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According to Deputy Prime Minister Lawrence Wong, there is a relatively high “leakage” of accountancy graduates to other sectors.
Singapore's accountancy sector is reporting a growing demand for accounting services. Yet, there remains a challenge in finding enough accountants to meet this growing demand.
In a speech at the ISCA 60th Anniversary Dinner, Deputy Prime Minister Lawrence Wong shared data that fewer students are enrolling in accounting degrees in Singapore — and amongst those who do enrol, a reducing proportion, go on to pursue accounting-related careers after their graduation.
In other words, there is a relatively high “leakage” of accountancy graduates to other sectors. This then raises the question: why are people trained in accountancy not joining the accountancy sector?
DPM Wong attributes this to several reasons.
One potential factor could be starting salaries not being attractive enough. As shared by DPM Wong, the starting salaries for accountancy graduates joining accounting firms today range from S$3,200 to S$3,800 — below the median starting salary of a university graduate, which is S$4,200.
Still, he acknowledges that salaries are determined by competitive market forces.
"I ask some of the accounting firms, and major accounting firms – why do you not pay more? They will then tell me, 'Ask the clients to pay me more'. In fact, all corporate Boards and Audit Committees must appreciate and understand that value that audit brings to the business, value in terms of instilling discipline, deterring fraud, or upholding good corporate governance.
"In fact, all Board directors must be prepared to pay reasonable fees for quality audits, rather than try to keep fees as low as possible.
"But in the end, the market will determine how much accountants are to be paid, based on the value they bring, and the price that customers are prepared to pay for their services."
As such, while salaries may be an issue, DPM Wong recognises the need to go beyond — it is important to think harder about the important roles that accountants play, both now and in the future, and come up with effective ways to develop and nurture a strong and healthy pipeline of accountancy professionals in Singapore.
To dive deeper into this matter, the Ministry of Finance (MOF) has set up the Accountancy Workforce Review Committee (AWRC), which is co-chaired by former Singapore Accountancy Commission Chairman, Chaly Mah and Second Permanent Secretary of the Ministry of Finance, Lai Wei Lin. The committee brings together key industry players and members of academia to look into the issues holistically.
DPM Wong shared several tips.
At a broad level, more people in business should be encouraged to have some basic accounting skills: "Virtually everyone in business ought to be able to read and understand financial statements – everyone can benefit from it. Some may wish to go further and specialise in accountancy, and we should encourage that."
It should not be assumed that only accountancy graduates can join the profession. With the right training, there is no reason why this should be so. For example, students of economics, finance, business management and other degrees can all benefit from some exposure in accountancy during their studies. Even after they enter the workplace, some may eventually decide to take up the professional qualification to become full-fledged accountants.
This would entail broadening the pathways to the profession. According to DPM Wong, one way to do this is to make the Singapore Chartered Accountant Qualification (or SCAQ) more accessible and open to everyone, to include people from different backgrounds. However, he clarifies that this would not impact the standards in any way: "The standards must remain high and cannot be compromised. But we can certainly make training courses and learning resources more easily available for non-accounting graduates to study and prepare for the exams themselves."
This could also potentially mean recognising the relevant coursework they have taken in school, as well as their relevant work experience in meeting the SCAQ’s requirements.
"Overall, I believe that having accountants with a wider variety of backgrounds and disciplines will enrich the profession and will better equip it to deal with the accelerating pace of change and transformation in our economy.
"So, I think that is one way we can do to widen the base of accounting skillsets. But on top of this, we should pay extra attention to nurture the next generation of accountancy talent. So, beyond a broad base, we need to build talent, and we need to pay extra attention to this."
Lead image / Shutterstock
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