ACRA’s Financial Reporting Surveillance Programme: What Happens If Your Accounts Are Reviewed

The Financial Reporting Surveillance Programme is how ACRA selects filed financial statements and checks whether they actually comply with the prescribed accounting standards. If yours are selected and something is wrong, the consequences run from a findings letter through to composition sums and prosecution, and they attach to directors.

Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.

Most Singapore directors have never heard of the FRSP until a letter arrives. That is the problem with it. The programme is not an audit of the auditors and it is not a tax enquiry. It is a regulator reading your accounts against the standards and asking you to explain the gap.

Here is how a review works, what the escalation ladder looks like, and what a sensible response involves.

What the FRSP actually is

ACRA selects financial statements and reviews them for compliance with the accounting standards prescribed in Singapore. That is the whole mechanism. There is no application, no notice period and no opt-out. Selection is ACRA’s, and the company finds out when it is contacted.

The legal hook sits in the directors’ own obligations. Sections 201(2) and 201(5) of the Companies Act 1967 require directors to lay before the company financial statements that comply with the prescribed accounting standards and give a true and fair view. The FRSP is ACRA checking that those duties were discharged. It is not a separate standard applied after the fact.

That framing matters for how you respond. The question ACRA is asking is not “would you do it differently now”. It is “did the accounts you signed comply”. Those are different questions and they call for different answers.

Who is in scope

Singapore-incorporated companies filing financial statements have always been within the programme. From 26 August 2025 ACRA extended financial reporting surveillance to other SGX-listed issuers, which brings in business trusts, real estate investment trusts and foreign-incorporated companies listed on the Singapore Exchange.

The practical effect of that extension is that the surveillance net now covers the whole set of entities raising money from the Singapore public, rather than only those whose accounts arrive through the ordinary ACRA filing pipeline.

For the listed issuers, ACRA has said that where it finds material non-compliance it may inform the Monetary Authority of Singapore, for MAS to assess potential breaches of the Securities and Futures Act 2001, and Singapore Exchange Regulation, for its assessment of potential Listing Rule breaches. MAS sets out its own approach in its published enforcement materials. One review can therefore generate three regulatory conversations.

What a review looks like from your side

The sequence is not mysterious, but it is uncomfortable if you are unprepared.

1. An enquiry. ACRA contacts the company where it appears that the financial statements do not comply with the accounting standards. For a listed issuer this can include requests for information or documents and direct engagement with management to clarify issues.
2. You respond. This is the stage that determines everything downstream. A response that explains the accounting policy applied, the judgement made, the standard relied on and the basis for it is a different document from a response that says the auditors signed it off.
3. Findings, if ACRA is not satisfied. ACRA issues findings letters setting out the non-compliance. The expectation is that you address the findings in future financial statements.
4. Remediation, where needed. ACRA may require action, including revising past financial statements. That is a real cost: a revision under section 202A of the Companies Act 1967 means new accounts, a new directors’ statement, a fresh auditor’s report and a filing with its own deadline.
5. Escalation, in serious cases. ACRA may issue warning letters, impose composition sums, or prosecute.

Note where the pressure sits. Steps 1 and 2 are cheap. Step 4 costs real money. Step 5 attaches to directors personally.

The answer ACRA is looking for

A good response to an FRSP enquiry has four parts, and they are almost always the same four:

• The standard. Which standard governed the item, and which paragraph of it.
• The facts. What the underlying transaction or balance actually was, with the documents.
• The judgement. Where the standard allowed judgement, what judgement the directors made and on what basis, as at the date of the accounts.
• The disclosure. Where the accounts disclosed that policy and that judgement.

If you cannot assemble those four for a challenged item, you have found your answer before ACRA tells you. Better to know that early.

Where companies actually get caught

The standards that generate FRSP attention are the ones that require judgement rather than arithmetic. In our experience the recurring themes are consistent.

Fair value measurement. Level 3 inputs, unsupported valuation assumptions, and disclosure that does not let a reader understand how the number was arrived at. The hierarchy is the whole point of the standard, and skipping the disclosure invites a question. Our note on FRS 113 fair value measurement sets out what directors should be asking.

Investment property. The choice between the fair value and cost models, and whether the property is investment property at all. The accounting and the tax treatment pull in different directions, which is covered in our piece on FRS 40 investment property.

Segment reporting. Companies that have grown across business lines or geographies and are still reporting as though they had not. The trigger points are in our guide to FRS 108 operating segments.

Related party and key management disclosure. Under-disclosure here is common and easy for a regulator to spot, because the counterparties are usually visible elsewhere in the filings. See our note on key management personnel compensation disclosure.

Consolidation boundaries. Entities controlled but not consolidated, or consolidated without a clear control analysis. This one tends to surface in group structures assembled over time by different advisers.

ACRA publishes findings from the programme so that companies can learn from other people’s mistakes rather than their own. Reading the published FRSP reports before your next year end is a cheaper use of an afternoon than almost anything else on this list.

What goes wrong, and what it costs

“The auditors signed it.” This is the single most common defensive position and it is the weakest. The statutory obligation to prepare compliant financial statements sits on the directors under section 201. The auditor’s opinion is evidence that someone else agreed, not a transfer of the duty. ACRA’s findings letters go to the company and its directors.

Answering slowly, or partially. An enquiry that gets a thin answer gets a follow-up, and the file ages badly. A company that takes three rounds to produce its valuation workings looks like a company that did not have them.

Fixing it only going forward. ACRA’s default expectation is that findings are addressed in future financial statements, but it may require remediation of past ones. Companies that assume the prospective fix is automatically enough sometimes discover otherwise after they have already filed the next year’s accounts on the old basis.

Ignoring the knock-on for listed issuers. If you are a listed issuer, a material non-compliance is not contained within ACRA. The referral routes to MAS and SGX RegCo mean the accounting question can become a securities law question and a listing rule question in parallel.

Losing the working papers. Judgements made three years ago are defensible if the reasoning was documented at the time and indefensible if it was not, even where the judgement was correct. Contemporaneous documentation is the cheapest insurance in financial reporting.

Frequently asked questions

What is the Financial Reporting Surveillance Programme?
It is ACRA’s programme for selecting and reviewing filed financial statements to check compliance with the prescribed accounting standards. ACRA contacts the company where the accounts appear non-compliant, issues findings letters where it confirms non-compliance, and can escalate to warning letters, composition sums or prosecution in serious cases.

How does ACRA choose which financial statements to review?
Selection is ACRA’s, and companies are not told in advance. There is no application process and no way to opt out. The practical planning assumption for directors is that any set of filed financial statements could be reviewed, so the accounts should be defensible on their own terms when they are signed.

Are directors personally exposed under the FRSP?
Yes. The duty to prepare financial statements complying with the accounting standards sits on directors under section 201 of the Companies Act 1967. Findings letters, warning letters, composition sums and prosecution engage the directors, not only the company. An auditor’s clean opinion does not transfer the obligation.

Does the FRSP apply to REITs and business trusts?
From 26 August 2025, ACRA extended financial reporting surveillance to other SGX-listed issuers, which includes business trusts, real estate investment trusts and foreign-incorporated companies listed on the Singapore Exchange. Material non-compliance may be referred to MAS and to SGX RegCo for their own assessments.

Can ACRA make us restate prior year accounts?
ACRA may ask for remediation, which can include revising past financial statements. A revision is done under the voluntary revision route in the Companies Act 1967, and it requires revised accounts, a new directors’ statement, an auditor’s report where applicable, and a filing with ACRA within a defined window.

What should we do first if we receive an enquiry?
Identify which standard governs the challenged item, retrieve the underlying documents and the contemporaneous working papers, and reconstruct the judgement the directors made as at the date of the accounts. Then answer in full, once. Partial answers generate follow-ups and make the file look worse than it is.

Being ready before the letter arrives

The companies that handle an FRSP enquiry well are not the ones with the best lawyers. They are the ones who can produce, within a week, the standard, the facts, the judgement and the disclosure for any line in their accounts. That is a function of how the accounts were built, not how the letter was answered.

Raffles Corporate Services prepares and reviews financial statements for Singapore companies against the prescribed accounting standards, documents the judgements as they are made, and handles the ACRA filings that follow. If you have received an enquiry, or if you suspect a prior year contains something you would rather find first, that is worth a conversation now rather than after the next filing goes in on the same basis.

If the review is heading towards a correction, our guide to XBRL filing with ACRA covers how the filed data has to follow the revised accounts. There is more on Singapore corporate practice at Singapore Secretary Services.

— The Editorial Team, Raffles Corporate Services