General

 Economy

 Business Environment

 Legal & Regulatory Environment

 Organizations of the Professions

 Accounting principles & Auditing Standards

 Population: Population in Singapore consists of Chinese, Malay, Indian and others. The Chinese accounted for 77% of the total population, the Malays population for 14.2%, and the Indian population for 7.2%, so while the Chinese have consolidated their dominance over the political system and much of business, individual ethnic groups have formed their own associations, provided they constitute no challenge to the government. Public housing is also often segregated. Fears of labor shortages prompted the government to focus on increasing birth rate, for instance, by giving tax incentive to go for having more children and cash payments to mothers are on a sliding scale, with younger mothers getting more. As birth rate is low, the average age of the population is rising, although not as rapidly as in the industrialized world. In 1995 and 1996 this forced the government to raise the amount individuals had to hold in their Central Provident Fund accounts for retirement.

 Education: Government and population put great stress on education. There have been many improvements in the last 30 years. While older workers who completed their education in 1965 and may have 15-20 years remaining in the workforce are poorly educate, the current state of children’s education appears highly satisfactory. Primary education begins at six and secondary education starts from the age of 12. Pupils the spend two years in a junior college or three years in a centralized college, preparing for the Advanced Level exams, which determine whether or not they can go on to tertiary education. The National University of Singapore was founded in 1980. There is extensive cooperation between industry and the science faculties. There has been increasing debate about whether Singapore’s highly competitive education system really produces the best sort of workers for the modern world, or whether its regimented learning stifles the ‘creativity’ held necessary for success in a modern developed economy.

 Health: Singapore’s healthcare system is a hybrid of public and private provision. The private sector provides around 70% of primary healthcare, the bulk of which comes from state-run facilities. The government favors the control of gees charged, but also the restriction of the supply of services. It does, however, continue to subsidize services, although the exact extent of this subsidy is a matter of debate.

 Natural resources: Singapore has few natural resources. But the country is now paying more attention to the preservation of one particular natural resource: a relatively clean and pleasant environment. A rather-brush National Green Plan was published in 1991 and in 1995 Singapore singed an environmental agreement with Indonesia on the cross-border movement of hazardous wastes, but much work remains to be done.

 Transport: The number of cars on the road is strictly rationed, principally through the certificate of entitlement system. A number of these certificates are released each month through auction and those wanting to put a motor vehicle on the road must bid for them. It costs around S$45,000-50,000(US$32,000-35,000) to keep a large car running. Public transport is famously effective. A complex bus network benefits from the continuing program of road upgrading. The Mass Rapid Transport system is a much-envied under-and over-ground commuter railway system. Changi airport is regarded by many as the world’s best and may be further extended early in the next century.

 Telecommunications: Telecommunications are regarded as too important to be left to the private sector. In 1996 the government announced that Singapore Telecom’s monopoly on basic telecommunications services would end in 2000, and that major international telecoms operates would be free to bid for licenses. The government also announced in 1996 that it would establish a nationwide communications network that aims to provide on-line services to everyone, through terminals in public places and in homes.

 Manufacturing: At the time of independence Singapore’s industrial sector consisted of basic consumer electrical assembly, oil refining and some shipping facilities. In 1967Texas Instruments set up a semiconductor plant, and other electronics firms quickly followed. There was also a massive expansion in oil refining in the late 1960s and early 1970s. In 1980 the first computer disk-drive plants were established, and Singapore became the world’s leading producer of these. During the 1980s the petrochemicals industry was also further developed, and a number of new sectors, notably pharmaceuticals, assumed some prominence. Most of these sectors have continued to prosper in the 1990s, but electronics has reasserted its position as the star performer.

 Construction: The construction sector continued to expand in 1995 and 1996. The aggregate figure for growth in 1995, 8.4% in constant price national account terms, conceals much faster growth in private residential housing.

 Services: The service sector, which includes financial and business support services, commerce and trade, transportation, health care, and government services, produced 60.1% of the GDP and employed 64.4% of the work force.

 Key exports and export partners (S $m)

 Key imports and import partners (S $m)

 Company

 Branch office: A branch office is any office that is registered and maintained in Singapore for business purposes for which the company’s principal office holds ultimate responsibility.

 Representative office: A representative office is any office operation in Singapore under the authorization of the company’s principal office that engages in no direct profit-making activities.

 Joint venture: A joint venture can be either an incorporated company or a partnership and can be formed by both individuals and corporations.

 Partnership: A partnership is almost any unincorporated profit-making business in which contributions and assets are jointly agreed upon and held by two or more partners.

 Sole proprietorship: Proprietorships represent a single individual engaged in a profit-seeking enterprise.

 Government: The Singapore government actively encourages foreign investment. Foreign capital is treated no differently than local capital. There are no restrictions on ownership of Singapore corporations except for national security and in certain areas. There are no exchange controls.

 Local competitors: Foreign investors do not normally meet with local competition since they normally operate in different areas and for different markets.

 Labor: The attitude of the labor force toward foreign investment is positive, as foreign investment has contributed to a high employment rate and improvement n the standard of living.

 The banking system:

 Insurance companies: Medium and long-term financing may be obtained from insurance companies. There are about 140 insurance companies, both local and foreign, and the total funds available for investment by insurance companies have increased over the years with the increase in insurance business.

 Securities markets:

 Civil Law Act. :

Assignment of debt or legal chose.

Contract for the sale of goods

 Company Act.: Registration, formation, and operation of entities

 Copyright Act.: Intellectual property rights

 Trademark Act.: Trademark rights

 The Monetary Authority of Singapore (MAS) is responsible for the regulations of the securities industry.

 The Stock Exchange of Singapore (SES) is responsible for the direct supervision of trading in the market and the activities of its members.

 Security Industry Act.: Trading of securities.

 Employment Act.: Terms of employment and working conditions for employees.

 Industrial Act.: Providing of the framework for collective bargaining, negotiation, and conciliation.

 Workmen’s Compensation Act.: Payment of compensation to employees who are injured in the course of work.

 Trade Unions Act: The regulation of trade unions, their rights and liabilities, and the proper use of union funds,

 The accounting profession is regulated by statute.

 The terms ‘public accountant’ and ‘certified public accountant (CPA) are distinguished by the Accountants Act. CPAs refer to accountants who are member of the Institute of Certified Public Accountants of Singapore.

 CPAs must registered with the Public Accountants Board.

 Public Accountants Board (PAB): it primarily concerns with the registration and control of practicing CPAs.

 It was established in June 1963 as the Singapore Society of Accountants under the Accountants Act, the Society was reconstituted and renamed the ICPAS on 11 February 1989, under the Accountants Act 1987.

 The ICPAS is headed by the Council and the Secretariat is accountable to the Council.

 The Secretariat comprises six divisions: Directorate, Finance and Administration, Membership Services, Practice Review, Technical and Singapore Accountancy Academy.

 It has about 9,000 members, with about 7percent of that number in public.

 It is responsible for technical development, training and other aspects of the profession.

 The system of law and commerce in Singapore all derive historically from the UK. Not surprisingly, therefore, the British accounting system was similarly exported and still feels at home in Singapore.

 Generally Accepted Accounting Principles (GAAP) are derived from authoritative pronouncements, accounting literature and well-established practice.

 Generally Accepted Accounting and Reporting Standards are set out in Statements of Accounting Standards (SASs) issued by the ICPAS.

 The ICPAS also issues statements of Recommended Accounting Practice (RAPs).

 SASs are generally identical to International Accounting Standards.

 Arthur Andersen

 Earnst & Young

 Price Waterhouse

 KPMG Peat Marwic

 Coopers & Lybrand

 Statement of Auditing Guideline issued by the ICPA is used until the Auditing Standards is coded.

 The guideline is largely international standards on auditing adapted to suit local circumstances.

 Statement of Auditing Practice is supplemented the guideline and deals with the detailed work auditors must carry out.

 Historical cost with optional level adjustment

 Going concern

 Accrual basis

 Substance over form

 Balance sheet

 Profit and loss account(Income statement)

 Statement of changes in financial position

 Accompanying notes

 Interest income and dividends.

 Gain or loss on sales or revaluation of noncurrent assets.

 Profit or loss arising from other than ordinary business.

 Interest expense.

 Depreciation of fixed assets, investments and goodwill.

 Directors’ remuneration.

 Auditors’ remuneration.

 Write-offs and provisions for bad and doubtful debts.

 Income tax.

 Unusual (exceptional and extraordinary) items.

 Prior-period items.

 Dividends paid and proposed.

 Transfers to or from reserves and provisions.

 Unappropriated profits or accumulated losses.

 Other intercompany or related-party transactions, if significant.

 Turnover (sales or operating revenue) if S$1million or more and the share of the results of associated companies.

 Where a company issues shares for which a premium is received, the amount in excess of their nominal (par) value is required to be taken to a share premium account.

 This may be applied only for the purposes specified in the Companies Act, such as paying up unissued shares to be issued to shareholder as fully paid bonus shares.

 A company is prohibited from acquiring its own shares or those of its own holding company.

 Long-term investment: valued at either the lower of cost and market value on a portfolio basis or at cost less provision for a decline in the value of the securities.

 valued at market value or the lower of cost and market valued on a portfolio or individual investment basis.

 Inventories are normally stated an the lower of cost(on an actual, average or FIFO basis) and net realizable value.

 The LIFO method is unusual but may be used provided the difference resulting from using this rather than the preferred methods is disclosed.

 Freehold land is carried at cost or appraisal value.

 Buildings on freehold land are carried at cost or appraisal value less depreciation at rate calculated to write off the value of the buildings over their useful lives.

 Real property held for investment need not be depreciated.

 Any appreciation in the value of real property arising from an appraisal is taken to a revaluation surplus.

 Machinery and equipment are normally carried at cost net of depreciation at rates based on the useful lives of the assets.

 There is no legal or accounting prohibition on the revaluation of property, machinery, or equipment or on carrying these assets at revaluation bet of depreciation based on this value for he remaining life of the asset.

 Depreciation methods used include the straight-line, reducing-balance and unit-of-production methods.

 The pooling-of -interests method of accounting for business combinations is allowed by the Companies Act.

 This method may be used where there is a uniting of interest; otherwise, as more often is the case, the purchase nod is to be used.

 Goodwill under the purchase method is either recognized as an asset or amortized on a systematic basis over its useful life or immediately adjusted against reserves.

 The financial year of a subsidiary must coincide with that of its holding company.

 Group accounts must be presented unless a company is a wholly owned subsidiary of a Singapore company.

 The accounts of a group of companies may comprise:

 Equity accounting for associated companies is required even though the concept of equity accounting and associated companies is not found in the Companies Act.

 A reserve is distinguished from a provision.

 The term "reserve" may not be used for amount s set aside or a known liability or for fluctuations in tax charges.

 Reserves are distinguished as being either revenue or capital.

 Contingent liabilities.

 Capital expenditure commitments.

 Details of companies in the group.

 Assets under a charge.

 Significant accounting policies.

 Significant events occurring after the balance sheet date.

 Coopers & Lybrand. International Accounting Summaries-A guide for Interpretation and Comparison. Canada: John Wiley & Sons, Inc., 1991.

 Price Waterhouse. Doing Business in Singapore. New York: Price Waterhouse, 1996.

 The Economist Intelligence Unit. Country Profile, Singapore. London: The Unit, 1996.

 San Rafel & Christine A. Genzberger. The Portable Encyclopedia for Doing Business with Singapore. California: World Trade Press, 1994.

 Gale Research. Craighead’s International Business, Travel, and Relocation Guide to 81 countries. Detroit: Gale Research Inc., 1998.

 Institute of Certified Public Accountant of Singapore