As the national accountancy regulator established under the Accountants Act 1967, MIA is committed to advocating for excellence in public financial management (PFM) and the professionalisation of accountancy talent in the public sector.
In 2020, MIA worked with the Confederation of Asian and Pacific Accountants (CAPA) to document its experience in supporting the public sector in Malaysia.
‘Case Study 2: Malaysia’ relates how MIA engaged with the Malaysian government to assist in introducing accrual accounting into the public sector and to strengthen the accounting cohort working in the public sector. The case study was carried out in collaboration with CAPA as the second instalment in CAPA’s Public Sector Case Study Series that seeks to support professional accountancy organisations (PAOs) in their engagement with the public sector. CAPA’s first case study focused on India.
CAPA’s earlier publication ‘Professional Accountancy Organisations – Engaging with the Public Sector’, aimed to identify the current extent and nature of the accountancy profession’s engagement with the public sector, and to encourage PAOs to consider increasing their level of engagement. This main publication provides suggestions to PAOs and other stakeholders on how they might respond to the seven key messages identified and the actions they can take to further engage with the public sector.
These seven messages are:
- Few professionally qualified accountants operate in the public sector.
- The public sector lags in the implementation of internationally recognised standards, especially in accounting.
- Consolidated accrual-based financial statements in the public sector remain rare.
- Strong political will is required to bring about improvements in PFM.
- Most professional accountancy organisations (PAOs) focus on the private sector, and engagement with the public sector is limited.
- PAOs in developing and emerging economies are uncertain about how to engage with the public sector.
- Global and regional accountancy bodies can help PAOs engage with government.
Meanwhile, Case Study 2 provides the key approaches as well as practical examples of how MIA successfully engaged with the public sector, the initiatives’ outcomes and the benefits derived from those initiatives.
MIA’s support was extended via two key approaches: One, providing technical assistance and supporting capacity building and two, advocating the value of strong PFM.
Further, MIA shares its top tips and success factors as guidance for other PAOs seeking to effectively engage with the public sector. These top tips include:
- Political buy-in is essential to drive the adoption of accrual accounting in the public sector.
- Position as a sparring partner or sounding board for the government, and provide technical know-how support, throughout the whole accrual accounting implementation journey.
- Advocate for PFM reforms which place finance and accountancy at the heart of public sector decision-making.
- Early and ongoing emphasis on the public sector to:
- assist to build capacity;
- provide support to those charged with PFM reform; and
- ensure national approaches are aligned with international standards.
Strategic Engagement Key to PAO Success
The case study notes that a key investment for MIA was the nomination of a member of MIA, who was a former Accountant General, to the International Public Sector Accounting Standards Board (IPSASB). Both the IPSASB member nominated by MIA and MIA staff with appropriate expertise were able to network with the IPSASB community – to learn from countries that have implemented IPSAS and enhance their technical expertise, which was then shared with the relevant stakeholders in Malaysia. Although the (IPSASB) term was only for three years, the benefits continued beyond.
MIA will continue to strongly advocate for the accountancy profession to play an integral role in supporting and improving public sector financial management, as part of its overarching nation-building agenda.
To access a copy of ‘Case Study 2: Malaysia’, click link to website.
To access a copy of the main publication ‘Professional Accountancy Organisations – Engaging with the Public Sector’ and ‘Case Study 1: India’, go to: Public Financial Management > PFM Publications