Changes in the offing for the accounting fraternity

PETALING JAYA: The piece of legislation that principally governs the Malaysian accounting profession has been virtually untouched for over a decade. That may change by year-end, now that the Malaysian Institute of Accountants (MIA) has submitted to the Government a draft of proposed amendments to the Accountants Act 1967.

Areas that will be affected are the institute's disciplinary procedures, its screening of potential members, and its council's rule-making capacity.

The Act was last altered significantly in 2001. This time, the proposed amendments are to tie in with the Economic Transformation Programme (ETP).

The ETP Roadmap identifies the accounting sector as a business opportunity within the business services national key economic area (NKEA).

In a press release issued on April 3, MIA president Datuk Mohamed Nasir Ahmad said: “Since the country is being helmed by a reform-minded leadership bent on achieving the goals of the ETP, we must ensure that the present legislative framework of the accountancy profession is further enhanced to be consistent with the changing capital market landscape.”

This had led the institute to formulate the proposed amendments, which were handed over to the Government early this year. The aim is for the Bill to be tabled in Parliament before year-end, but it must first get the green light from the Accountant-General, Finance Ministry and Attorney-General's Chambers.

The press release does not provide details of the amendments.

Mohamed Nasir told StarBiz that the changes centred on three aspects, the first being the composition of the three committees the Investigation Committee, Disciplinary Committee and Disciplinary Appeal Board that act upon complaints against MIA members.

Under the Act currently, each of these committees has five members, who must all be drawn from the MIA council. The total of 15 committee members account for half of the council's strength. The council members are generally senior people in their respective fields and therefore have limited time for MIA matters.

As a result, the institute has a backlog of disciplinary cases. Also, Nasir pointed out that because the committee members were all from the council, it was hard to fight the perception that the committees lacked independence and transparency.

The MIA's solution is to propose that the Act be amended so that there can be more than one of each committee, and that the committee members can be ordinary MIA members “of good standing” or even non-accountants.

The second element that the institute wants to insert into the Act is the requirement for a competency assessment before deciding whether a person can be admitted as an MIA member.

“This move will help address the questions about the competence of accountants today,” Nasir added.

“We're still deliberating on the form of competency assessment we will undertake. We're not inclined to ask the candidates to sit for another exam. Instead, we're considering conducting workshops or seminars that focus on ethics and governance, for example. We think some form of interaction with the candidates is important. But we're weighing various options.”

The MIA is also proposing that its council be given the authority to make or amend certain rules, instead of having to wait for a general meeting to approve new rules.