Including Gifts and Hospitality An inducement is an object, situation, or action that is used as a means to influence another individual’s behaviour, but not necessarily with the intent to improperly influence that individual’s behaviour. • Inducement prohibited by Laws and Regulations (e.g. bribery and corruption)? • Inducement made with Intent to improperly influence behaviour (even if trivial & inconsequential)? A PA shall not offer, accept or encourage others to offer or accept any inducement that is made with actual or perceived intent to improperly influence behaviour of the receipient or of another individual even if such inducement is trivial and inconsequential.

Inducements – Bribery and Corruption? Relevant considerations – actual or perceived Intent? • Nature, frequency, value and cumulative effect Gifts Hospitality Entertainment • Customary or cultural practice • Limited to an individual recipient or available to a broader group Political or Employment Preferential • Roles and positions of individuals offering or being offered the charitable opportunities treatment donations inducement Prevention of Corruption Act ( PCA) (Cap. 241) • The PCA is the primary anti-corruption law in Singapore. The PCA empowers the Corrupt Practices Investigation Bureau (CPIB) and governs and defines corruption and its punishments.

Bribery and Corruption News Source: CPIB website <https://www.cpib.gov.sg/press-room/news-articles-related-to-corruption-and-the-cpib>

Bribery and Corruption News Source: CPIB website https://www.cpib.gov.sg/press-room/news-articles-related-to-corruption-and-the-cpib https://www.cpib.gov.sg/press-room/press-releases

PART 2 PROFESSIONAL ACCOUNTANTS IN BUSINESS RESPONDING TO NON-COMPLIANCE WITH LAWS AND REGULATIONS (NOCLAR)

Responding to Non-compliance with Laws and Regulations (NOCLAR) - Effective 1 April 2020 Responsibilities of Overview Professional Practical Issues Accountants & Solutions Whistle- Blower Protection Outcomes to be Achieved by NOCLAR Pronouncement

Outcomes to be Achieved by NOCLAR Pronouncement

Outcomes to be Achieved by NOCLAR Pronouncement Enhanced ethical conduct Stimulate increased Mitigate adverse - Cannot turn a blind eye reporting of NOCLAR to consequences for to potential NOCLAR authorities stakeholders and public Enable the profession to Guardrail of the play a greater role to profession’s reputation combat NOCLAR

Whistle-Blower Protection

Enhancements to Whistle-blowing Framework SGX Regco proposes to require issuers to include in their annual report a statement whether and how the issuer has compiled with the whistle-blowing best practices Independent function to investigate Protection from Confidentiality reprisals Effective whistle-blowing policy Disclose commitment to AC to protect oversee & monitor

What are the available legal protection to whistle- blowers? • Companies Act – for auditors • CDSA • Prevention of Corruption Act • Workplace Safety and Health Act • TSFA • Competition Act • Penal Code Obtain legal advice

Overview of NOCLAR Pronouncement

What is NOCLAR? Acts of omission or commission Cont rary to prev ailin Intentional / NOCLAR? g Unintentional laws or regul ation s Committed by client/employing organisation or TCWG, management or those under the direction of client/employing organisation

Examples of laws & regulations Bribery & Fraud Money Terrorist corruption laundering financing Tax evasion Securities Public health & market & safety trading

Why is NOCLAR Pronouncement needed? A distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest. • New duties and responsibilities - Professional accountants in business (PAIB) - Professional accountants in public practice (PAPP) • Guides how professional accountants should respond • Addresses issue on breach of confidentiality - Engagement letter - Employment contract

Scope of NOCLAR Pronouncement Non-compliance with laws & regulations Direct effect on material Personal amounts/disclosures misconduct in the FS Fundamental to entity’s business & Clearly operations inconsequential matters Public interest implications to stakeholders Applicable to PIE & non-PIEs

Basic steps of NOCLAR Pronouncement Acting in public interest Addressing the matter Obtain an understanding of the matter

Responsibilities of Professional Accountants

Who Does NOCLAR Pronouncement Apply To? PA in Business Ability to make decisions about acquisition, deployment and control of entity’s resources PA in Public Practice Higher public expectations due to nature of works

Responsibilities of Senior PAIBs vs Other PAIBs Senior PAIBs Other PAIBs Escalate NOCLAR to immediate superior/next higher level of Escalate the NOCLAR to the immediate superior/next authority/TCWG higher level of authority Understand & comply with all applicable legal or regulatory Use established internal whistle-blowing mechanism requirements, including requirements to report to an appropriate authority Address the matter, deter the matter, reduce the risk of re-occurrence & determine if there is need to disclose to the external auditor Assess appropriateness of the response of superiors/TCWG & apply RITP test when determining if further action is needed in the public interest based on various factors Not a  Informing the management of the parent entity substitute for taking  Disclosing to appropriate authority even if not required by law other actions  Resigning from employment relationship Documentation is encouraged

Practical considerations

EP 100 IG 3 FAQ on Responding to NOCLAR • Conflicts between laws & regulations & NOCLAR pronouncement • ‘Clearly inconsequential’ • Safe-harbours • Professional clearance tipping-off risk

(1) Laws & regulations vs NOCLAR pronouncement? If there are conflicts PRECONDITION between laws & Observe & comply with all applicable requirements in the laws and regulations NOCLAR Pronouncement, which one should I comply with? Requirement to report Prohibition to alert the the matter to an client prior to making any disclosure appropriate authority

Overview of reporting requirements in Singapore Legislation Offences Authority Corruption, Drug Trafficking & Other Serious Money laundering Singapore Police Crimes (Confiscation of Benefits) Act (CDSA) & serious offences Force Terrorism (Suppression of Financing) Act (TSFA) Terrorist financing Prevention of Corruption Act* Corruption & Corrupt Practices bribery Investigation Bureau Income Tax Act* Tax evasion Inland Revenue Authority of Singapore (IRAS) Environmental Protection & Management Act* Environmental National protection Environment Agency * Serious offences of the Act are specified in the Second Schedule of the CDSA. https://sso.agc.gov.sg/Act/CDTOSCCBA1992#Sc2-

Overview of reporting requirements in Singapore (cont’d) Legislation Offences Authority Companies Act Fraud Ministry of Finance/ Accounting and Corporate Regulatory Authority SGX Rulebooks Securities Singapore Exchange market & trading Monetary Authority of Singapore (MAS) Act Financial MAS products & Securities & Futures Act services Insurance Act Note: The list of reporting requirements stated above is not exhaustive.

Corruption, Drug Trafficking & Other Serious Crimes (Confiscation of Benefits) Act (CDSA) Section 39 – Duty to report STR • Faces the prospect of criminal liability for failing to report suspicious transactions to the authorities relating to money laundering. • All suspicious transactions, including attempted transactions, shall be reported regardless of the amount of the transaction. Section 48 – Tipping Off • Offence to disclose any information to any person if doing so is likely to prejudice an investigation or proposed investigation under the CDSA

(2) What is “clearly inconsequential” matters? Exercise professional judgement (1) Risk management committee 1 Internal (2) Internal legal department RITP Test 2 (1) Seek independent legal advice External (2) Write to ISCA Technical Enquiry Service Final decision rests with the professional accountant

IN CLOSING, ANOTHER EXAMPLE…

For Example Should the Accountant: A. Tender his resignation. You are now an Accountant working for a Singapore manufacturing company: • Can the Accountant stop here? The Director instructed you to record a fictitious B. Be a whistle-blower. transaction to reduce corporate tax payable to IRAS. • What offences have the Director committed? You discovered that the Director had taken a $2 million loan from the company for his personal expenses. C. Report NOCLAR. • Which authorities? You overheard the Director asking auditors to “go easy” on the audit and provide a “clean” set financial statements for submission to investors and bankers. NOCLAR? What actions could you take?

What actions could the Accountant Reporting Channels take? Report to the Board and/or Management A. Tender his resignation. File a complaint to ACRA on alleged offences under • Resignation is not a substitute for the Companies Act taking other actions! <https://www.acra.gov.sg/compliance/enforcement-policy- statement/filing-a-complaint-on-alleged-offences> B. Be a whistle-blower. Report Tax Evasion to IRAS • Fraudulent Financial Reporting <https://www.iras.gov.sg/IRASHome/Contact-Us/Report-Tax- • Tax Evasion Evasion/> C. Report NOCLAR. • Requirements under Companies Act and Income Tax Act • Obtain legal advice NOCLAR?

Implementation Support • IESBA Resources  Basis for Conclusions (Restructured Code): https://www.ethicsboard.org/publications/final-pronouncement- restructured-code-19  Basis for Conclusions (Inducements): https://www.ethicsboard.org/publications/final-pronouncement-revisions-code- pertaining-offering-and-accepting-inducements-3  Basis for Conclusions (NOCLAR): https://www.ifac.org/publications-resources/basis-conclusions-responding-non- compliance-laws-and-regulations  Exploring the IESBA Code: https://www.ifac.org/knowledge-gateway/building-trust-ethics/discussion/exploring-iesba- code  Fact Sheet: http://www.ifac.org/publications-resources/responding-non-compliance-laws-and-regulations-fact-sheet  Staff Questions and Answers: http://www.ifac.org/publications-resources/iesba-staff-questions-and-answers- responding-non-compliance-laws-regulations • ISCA Resources  ISCA Journal Articles: https://isca.org.sg/member-services/is-chartered-accountant-journal/archives/  EP 100 Implementation Guidance 3: https://isca.org.sg/media/2823876/ep-100-ig-3-for-uploading.pdf  ISCA Technical Enquiry Services:https://isca.org.sg/tkc/technical-enquiry-service/

October 2017 ISCA Journal

April 2019 ISCA Journal

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Infrastructure Finance – Focus on Renewable Energy Financing In Asia Kelvin Wong, Managing Director (Project Finance) DBS Bank Ltd August 2020 2

Contents 01 Infrastructure Finance – Renewable 4 Energy Financing 02 Fun Facts on Wind Turbine Generators 7 03 Taiwanese Offshore Wind Market 9 04 Role of Other Singapore Based 13 Companies 05 Role of Accounting & Audit Firms 16 06 Role of DBS – Case Study 18 07 Appendix 21 3

Infrastructure Finance Renewable Energy Financing 4

Infrastructure Finance A Look at the Covid-19 Crisis Renewable Energy Infrastructure Financing Can Lead Economic Recovery After Covid-19 “We’re seeing a major shift towards low - “There is another trend driving “Climate change will continue, regardless “The current pipeline of investment carbon sources of electricity including renewables development that will prove of Covid, we should use this opportunity could create over 50,000 new jobs, lower wind, solar PV, hydropower and nuclear. to be more immune to lower oil and gas that we have been given when restarting power prices, and inject over $50 billion Low-carbon technologies are now set to prices. A growing number of companies, and recovering the economy to have the worth of investment to revitalise extend their lead as the largest source of including many large, global firms, have strategies in place that align with climate economic activity in regional and rural global electricity generation, reaching made commitments to use growing goals.” communities.” 40% of the power mix in 2020.” shares of renewables to meet their – Annica Bresky (President and CEO of – Clean Energy Council on its – International Energy Agency, 5 May captive power needs.” Stora Enso Oyj), Bloomberg Green, 19 renewables-led recovery, 5 May 2020 2020 – Eurasia Group, 18 May 2020 May 2020 Infrastructure Finance Impact of Global Preparation Work Potential to Remains Strong Lockdown On-Track Participate • • • • Infrastructure financing during Manufacturing activities and Preparation work for financing Singapore firms can participate this challenging period is still supply chains are affected due Taiwan’s offshore wind farms in in Taiwan’s offshore wind farms ongoing to lockdowns H2 2020 are still ongoing and • PSA Marine, Sembcorp Marine on-track • • In April 2020, DBS successfully Travel restrictions have also and Keppel O&M have financed Taiwan’s largest impacted construction and supported past projects based floating solar project project development schedules on its unique capabilities 5

Infrastructure Finance Case Study: 180MW Floating Solar PV Project in Changhua City, Taiwan Transaction Summary Relevance of this Transaction • Building on DBS’ capabilities in Taiwan for solar PV, DBS was appointed as Joint Financial Advisor for this transaction. There were multiple first-of-its-kind technical and legal issues that had to be structured around. • This unique transaction showcases DBS’ ability to display thought • • DBS was appointed Joint World’s largest floating leadership in structuring a project financing for the adoption of a Financial Advisor and solar project when new technology in Taiwan. Mandated Lead Arranger completed by end 2020 • DBS also assisted to garner interest from 6 other banks to close the deal in compressed timelines. DBS’ multiple roles 1 in the transaction • • DBS also raised financing Taiwan’s first also demonstrated its wide range of banking products. from 2 international international-style, non- banks and 4 local recourse loan for large- Taiwanese banks scale floating solar project • • Innovatively structured Total debt raised was term loan facility NT$ 7.2bn (~US$ 240m) • Underpinned by 20-year PPA with Taipower 1. DBS was also the Account Bank, Facility Agent, Security Agent, and Hedging Bank. 6

Wind Turbine Generators 7

Wind Turbine Generators Fun Facts about Wind Turbine Generators Did You Know… Offshore Wind Farms are Huge New Commissioned Capacity Market Share Rotor diameters can be more In 2019, 60.7GW of capacity Over half are dominated by 55% than 160m, and turbines can was installed. 88% was onshore MHI Vestas, Siemens Gamesa, be installed up to around 50m additions and the remaining Goldwind and General Electric of sea depth was offshore Wind energy turns the blades around the rotor hub. Modern turbines are designed to spin at Blade varying speeds and are made of glass fibre reinforced plastics. Nacelle Houses the gearbox and generator connecting the tower and the rotor. Sensors turn the nacelle into the wind to maximize output. Generator Device that converts mechanical energy into electrical power for use in an external circuit. Hub Holds the blades and connects them to the main shaft of the wind machine – a key component to maximize aerodynamic efficiency. Gearbox Converts the turning speed of the blade's rotations into faster revolutions per minute that the generator needs to generate electricity. Wind velocity increases at higher altitudes. The Tower supports the structure of the turbine Tower and enables them to capture more energy. At different depths, WTGs require different types of bases for stability e.g. a monopile base is Foundation used for depths up to 30m while in deeper water depths a base with a tripod or steel jacket is used for stabilization. Sources: Wind Power Monthly, BloombergNEF 8

Taiwanese Offshore Wind Market 9

Taiwanese Offshore Wind Market An Overview of the Renewable Landscape A Commitment to Renewable Challenges Country Profile Energy By 2025, the government aims • Large-scale renewable energy projects require participation from PPA Term/FIT 20 years to install 20GW of solar capacity, international lenders with ECA involvement given amount of funding Investment Grade 1 Offtaker Rating 1.2GW of onshore and 5.5GW required. of offshore wind capacity. • Increasing local content requirements may result in reduced ECA Yes (model PPA supported Bankability of PPA participation, testing international lenders’ interest. This can be further by local legal framework 2 ) The government’s agenda of impacted by the current lack of local expertise and congestion of projects phasing out nuclear plants and coming onstream. ECA Cover Possible reducing reliance on thermal • Annual adjustments in future FITs and potential political risk arising from fuel imports are facilitating Currency NTD change in ruling party may dampen investor interest. renewables development. Onshore/Offshore Wind, • Hedging market is currently available for up to 10 years. Resource Type Solar, WTE (limited), Taiwan Strait receives top Geothermal (limited) ranking globally for wind speeds from 4C offshore. Supportive regulations via the Opportunities Solutions Renewable Energy Development Act (“REDA”) and • • Strong pipeline of projects and government support, including FITs, tax Corporate PPA, when structured well, may Electricity Business Act (“EB breaks and tradable energy certificates. generate interest for financing. Act”) which provides for • • Strong investment potential due to investment grade offtaker2 and Potential to develop bonds as part of debt priority of grid dispatch and FIT established renewable energy regulatory regime. capital structure in refinancing transactions regime as seen in the more mature UK market. • Plenty of opportunities to partner with existing sponsors via partial acquisition. 1. State- owned power utility company Taiwan Power Co. Ltd (“ Taipower ”) is rated AA - (Stable Outlook) by Fitch Ratings 2. Takes into account elements under local law and regulations that are supportive of renewables. 10

Taiwanese Offshore Wind Market Overview of Offshore Windfarm Projects in Taiwan Map Capacity Tariff Locations of Offshore Wind Farms in Taiwan Project Connection Year Sponsor Label (MW) (NT$/kwh) Macquarie, Formosa 2 378 7.12 / 3.57 2021 Guanyin Swancor Taipei Taoyuan Formosa 1 2017 Macquarie 128 7.11 / 3.46 Formosa 1/2 Greater Changhua – North West Yunlin 2022 wpd 708 7.12 / 3.57 Greater Changhua – North East Guanyin 350 TBD 2022 wpd Greater Changhua – South West Greater Changhua – South East Greater Changhua Southeast 605 6.28 / 4.14 2021 Orsted Phase 1 Hai Long 2/3 T’aichung Greater Changhua 2021 / 2025 Orsted 295 6.28 / 4.14 Changfang & Xidao Southwest Changfang & Xidao 2022 / 2023 CIP 600 6.28 / 4.14 Zhong Neng Zhong Neng 300 6.28 / 4.14 2023 CIP, CSC, DGA Yunlin Taipower TBD Taipower 300 n/a Hai Long 2 2024 Northland Power 300 6.28 / 4.14 2025 Northland Power Hai Long 2 232 2.23 T’ainan Hai Long 3 512 2.50 2025 Northland Power Phase 2 Greater Changhua Northeast 583 2.55 2026 Orsted Kaohsiung Greater Changhua 337 2.55 2025 Orsted Northwest Sources: 4COffshore, DBS Bank 11

Taiwanese Offshore Wind Market Typical Project Risk Allocation ALLOCATED TO RISK CONSIDERATIONS PROJECT CO EPC O&M Similar to the UK offshore wind market • Single lumpsum turnkey EPC contract is not available Construction Cost Overrun / ✓ ✓ • Multi contracting approach required Interface Risk • Contingencies, LDs and sponsor experience to be considered • WTG O&M typically undertaken by WTG supplier ✓ • O&M Risk Long term supply agreement to ensure availability of spares • O&M contractor responsible for vessel charter for site access • Energy yield assessment typically requires more than 12 months of data ✓ Wind Resource Risk • Seasonality changes may affect short term generation and cash flows Different from the UK offshore wind market Local supply chain not as developed; longer lead time for equipment supply and transportation, hence ✓ Local Supply Chain increasing risk for construction delay ✓ Tariff (Inflation) Risk Tariff is fixed under Taipower PPA but no indexation to CPI (e.g. in the UK, for the CfDs) ✓ Interest Rate Risk NTD IRS tenor could be up to 10 years vs longer tenors available in UK • Seasonal risks (i.e. typhoon) affecting contingency sizing in terms of costs and construction schedule ✓ Natural Force Majeure Risk • Reliance on insurance for natural catastrophe (eg seismic) in both markets but capacity for TW market may be constrained 12

Role of Other Singapore Based Companies 13

Role of Other Singapore Based Companies Simplified Layout of An Offshore Windfarm Pictorial Representation of an Offshore Wind Farm Project Specifications: ▪ Distance from Shore: 4-10KM ▪ Sea Depth: 35-55m ▪ Hub Height: ~115m ▪ Blade Span: ~80m ~ 167M ~115M 4KM to 10KM 35M to 55M ▪ Electricity produced by the wind turbine generators are transmitted via offshore electrical cables to an onshore substation which connects the Project to the Grid 14