Chair of Singapore Accountancy Commission tasked with transforming sector.
Michael Lim has a big job to do. As the chairman of the newly formed Singapore Accountancy Commission (SAC), he is tasked with transforming the Singapore accountancy sector and helping it capitalise on the multibillion-dollar Asia-Pacific market for accounting services.
His passion for the massive task is clear. He walks purposefully into the room for this interview and, even before the first question is asked, begins to share his thoughts on the direction he believes Singapore’s accountancy profession needs to take.
“Accountancy is a very worthwhile profession,” Lim says. “I would like to promote it through many avenues.
“There are people who have taken the professional route and done well. There are also those who are qualified accountants and have gone out and become CEOs. We must be able to learn from each other.”In his new role, Lim will be driving a slew of initiatives aimed at positioning Singapore as a global accountancy hub.
The Asia-Pacific accountancy market for professional services is estimated to be worth US$38.3 billion. Singapore wants to tap into the vast opportunities in this sector as part of plans to restructure its globally connected economy to stay ahead of competition and further entrench its reputation as an international financial centre.
The SAC was created in April on the recommendation of the government-appointed Committee to Develop the Accountancy Sector (CDAS). Three years ago the CDAS unveiled 10 strategic recommendations for growing the accountancy sector’s contribution to Singapore’s gross domestic product (GDP) from 0.4 per cent in 2010 to 1 per cent by 2020. The World Bank’s latest available estimate puts Singapore’s GDP at about US$240 billion.
Lim believes a robust Singapore-branded accounting professional qualification, which the country currently lacks, is critical to developing the accountancy sector.
“Without that, no matter what you tell me, you are never going to grow the profession because your qualification is not going to be internationally recognised ,” Lim says. “I think this is fundamentally necessary for us to develop.”
The SAC’s fundamental goal now is to launch a Singapore Qualification Programme (SQP) this month. The SQP will confer a new Chartered Accountant (Singapore) designation on those who complete its professional examinations and a three-year practical experience requirement. The program also seeks to attract people from non-accounting disciplines.
“When you have engineers and others in different disciplines who decide to become accountants, you develop a better plan of future accountants,” Lim says.
“Accountants who are not 100 per cent trained in accounting, but who have had exposure to other disciplines – I think that makes a better match going forward.”
But he acknowledges growing the Singapore accountancy sector will have its challenges, even though there are plenty of resources available.
“Growing a market is a vision. It’s a long‑term goal that you want to reach to develop the profession. But you have to start from basics, you have to make sure you have all the grounding that is necessary.”
Basic grounding will come from the SQP, but Lim thinks there are other major priorities that need to be tackled – such as growing the “accountancy sector eco-system” by bringing in new players who can widen the depth and breadth of accountancy services. He also feels there is value in developing skill sets in areas such as internal audit, business valuation, risk management and taxation.
"If I want to send somebody to train, where would I pick? If people think Singapore is the centre, then we have done well." – Michael Lim
“Audit and tax are traditional areas where qualified accountants will end up. Likewise, valuation, internal audit and risk management. If you can develop Singapore into a centre of excellence for these areas, we can then become the hub for training people who can go out into the region.”
Lim acknowledges his commission has limited human resources for all the work at hand and feels that collaboration with key stakeholders is the way to go.
“We welcome all parties, CPA Australia included, because we want to bring in everybody,” he says.
“Our role is broad. It’s to develop the profession as a whole, so whoever can help us with that, we want to join hands.”
One area where Lim envisions the profession joining hands is in grooming and training chief financial officers (CFOs). This space has been getting somewhat crowded in Singapore in the past three years, with the Big Four accounting firms, universities and professional bodies competing for profile and visibility.
“The SAC would like to play the pivotal role,” Lim says. “We have a CFO Institute and we are in dialogue with the Big Four, which do similar work here.
“Our plan is to collaborate and encourage them to be part of one whole grouping. That way, the numbers expand, the coverage expands, and the constitution of ideas can be a lot more.”
He also sees opportunities in collaborating with educational institutions on quality research.
“The quality of the profession has a linkage with the quality of research papers. If you can have great research papers, people will see you also as a nation that spends effort, time and money on research.
“Invariably, you will start attracting the contacts like the International Accounting Standards Board and other leading institutes.”
Singapore will have arrived, Lim says, when it is top of mind for anyone choosing to become an accountant or finance professional.
“If I want to send somebody to train and develop people in the accountancy sector in all the areas I have described, where would I pick? If people think Singapore is the centre, then we have done well.”
Lim believes accounting is an excellent foundation for executives who aspire to head businesses or become company directors. Lim himself has an accounting background, having spent more than 30 years in the profession. During his career he rose to become managing partner of PricewaterhouseCoopers Singapore from 1992 and served as its executive chairman from 1999 to 2003. Since then he has continued to build impressive credentials, concurrently serving as chairman of several commercial and public sector outfits such as Nomura Singapore, the Land Transport Authority and the Accounting Standards Council.
“Training as an auditor has an advantage in that you are able to see things more clearly [as a director]. You are able to read financial statements better than somebody else. You have an eye that very often tells you something is not quite right somewhere in the financials. You are much faster in recognising them.”
An accounting background is also useful from the risk and governance perspective.
“Because of your exposure to various types of industries, you are able to share with others the experiences and insights that you have gained from one industry to another – and there are commonalities,” he says.
Lim says one area in which the profession clearly needs to improve is talent retention. According to a 2012 survey commissioned by Singapore’s Accounting and Corporate Regulatory Authority, some two-thirds of respondents with fewer than five years’ experience and working in major accounting firms intended to leave their present employers within three years.
When the Singapore economy is booming its financial sector is very attractive to junior staff at accounting firms, in part because it offers better remuneration packages.
“We hope part of these retention problems can be resolved by the SQP because of the requirement that anyone undergoing the program will need a three-year practical experience with the same employer,” Lim says. “We also hope it will slow down attrition, because the SQP will allow non-accounting graduates to come in.”
But he also believes accounting firms will have to do their part by addressing a particularly sensitive issue: salaries. He cites the common practice of junior accountants being given a relatively lower salary in their first few years.
“That argument going forward becomes less sustainable because it is the same for every profession,” Lim says. “Accounting firms have to start thinking seriously about whether they should re‑examine their salary structure, especially in the first few years of employment.
“You can work something out so people are prepared to invest in the future.”
As for future accountants, Lim believes there are many good prospects in the profession.
Recalling his more than three decades in the business, Lim has one simple piece of advice for aspiring accountants.
“You should embrace the profession. Put all your heart and soul into it and work within the profession to grow, because there are a lot of opportunities.”
Melvin Yong is CPA Australia’s general manager – Singapore.
This article is from the June 2013 issue of INTHEBLACK magazine.