The third leg of the City Harvest trial began this morning with prosecution witness Tiang Yii, an auditor from Baker Tilly, the church’s external audit firm, explaining to the court the different roles of the various members of a typical auditing team.
Tiang, who is an assurance partner of Baker Tilly TFW and who has more than 20 years’ audit experience in Singapore, including financial audit of multinational and local companies in diverse industries, also has experience in initial public offerings and due diligence projects.
In the examination in chief by deputy public prosecutor Mavis Chionh, Tiang explained that, in an audit, field work is led by an engagement partner and audit manager, and conducted by a team of seniors and associates. The risk management committee, which in this case included the managing partner of the firm, would only be consulted to assess any high risks faced by the client.
Tiang was the engagement partner for City Harvest Church from January 2006 to June 2007, and for Xtron Productions Pte Ltd for the financial year 2006/2007. Xtron, which managed the music career of CHC co-founder Sun Ho, is the company alleged by the prosecution to have sold sham bonds to CHC.
Tiang pointed out that as the engagement partner, she was responsible for the audit reports of her two clients CHC and Xtron. However, she also explained that in the audit process, there are “inherent limitations”, as the auditors would make their assessment on the financial health of an organization based on the information submitted by the clients. Tiang also added that auditors are “not business consultants” or legal advisers, and are not directly responsible for the actions of their clients.
To ensure the auditors understand the financial aspects of the organization accurately, a management representation letter, which contains the views of the client’s management, has to be prepared in conjunction with the auditing reports. Such a letter is usually drafted by the client using a Singapore Standards on Accounting template.
Another document explained in court was the Internal Control Memorandum. One of the key points brought up in court was the use of the church’s building fund. Tiang’s auditing team had initially included in its Internal Control Memorandum that it was necessary to state clearly that the building fund was also used to pay for the rental of Singapore Expo hall in addition to acquiring a property for the church, but that point was later removed by CHC. When questioned by DPP Chionh on the basis of Tiang’s consent for that, Tiang expounded that the client had already accepted the auditor’s recommendation and would be printing this explanation of building fund use on its donation collection envelopes.
The court session this morning also gave a glimpse of the many endeavors of the church. When asked by DPP Chionh whether Tiang was familiar with the term “Crossover Project”, which refers to the use of pop music to engage culture, Tiang said: “There are so many projects that the church is doing, I cannot remember all of them. I only read about (the Crossover Project) from the news reports (after the trial commenced)”.
Other issues raised in court included the declaration of related party transactions and bond subscriptions of CHC.
Bernard Lim, 46, a staff member of Clouds Of Praise Church, attended court this morning. He said: “I am praying for Pastor Tan (Ye Peng) and would like to show my concern as a fellow brother in Christ; and the best way to show concern is through action.” Lim graduated from CHC’s School of Theology.
Senior Pastor John Lee of CHC’s affiliate church City Harvest Church, Sydney, also came to show his support to the team. “I am here on behalf of my church,” he told City News. “I want to understand the things they are going through in court. I am very proud of them and am very touched to see CHC standing behind the leaders. This year is a new beginning for CHC. We pray that God will use this situation for His glory, and CHC and the body of Christ will become stronger.”
Court resumed at 2.30.