SINGAPORE SOCIETY OF ACCOUNTANTS BILL

Order for Second Reading read.

3.45 p.m.

The Minister for Finance (Dr Goh Keng Swee): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, you will recall that this Bill was first introduced in the Third Session of this Assembly and was referred to Select Committee by a resolution of the Assembly on 27th June, 1962. The Select Committee considered representations received and recommended a number of amendments to the Bill. These amendments are all incorporated in the Bill now before the House.

I do not propose to take up the valuable time of hon. Members by explaining at length the principle behind this legislation. The details of the Bill are fully explained in the Explanatory Statement attached to the Bill.

Very briefly, it seeks to provide a statutory body to register and regulate the conduct of all accountants in Singapore - those in practice as well as those in employment. Registration is necessary in order to protect the public from untrained and inexperienced, persons. A controlling body representative of the accountancy profession is required to maintain the standards of accounting skill and the integrity of the profession.

I will now refer to the recommendations of the Select Committee which, are incorporated in the Bill. Much anxious thought was given to the matter of unqualified accountants who are now in public practice. The Bill in' its original form would have put au of them out of business. It is, however, not the intention of the Bill to deprive any person of his livelihood. So the Select Committee reached a reasonable solution in the initial stage of legislation, which is to bring such unqualified persons into the ambit of the Bill. The most suitable nomenclature to adopt for these persons is "licensed accountants". Some people are unhappy over this name which has been taken after much thought and without any intention of being derogatory to anybody. It is thus provided in clause 6 for these accountants who were in the public service on 27th April, 1962, to be once and for all registered as, licensed accountants to enable them to carry on any practice in which they were engaged before this legislation takes effect.

Further, provision is made for licensed accountants to be promoted to public accountants - i.e. fully qualified accountants - if they are examined by the Council of the Society and found to be fit for registration as such.

The original provisions of the Bill do not allow the rules of the First Council to be discussed by the Assembly. Since these are of fundamental importance and affect the interest of the profession, it appears desirable that the rules made by the First Council should not come into force until they are presented, debated and approved by the Assembly. It is now provided in clause 12 that such rules made by the First Council on matters like qualifications for persons to be admitted members, the manner of admission, fees payable and other matters should come to the Assembly for approval.

In order to remove any doubts in the minds of some accountants that they may have to go through a lengthy and perhaps tiresome process of application for registration as a public accountant, clause 24 (5) provides that those who are now authorised under the Companies Ordinance as auditors generally will automatically be registered as public accountants.

Sir, I beg to move.

Question proposed.

Tun Lim Yew Hock (Cairnhill): Mr Speaker, Sir, I rise to support this Bill.

Sir, owing to the curtailment of time on the Budget debate, I had not much time to give a close study to this Bill, but I have done so since last night and have found that there are one or two clauses here that may require amendment. I am already out of time in so far as notice is concerned, but when the Bill is in Committee, I shall try to explain to the Minister where I think an amendment is necessary, and if that is accepted, I will seek the assent of this House for such an amendment to be moved.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole Assembly.

Assembly immediately resolved itself into a Committee on the Bill. -[Dr Goh Keng Swee.]

Bill considered in Committee.

3.52 p.m.

[Mr Speaker in the Chair]

The Chairman: Will the Member for Cairnhill indicate the clauses on which he wishes to speak?

Tun Lim Yew Hock: Clauses 1 and 12; clause 17 for information and clarification and clause 24 for some explanation.

The Chairman: On clause 1, does the hon. Member wish to move an amendment?

Tun Lim Yew Hock: I would like to explain and see whether my explanation is accepted by the Government.

The Chairman: The procedural difficulty is this. Once I call clause 1, that is the time amendments should be proposed. Even if the amendments are withdrawn, it does not matter. An amendment, when proposed, enables the House to debate the suggested amendment. If I propose that the clause stand part of the Bill, then it is too late to make any amendment.

Tun Lim Yew Hock: I see the difficulty. But I would perhaps ask you to appreciate my difficulty. As I am not a legal man, I might have some difficulty in phrasing the amendment, but if I were to give it in a rough form, perhaps it could be done.

Clause 1 -

The Chairman: Clause 1 then - amendment to be proposed?

Tun Lim Yew Hock: What I want to point out under clause 1 and try to show that an amendment is necessary is the appointed day. According to clause 1 the appointed day is to be fixed by the Minister. This Bill is in several Parts - Part I up to Part V. If the appointed day is to refer to all the Parts, therefore, Part V will come into operation, and no person, unless he is registered under the Ordinance, can practise as a public accountant. But if no appointed day is given, it is fixed. Until the legislation is completed, the Society and the Council cannot legally function.

So I do submit that an amendment is necessary here to the extent that certain Parts of the Ordinance shall come into force on such days as the Minister may by notification in the Gazette appoint.

What I want to point out is that Parts II to IV can come into operation immediately, but Part V will have to wait until the Society has functioned for some time and until all the registrable accountants have been duly registered, otherwise no accountant can operate in Singapore.

The Chairman: The Member for Cairnhill then seeks leave to move an amendment perhaps at the end of clause 1 to add:

`The Minister may appoint different days for the coming into operation of different Parts or clauses of this Ordinance.'?

Tun Lim Yew Hock: That is correct. May I elucidate?

The Chairman: Is it the pleasure of hon. Members that the amendment be moved?

Dr Goh Keng Swee: No, Sir.

The Chairman: No. There is an objection to the amendment being moved to start off with. There is an objection?

Dr Goh Keng Swee: Yes.

The Chairman: The amendment cannot be moved.

Question proposed, "That clause 1 stand part of the Bill."

Tun Lim Yew Hock: Can I not ask for an explanation on clause 1?

The Chairman: Yes, on the clause itself.

Tun Lim Yew Hock: Can the Minister please explain, in the light of clause 37 which says:

`After the appointed day a person who is not registered as a public accountant under this Ordinance .shall not practise ...'.

So once the appointed day is fixed- and it has to be fixed for the law to come into operation for the Society to exist and for the members of the Council to be appointed by the Minister-all the accountants will not be allowed to practise legally. It will be an offence under clause 37 of this law.

Dr Goh Keng Swee: Sir, I do not think there is any difficulty about this at all, because all the known accountants, that is, the qualified accountants, are listed in the Companies Ordinance and action has been taken through the various departments to get the unqualified accountants. In so far as the unqualified accountants are concerned, of course, some time may elapse before they are brought within the ambit of this law. But for the public accountants, there should not be any difficulty at all.

Mr Byrne: The point is this, Mr Speaker. Sir. There must be an appointed day for bringing the Ordinance into force:

`After the appointed day a person who is not registered as a public accountant under this Ordinance shall not practise as a public accountant, auditor or tao consultant;'.

You have got to bring the Ordinance into force as from an appointed day, and after that appointed day, if one is not registered as a public accountant, then one cannot practise as an accountant.

Tun Lim Yew Hock: That is quite true, but when is the appointed day? The appointed day will have to be brought in immediately for Part IV, otherwise the Society cannot legally function. The Minister will have no power to appoint members to the Council.

Mr Byrne: Mr Speaker, Sir, if I may make a very simple point? All Ordinances are brought into force on the day they receive the assent of the Yang di-Pertuan Negara, if there is no other appointed day. Where an Ordinance does not have a specific provision providing for a day on which it is to be brought into operation, the Ordinance comes into force from the day that it receives the assent of the Yang di-Pertuan Negara. That is one thing - the day on which the Ordinance is brought into force. Now registration can take place before that or after that, but the registration is effective only after the day when the Ordinance is brought into force.

Question put, and agreed to.

Clause 1 ordered to stand part of the Bill.

Clauses 2 to 11 inclusive ordered to stand part of the Bill.

4.00 p.m.

Clause 12 -

Tun Lim Yew Hock: Sir, I have to seek your indulgence again. I would not know how to move an amendment unless I know the point of view that I want to present to this House is accepted.

Under clause 12, it means that under clause 9 when this law comes into operation, the Minister has the power to appoint members to the Council which shall run the Society in accordance with the law. Then under clause 8, there are certain powers given to the Society for the framing of rules. Under clause 12, the Council shall only have certain powers, but not all the powers. The Council under clause 12 shall, notwithstanding the provisions of clause 8 of this Bill, frame rules in respect of certain paragraphs - (b), (d), (e), (h) and (i). But there are other paragraphs which have been left out but which are necessary if the Society is to really function. Why do we restrict the powers of this Council then if we mean that the Society should operate effectively from the very word "go"? In sub-clause (2) of clause 12, the rules made thereunder must seek the approval of the Assembly. This is contradictory to sub-clause (2) of clause 8.

The Chairman: Order. If the hon. Member wishes to raise those points by way of an amendment, he must indicate what the amendment is. Otherwise I will propose the Question. The Question is, "That clause 12 stand part of the Bill." This refers to the first Council of the Society.

Mr Byrne: Sir, there are certain rules which must be approved by the Legislative Assembly. They can make other rules. But it is not required that there should be an Assembly approval with regard to the other rules that they make.

Question put, and agreed to.

Clause 12 ordered to stand part of the Bill.

Clauses 13 to 16 inclusive ordered to stand part of the Bill.

Clause 17 -

The Chairman: Is the Member for Cairnhill moving an amendment?

Tun Lim Yew Hock: No.

Clause 17 ordered to stand part of the Bill.

Clauses 18 to 23 inclusive ordered to stand part of the Bill.

Clause 24 -

The Chairman: Is there an amendment?

Tun Lim Yew Hock: No, Sir.

Question proposed, "That clause 24 stand part of the Bill."

Tun Lim Yew Hock: Under clause 24, no person shall be registered by the Council as a member of the Society if he is not of good character or reputation. I find it difficult to appreciate how character and good reputation can be assessed. If he is not registered, he cannot practise. Whereas under clause 30, sub-clause (2) , where a man is already a member, if he is found to be of not good character or reputation, he can be suspended. But then he has a right of appeal even to the Court. But here a man, before he becomes a member, can just be knocked out on the ground that he is not of good character or reputation, and there is no redress. Perhaps the Minister can explain that there is some redress.

Mr Byrne: It must be left to the good sense of the Council to see that admissions to the Society are made in a proper manner, it is usual to provide that people who have previous convictions for dishonesty are not admitted to the rolls of a Society like this.

Tun Lim Yew Hock: I agree, Sir. What I want to point out is that in the case of a member who is suspended on the same ground, he has redress. But for a man who wants to be a member, if he is knocked out on that ground, he has no redress, and then he cannot practise in spite of all the qualifications he has got. There must be some way of getting some redress.

Dr Goh Keng Swee: The reason why it is required that the first Constitution of the Society be approved by this Assembly, `that is to say, the rules made under clause 8 of the Bill - you will note that under clause 8 (1) (b), rules may be made governing the admission of members. I would suggest that it may be possible to insert that the Assembly should see that any possible safeguard could be introduced when the Council itself breaks the rules. So far as the general provisions of the Bill are concerned, it is obviously necessary that before accountants are registered, they should satisfy the registration body, namely, the Council, that he is of good character and reputation.

The Chairman: May I also inform hon. Members that that particular clause appeared in the original Bill which went to Select Committee in June 1962 and I chaired the Select Committee? I do not think there was any objection raised to that particular clause, was there?

Some hon. Members: No.

The Chairman: We had accountants before us who gave evidence.

Mr Byrne: Anyway, the Legislative Assembly will be able to scrutinise the rules providing for admission to the Society.

Question put, and agreed to.

Clause 24 ordered to stand part of the Bill.

Clauses 25 to 50 inclusive ordered to stand part of the Bill.

The Chairman: There are certain amendments to be made to marginal titles of clauses 36, 37, 38 and 39. They will be done as a matter of course.

Bill reported, without amendment; read a Third time and passed.