Accountants group calls for better governance structure

Written by Anuja Ravendran

Thursday, 13 September 2012 10:13 -

A group of accountants are calling for an enhanced governance structure for the Malaysian
Institute of Accountants (MIA), including a call to recognise that it is not a regulatory body and to
revamp its council which, at present, is overwhelmed by government appointees.
These members feel that MIA, a statutory body established under the Accountants Act 1967 to
regulate and develop the accountancy profession in Malaysia, is veering away from its
self-regulation mandate when there already are regulatory entities like Securities Commission
and Audit Oversight Board (AOB) responsible for ensuring that public interest is protected.
Some of the resolutions that the group intends to propose at MIAs upcoming annual general
meeting (AGM) on Sept 29 are to include a declaration that it was a professional accountants
body and not a regulator, an accountant representing the group proposing the resolutions told
The Malaysian Reserve.
Another proposal concerns the amendment to the Accountants Act 1967 to enable the MIA
council to comprise a majority of elected members as opposed to the current majority of 20
government appointed members and 10 elected members.
The call came on the heels of a hard hitting World Banks report on the observance of standards
and codes (ROSC) for accounting and auditing in Malaysia released in February that said MIA
needed to undertake an independent review of its governance structure in order for it to be able
to fully deliver on its mandate.
This review should address the structure and membership of the council, the practice review
process, the application of investigation and disciplinary processes, membership admission
processes, the assessment of quality standards for university accounting degree programmes
as well as the monitoring and enforcement of those standards and the level of resources
required to enable MIA to effectively deliver its full mandate, the report said.
A spokesperson for the group of accountants, ready to push for changes in the MIA, said that its
current stance to be regulator of it own members whose membership fees are a source of
funding for the institution is a contradiction of its functions.
The supervisory and disciplinary function of MIA merely reinforces their services for members
and represent self-regulating functions universally practised by all other accounting bodies
around the world, he added.
If it takes on the stance of a regulator, essentially there is no element of self-regulation which is
what was intended for the profession, he said.
The matter is further complicated by the council's composition.
Presently, it comprises 20 government appointed members and only 10 members elected by
fellow members, he said.

1/3

Accountants group calls for better governance structure

Written by Anuja Ravendran
Thursday, 13 September 2012 10:13 -

If self-regulation is the goal, there is an imbalance in the composition of the council as under a
self-regulatory regime, there should be more elected representatives than government
appointees, he added.
While there is certainly a place for government appointed council members as well as heads of
professional accountancy bodies in the council, the present structure is incongruent for a body
that is run on membership subscriptions, he said.
There needs to be a more democratic spirit in the way council members are elected so that
there is a stronger sense of ownership of charting the direction for the profession, he said.
He said that under the current structure, there are policies that have or are being implemented
that may not bode well for the development of the profession, for example the challenging
processes involved in securing audit licences and deciding on the qualification for admission of
members which will affect the quality of accountants in the country.
The council is also seeking the responsibility of increasing membership fees without having to
go to the AGM to get members approval which is not right, he added.
Furthermore, as a member of the International Federation of Accountants (IFAC) which is the
global body representing the interest of accountants, it is clear that MIA must be a professional
members body, he said.
Other resolutions being proposed by the group in a bid to enhance the MIA council governance
are:
- i) a call for any amendments to the Accountants Act 1967 to be made after approval by
members at a general meeting;
- ii) a call for all elected and appointed members of council to retire at the AGM, which is
presently not the case, in a bid
- to ensure continuity and accountability;
- iii) a restriction for each member to carry only one proxy at any general meeting; and
- iv) that the Accountant General be responsible for any legislative changes required to
effect the various resolutions made.

In enhancing its function as a professional body for members, the group is also proposing that
MIA take the lead in deciding the audit licence approvals and renewals processes which
currently also involves other government departments including the Ministry of Finance, the
Companies Commission of Malaysia and the Securities Commission, among others, he said.
The group has also called for the establishment of a technical resource centre that is able to
meet with the needs of members, he said.

2/3

Accountants group calls for better governance structure

Written by Anuja Ravendran
Thursday, 13 September 2012 10:13 -

In Malaysia, the use of the word accountant is regulated under the Accountants Act 1967, and
anyone who wishes to carry the title would have to register as a member of MIA.
They would have to meet its admission requirements which include academic and working
experience as well as pay a fee of RM500 for admission (payable once at the point of
admission) and a yearly subscription fee of RM250.

3/3