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The Contribution of the Malaysian Institute of Accountants (MIA) toward Accrual Accounting Implementation in Malaysia

October 24, 2018
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The Contribution of the Malaysian Institute of Accountants (MIA) toward Accrual Accounting Implementation in Malaysia

By The World Bank

The MIA was invited to participate in the Strategic Reform Initiatives (SRI) Lab organized by Performance Management & Delivery Unit (PEMANDU) in 2011, whereby a technical staff member participated in the lab for three months. This has contributed significantly to the Government’s move to accrual accounting. On the invitation from the AcGD, the MIA nominated a technical staff member to be a GASAC member to share insights on the application and implementation of accrual-based accounting standards. In the same year, the MIA nominated the former Accountant General as a member of the IPSASB of the International Federation of Accountants; he was subsequently selected by IFAC to serve on the board. The MIA believes that as MPSAS are adapted from IPSAS, it is crucial for Malaysia to be involved in the standard setting process of the IPSASB. This appointment provided a conduit for Malaysia to network and learn from countries currently implementing IPSASs such as the United Kingdom, Canada, Australia, New Zealand, Morocco, and Switzerland. Throughout the appointment, the MIA was able to raise implementation and interpretation issues as well as seek guidance on the implementation of IPSASB’s pronouncements.

The MIA also appointed its technical staff as technical advisors to the Malaysian IPSASB member.

Through the technical advisors, the MIA provided advice and assistance before, during, and after the IPSASB meetings, undertook research, and provided input to IPSASB staff on its current projects. In Malaysia, the private sector adopts the Malaysian Financial Reporting Standards (MFRS) which are identical to the IFRS Standards in all respects other than the nomenclature. In addition to sharing experiences in the standard setting process because the MIA has been involved in various meetings and initiatives with the national standard setter—the Malaysian Accounting Standards Board—the technical staff member provides accounting guidance to members on MFRS.

The MIA Council approved the establishment of the Public Sector Accounting Committee (PSAC) in March 2013.

The committee is chaired by the Accountant General. Membership comprises officers from the AcGD, audit firms, an accounting standard setter, an academician, and a statutory body. The committee has the following objectives:

a. To review exposure drafts and other consultative documents issued by the IPSASB and to submit comments thereon;

b. To provide input on certain current IPSASB projects when an MIA member is appointed as the IPSASB member; and

c. To contribute toward the implementation of accrual accounting in the public sector in Malaysia.

 

 

As more initiatives were undertaken, the MIA established a public sector accounting subunit under its technical division, Professional Standards and Practices Division.

One of the roles of the subunit is to provide secretarial and technical support to the PSAC, which includes the drafting of comment letters to the IPSASB, facilitating working group discussions on the IPSASB’s consultation documents, undertaking research on current IPSASB projects, as well as identifying public sector accounting related issues in Malaysia. The subunit also provides training and awareness, undertakes engagements with various government ministries and agencies on the IPSASB’s pronouncements, and produces articles and publication on public sector accounting.

The MIA is a leading accounting training provider in Malaysia.

As part of the MIA initiative in building capacity of accountants in the public sector, the MIA signed a MoU with the CIPFA in March 2015. The MoU will enable members of the MIA in the public sector to gain full membership of CIPFA. The MoU also creates a formal basis for cooperation and collaboration between the MIA and the CIPFA for the advancement of high-quality PFM in Malaysia. This will be achieved through joint activities in a number of areas, including advocacy for financial management reform and the provision of a range of training opportunities. The MIA has also signed a MoU with two other professional bodies, as recognized in Part II of First Schedule of the Accountants Act 1967 to facilitate its members to gain professional accounting qualifications. The MIA offers other training to the public sector such as seminars and workshops on IPSAS, mini public sector conferences, a pre-MIA conference event, as well as featuring a public sector session in its annual flagship event, the MIA International Conference.

The AcGD recognizes that accountants in the public sector should progress to be business partners, rather than remain as mere record keepers.

As Malaysia continues further with implementation of accrual accounting, the MIA must play a bigger role on the PFM space. The MIA Council recently approved the PSAC to define and promote the roles of accountants in the PFM. As the role of accountants in the public sector will change significantly following the adoption of accrual accounting, the MIA will ensure that it provides relevant value proposition to its public sector members.

This article was extracted from the World Bank report entitled “Public Private Partnerships on Public Financial Management Reforms in Asia” which was first published in May 2017. The complete report can be obtained from http://documents. worldbank.org/curated/en/ 190271494602597931/Public- Private-Partnerships-on- public-financial-management-reforms- in-Asia-opportunities-and- lessons

 

 

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