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Trust and Sustainability in a Digital Economy

December 6, 2019
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Trust and Sustainability in a Digital Economy

The recent Malaysian International Accountants Conference (MIAC) 2019 organised by the Malaysian Institute of Accountants drew a record 3,300 delegates, firmly entrenching the event as the largest gathering of accountants ever in the country.

But size wasn’t the only milestone. The MIAC 2019 put pressing issues such as climate change front and centre, while exhorting the profession to pursue digital transformation and champion good governance to nurture sustainable growth and inspire public trust. The following are some key messages from the MIAC 2019:

Boosting Malaysia’s Digital Economy. The digital economy has grown tremendously. In its first-ever Digital Economy Report 2019, the UN Conference on Trade and Development (UNCTAD) estimated that the size of the world digital economy ranged from 4.5 to 15.5 per cent of world GDP.

Although China and the United States are dominating the digital economy with an almost 40% share of global value added in the information and communications technology (ICT) sector, UNCTAD noted that in terms of share of GDP, the digital economy sector is the largest in Taiwan Province of China, Ireland and Malaysia. “This is evidence that Malaysia’s policies and initiatives to strengthen the digital economy are bearing fruit,” said MIA CEO Dr. Nurmazilah in her opening remarks at the MIAC 2019.

In his keynote address at the MIAC 2019, YB Senator Dr. Radzi Jidin, Deputy Minister of Economic Affairs urged accountants to embrace digital skills and digital literacy. “As accounting services are one of the core professional services to be focused on in the 12th Malaysia Plan 2021-2025, the profession will play a tremendous role in driving and supporting the development of the digital economy,” he said, adding that the nation was counting on a digital boost. Contributions from digital services and products were valued at 18.5% of GDP in 2018, according to the Department of Statistics Malaysia. According to Bank Negara’s Annual Report 2017, digital transformation could provide a boost of between USD100 – 136 billion to the country’s GDP by 2025.

Take a Strong Stance on Climate Change and Sustainability. The International Federation of Accountants (IFAC) as the global voice of the profession strongly supports the Paris Agreement, which provides a clear framework for international action for the reduction of greenhouse gas (GHG) emissions and calls for increased investment and innovation in climate action to curb GHGs and keep global warming below the critical 2 degrees Celsius threshold.

MIA as an IFAC member organisation will align its initiatives with IFAC in order to support the transition to a low-carbon society and combat climate change. Dr. Nurmazilah urged accountants to drive better accountability and disclosure that can change organisational behaviour to become more sustainable. “In a nutshell, accountants can fight climate change by doing what we do best: assessing and monitoring, measuring and disclosing, communicating this information to influence better decisions and actions, and reporting and providing assurance for public trust.”

MIA’s advocacy for Integrated Reporting (IR) as a game changer in communications and building trust will be pivotal in improving disclosure that informs investor and business decisions affecting climate change.

Strengthening Trust in the Profession. “Trust is a valuable asset for all institutions and organisations, and ongoing trust-building activities should be one of the most important strategic priorities for every organisation. Trust is one of the key ingredients of success in the digital economy,” said Dr. Nurmazilah.
According to the 19th Annual Edelman Trust Barometer Global Report published in 2019, the Malaysian government is currently at a “trusted” level, achieving a score of 60 points compared to “distrusted” with just 46 points last year – an increase of 14 points. The global trust average is at 47 points.

To further improve competency, accountability and trust, it is important that public institutions provide accurate and complete financial and non-financial information. “By utilising our expertise in stewardship and reporting to strengthen transparency and accountability, accountants can help to rebuild good governance and hence strengthen trust in public institutions to bridge the trust deficit,” she concluded.