General

What do the letters BDO stand for?
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The BDO International network was founded in Europe in 1963 when forward-thinking accountancy firms from the UK, Germany, The Netherlands, USA and Canada joined to form the Binder Seidman International Group. Ten years later, the European member firms took on the common name of Binder Dijker Otte & Co: BDO.

What type of services does BDO offer?
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BDO's core services are:

• Accounting Management
• Audit & Assurance
• Business Restructuring
• Risk Advisory
• Business Transaction Services
• Corporate Finance
• Corporate Secretarial
• Management Consulting
• Tax Advisory

How big is the office locally and internationally?
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Our local office has over 250 staff, including 11 Partners, 4 Directors/Principal, 210 Professional Advisors and 30 Support staff in the firm. Internationally, BDO has  more than 620 offices in over 110 countries. A combined workforce of almost 32,000 people continues to promote and extend the values and objectives foreseen from the outset. BDO is known for client rapport and partner accessibility, for extensive local knowledge combined with a global outlook, and for partners and staff who are challenging, ethical and practical in their approach and advice to clients.

1. What is the responsibility of auditors?

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The responsibility of auditors is to form an opinion as to whether:

(a) the financial statements are properly drawn up in accordance with the provisions of the Singapore Companies Act, Cap. 50 (“Act”) and Singapore Financial Reporting Standards (“FRS”) so as to give a true and fair view of the state of affairs of the Company as at year end and of the results, changes in equity and cash flows of the Company for the financial year ended; and

(b) the accounting and other records required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act.

2. What are common misconceptions on the role of auditors?

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Under Accountants (Public Accountants) Rule 2004, the auditors are prohibited from preparing accounting information and financial statements which include but are not restricted to computation of current income tax and deferred tax, preparing audit schedules, assessment of impairment of assets (tangible and intangible) and drafting of financial statements.

Auditors are not required, and are not able, to test every single transaction that a company has entered into or to provide a guarantee that the financial statements are 100% accurate. Auditors do provide an expert opinion on whether the financial statements are true and fair.

3. What are the benefits of audited financial statements other than meeting the statutory requirements?

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- Satisfy stakeholders as to the credibility of published information
- Facilitate payment of corporate tax and GST on time, thereby avoiding interest and penalties
- Enable them to comply with banking covenants
- Facilitate the purchase and sale of business
- Take advantage of the spin-off benefits such as advise on the structure and operations of systems
- Demonstrate good corporate governance

4. Who is responsible for preparing the financial statements for audit?

Ans:
The Singapore Companies Act, Cap. 50 expressly requires directors to present financial statements that comply with the prescribed FRS and also to reflect a true and fair view of the results, as well as the state of affairs of the company.

5. What are the penalties for non-compliance of the Singapore Companies Act, Cap. 50 and Singapore Financial Reporting Standards (“FRS”)?

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A director who fails to comply with these provisions will be liable upon conviction to a fine of up to S$50,000. Note that the fine will be increased to S$100,000 and the offender may also be imprisoned for up to 3 years if the offence is committed with an intent to defraud.

6. What other services can you request from auditors other than statutory audit?

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Assurance and other attestation services like due diligence, forensic, review of financial statements, application and renewal of Major Exporter Scheme and other special projects.

7. Who is responsible for the prevention and detection of fraud?

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The primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and with management.  The respective responsibilities of those charged with governance and of management may vary by entity and from country to country.  In some entities, the governance structure may be more informal as those charged with governance may be the same individuals as management of the entity.  The auditor’s responsibility is not to detect fraud, but to detect material misstatements in the financial statements caused by fraud.

8. Why do auditors need to look at company’s internal controls in addition to auditing the financial records?

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Auditors need to understand the internal controls and system of the company in order to assess the level of assurance to be placed on the effectiveness of the company’s internal controls.

1. Do we really need a business plan to raise funds?

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If you plan to raise funds in Singapore, then it's probably safe to say yes. In fact, you may require more than one business plan: one for raising capital and one for running your business. The former is a compact, easily digested strategic document that is designed to persuade potential investors to pick up the phone and invite you to their offices for an initial meeting. The latter is a more detailed document serving as a day-to-day roadmap, detailing the tactics supporting your overall strategy. The former needs to be an attractive document that sells; the latter can be a collection of spreadsheets, lists, research summaries, and other documents stuffed in a binder that you refer to and update on a regular basis. BDOC has a team who specialize in preparing the capital-raising business plans, but many of the by-products are suitable for use in the operating business plan.

2. Why should we hire a consultant to write our business plan instead of doing it ourselves?

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You could easily spend 500 hours or more preparing an investor-grade business plan, financial forecast, and investor presentation, even if you have an MBA. This is the time you should probably be spending building your team, product, distribution channels, and customer base. In addition to our expertise in preparing these materials, we offer independent, third-party insights into your business, and may raise questions that you might not have thought to ask.

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Yes, but firstly you need to know which groups of investors to target based on the stage of your business (start-up, growth, or mature), amount of funds that you need to raise, and your industry segment. It is also imperative that you understand the intricacies of the Singapore private capital markets as briefly outlined below:

Venture Capital in Singapore

The venture capital market is growing and active in Singapore. However, it primarily invests in regional projects at the growth/expansion stage or pre-IPO. There are a handful of VCs that will look at early stage projects that have a high level of innovativeness and massive market potential. The investment quantums VCs typically look at are from above S$1,000,000 to S$30, 000,000.

Angel Investors in Singapore

The Angel Investment scene in Singapore is growing strongly each year. There are a number of active private investors willing to invest in companies at ALL stages of an organisations business lifecycle. The investment quantums Angels typically look at are between S$50, 000 to S$500,000.

Government Grants and Funds

SPRING Singapore, EDB, IE Singapore, IDA, MPA and other local government agencies offer various R&D grants, subsidies and private equity funds for organisations with operations in Singapore. The critical message to understand with government grants and subsidies is that they can only be a part of your capital strategy and will not be sufficient to fund your venture without obtaining a 3rd party investor or contributing your own capital investment.

5. I have a good idea what my company is worth, why should I use an outside valuation firm?

Ans:
Trust and credibility. It is as simple as that.
A buyer would question a valuation report prepared by the business owner or the owner's CPA.
That is why you should run an independent report to add credibility to the asking price. Prospective buyers looking at your business will request it.
The independent report favours neither seller nor buyer. It simply looks at the financial information and recasts them back to market value using statistical models that have been developed over the past 20 years.

No other internal review will be able to offer you such analysis.

When is a good time to meet us?

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It would be good to perform a health check on the business and financials of the company when there are early signs like:
       
- when there have been cash flow problems for the past six months;
- when the liabilities of the company exceed its assets;
- when creditors have commenced legal proceedings;
- termination of main contract(s)  and
- disputes amongst directors and / or shareholders

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The nature of the business and the degree of financial damages are essential information for our team to evaluate if judicial management is the best solution to revive the company.

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An in-depth understanding of the industry and the relationships between the company and its creditors are important to ascertain if an informal workout is adequate. Otherwise, we would recommend a formal workout to improve the cashflow of the company.   

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The primary role of a monitoring accountant is to assist the company in meeting the objectives and/ or obligations as set out by the creditors of the company, namely the banks, financial institutions and debenture holders.

Why is BDO your spontaneous choice?
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Knowledge sharing amongst our international network provides the team with strong understanding of the various industries and enhances our technical proficiency on cross borders insolvency legislation. Efficiency, cost effectiveness and provision of practical solutions to businesses are the main hallmarks of our services.

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The issue is not whether you can afford it. The issue is whether you have the right calibre of personnel to help you in your business and growth.

The accountant in your organization is the ultimate authority on all financial matters. What if he has not kept up with the changes? In our environment, we face issues everyday and are constantly being informed of changes, formally and informally, within our organisation. Our personnel are updated with the information that will help your organisation to be relevant.

What are the benefits of outsourcing?

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Ask yourself whether you are receiving financial reports regularly and on a timely basis? Business owners need relevant management information to manage. Outdated information is of no benefit to you or to the company. In the current business environment, to have the information on hand to make the right decision will help the company to generate profit and to grow.

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Our personnel are experienced people from diverse industries. We capitalize on this to help our client.

1. Who can be the director of a company?

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- A director must be a natural person i.e. not a corporation or other legal entity;
- Full age and capacity i.e. 21 years old
- Qualified under the Companies Act e.g. not being an undischarged bankrupt, not been convicted of any offence in connection with the promotion, formation or management of a corporation, not been involved fraud or dishonesty punishable on conviction with imprisonment for 3 months or more, etc.

2. Can a company not to appoint a company secretary?

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No.  Every company must have at least one company secretary.  Secretaries must be natural persons who have their principal place or only place of residence in Singapore.  The first secretary of the company must be appointed within 6 months of incorporation.  

3. When to hold for an AGM?

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Under Section 175 of the Companies Act, every company must hold its first AGM within 18 months from the incorporation date.  The subsequent AGM must hold once in every calendar year and not more than 15 months after the holding of the last preceding.

4. Can a dormant company/small exempt private company submit an Annual Return without Audited Accounts with ACRA?

Ans:
A dormant company / small exempt private company is required to submit Annual Return together with a unaudited accounts prepared in accordance with the accounting standard/Certificate by an Exempt Private Company with ACRA within one month from the AGM date.

5. Who has access to accounting records?

Ans:
- Company directors
- Company auditors
- Minister for Finance
- Trustee for debenture holders of the company
- Inspector, where the company is subject to investigation
- Official Receiver, if he is not appointed as liquidator of the company
- Creditors and contributors, if empowered by the court
- Any person authorized by court order to inspect the books and papers of a company
- Comptroller of Income Tax or any officer authorized by him

6. Can a company issue share with a nominal value/par value after 30 January 2006?

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No.  Under the provision of Companies (Amendment) Act, a company is not allowed to issue share with nominal value/par value after 30 January 2006.

7. Can a company change its Registered Office without notifying ACRA?

Ans:
No.  A company must notify ACRA within 14 days of the change of the registered office.