committee to strengthen the accountancy profession (csap)...• the establishment of the committee...
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Committee to Strengthen the Accountancy Profession (CSAP)
Key issues and recommendations26 August 2015
• The World Bank issued the Report on the Observance of Standards and Codes – Accounting and Auditing in 2012
• The establishment of the Committee to Strengthen the Accountancy Profession (CSAP) in relation to the ROSC AA findings was approved by the MOF
• The members of the CSAP are:
– SC (Chairman of the CSAP)
– MOF
– BNM
– SSM
– Accountant General Office
– MIA 2
Background
Source: Diagram from IFAC 2012 Annual Report, Transparency and Accountability : Past, Present and Future
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CSAP’s Approach
How would the accountancyprofession servesthe future needsof our economy?• ETP, GTP• CMP2• Financial Sector
Blueprint• SME Masterplan
How should the profession be regulated?• Governance of
MIA• Licensing• Other regulatory
reform
How wouldaccountancyeducation supportsthe developmentof the accountancyprofession?• Framework• Competency
Expectations• Roles and
responsibilities
The overriding aim of CSAP was to ensure the accountancy profession serves national interests through performance and maintenance of professional standards and values
The Present Accountancy supply chain in Malaysia
Institutions of higher learning
Entry level programmes offered by professional accountancy
bodies
Malaysian Institute of Accountants
Professional accountancy bodies
Private sectorAccountancy
practicesPublic sector
Required working experience period
Professional accountancy programmes
Competency assessments
Employers and approved training providers provide work experience and mentoring to
accountancy graduates
Ensures baseline competencies are attained before admission to membership
Employers provide regular feedback to ensure baseline competencies remains
relevant to employers
MIA sets ethical standards and regulates the conducts of members
Admitted based on Part 1 of the First Schedule of the Accountants Act
Admitted based on Part 2 of the First Schedule of the Accountants Act
Demand and Change drivers
CapitalMarket
Masterplan2
EconomicTransformation
Plan
FinancialSector
Blueprint
GovernmentTransformation
Plan
SMEMasterplan
External factors
* Other than Malaysia, countries which recognise graduates without further assessment are Bahrain, Ivory Coast, Dominican Republic, Malta and Swaziland
Distribution of MIA membership – 30 June 2014
N=36,000
Demand model for accountants required in Malaysia by 2020
2014
2020
• Baseline distribution across economic sectors• Sectorial growth rates and demand• Specific sectorial demand for accountants• Complexity and sophistication of businesses
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36,000
60,000
2.0 3.0 4.02.5 3.5
Minimum requirement forBig-4, GLCs, Multinationalsand large corporations whohave the resources to train professional accountants
Cut-off point where graduatesmay not be successful in pursuingprofessional accountancy
2.7-2.8
CGPA
Annual number of graduates: 5,000
Students with no interest to pursue career in accountancy
Distribution of students’ performance and it’s relation to professional accountancy enrolment
Issues in nurturing more professional accountants in Malaysia
Increasing the talent pool
• Number of graduates• Interest to be professionals• Competency gap• High hurdle for non-
accountancy graduates
Professionalaccountancy bodies
Professional accountancy programmes
Competency assessments
Employers and approved training providers provide work experience and
mentoring to accountancy graduates
Ensures baseline competencies are attained before admission to
membership
Inclusivity of professional accountancy programmes• Cost charged relative to the salary of graduates• Availability of the training providers across Malaysia• Availability of competent trainers
Support for professional accountancy programmes• Limited number of employers recognised by professional bodies• Quality of mentoring and supervision and values imparted• Not all employers support employees to gain professional recognition
Accountancy practices
Private sector Public sector
Standards and recognition
• Compliance with international education standards
• Different recognition accorded by employers
Professional accountants in key leadership and management roles
What key employers want to see in Professional Accountants
What Employers
Want?
Strong written and spoken communication
skills
Possess soft skills such as management,
problem solving ability, technology savvy
With practical and market relevant
knowledge
Broad skills, not limited to finance and business
only
Qualified as professional accountants
Employers’ views on adequacy and quality of accountants
N=189
Students interests in pursuing professional accountancy qualification
N=477
Reasons for graduates not pursuing professional accountancy qualification
N=496
The present regulatory framework and MIA governance arrangements
Minister of Finance
Accountant General Office
Members in general meeting
MIA Council
Membership and Education• Determine membership
qualification • Involve in regional and
international activities• Provide membership
services• Provide education and
training• Oversee Qualifying Exam
Appoints 20 MIACouncil membersElects 10 MIA
Council members
Advises Minister ofFinance on MIA Councilmembers appointment andsupervises MIA
Professional standards• Set auditing standards• Set ethical standards• Set practising rules and
issue practisingcertificate
• Deals with technicalmatters in accounting, auditing , ethicalstandards and market related matters
Investigation and DisciplinaryCommittees and DisciplinaryAppeal Board• Conduct investigation and
disciplinary proceedings• Hear appeals from members
Enforcement• Conduct practice review• Review financial statements• Assess compliance with
continuing professionaleducation requirements
Members of committees and board aremembers of MIA Council
Malaysian Accountancy Research and Education
Foundation
MIA Councilappoints the Trustees of MAREF
Aims of the recommendations• Resetting the accountancy profession by introducing a new
regulatory structure which will strategise and lead the accountancy profession and ensuring professional standards are observed;
• Meeting the demand for the economy to be supplied with adequate number of professional accountants who meet the market expectations in terms of knowledge, skills and values;
• Strengthening the accountancy education sector in meeting the above objectives as well as capturing the opportunities to position Malaysia as the hub for accountancy education and training for this region;
Aims of the recommendations
• Ensuring public interests are protected through a more effective and efficient disciplinary structure;
• Reinforcing the competitive edge of Malaysia through the development of specialised competencies and skills such as in the areas of Islamic Finance;
• Strengthening the Small and Medium Practices so that that could be able to provided relevant support and services to the Small and Medium Enterprises which are important for the economic growth for Malaysia, moving forward;
Aims of the recommendations• Ensuring a financial mechanism to support education,
research and capacity building of the accountancy profession is available;
• Making the accountancy profession an inclusive profession by building adequate infrastructures for education and training to enable Malaysians who wish to pursue the professional accountancy profession would be able to do so; and
• Accountants are provided with support to ensure they are able to provided services at the quality expected out of them and their competency and skills could be enhanced based on the needs of the market.
Reset of the accountancy sector in Malaysia
CorporationsFinancial markets
Small Medium Enterprises
Public SectorExternal Markets
Recommendation 2Align professional
designation with global standards
Recommendation 3Professional
programmes available widely
Recommendation 4Increase number of
ATOs
Recommendation 5Pathways for Non-
Accountants
Recommendation 7Accountancy as the Profession of Choice
Recommendation 8Establish Centre of
Excellence
Recommendation 9Encourage Cross
Fertilisation Programmes
Recommendation 10Review Lecturers’
Reward and Promotion structures
Recommendation 11Malaysia as Hub of
Accountancy Education
Recommendation 12Strengthen Post-
Qualification Education
Recommendation 13Nurture SMPs to serve
SMEs
Recommendation 14 Capture sectoral
opportunities
Recommendation 15Make accountancy
inclusive
Recommendation 1 New regulatory bodywith adequate power
Recommendation 6Strengthen MAREF
Revised Governance Structure of the Malaysian accountancy profession
Professional Conducts Board Standards Board Education Board
Management team of the new regulatory body
Recognised professional accountancy bodies
Recognised universities offering relevant accountancy degrees
Supervisory board
Malaysian Institute of
Accountants
Registered accountants