TALK of a shortage of accountants in the country is rife, with practitioners citing mounting regulatory pressures as a major pain point for accounting professionals, in addition to recruitment issues and talent importation exacerbating the dilemma. After all this time, accounting and auditing jobs continue to be perceived as underpaying, undervalued and less dynamic than positions in tech, investment banking and private equity.

Although Putrajaya in its Economic Transformation Programme in 2010 said it targeted to produce 60,000 accountants in the country by 2020, this was not achieved, with subsequent data from the Malaysian Institute of Accountants (MIA) showing that there were “more than 38,500 members in its registry as of June 2023”.

And while the MIA, a regulator and developer of the profession in Malaysia, says its total membership growth for the last six years, averaging 2.5% per annum, has been steady, Malaysia’s accountant-population ratio is inferior compared with other countries.

According to a 2015 report by the Ministry of Finance’s multi-agency panel Committee to Strengthen the Accountancy Profession (CSAP) referencing 2014 data, Australia has an accountant-per-population ratio of 1:119, Singapore 1:184, New Zealand 1:136 and Hong Kong, 1:195.

“With 38,500 members [as per the MIA’s registry] serving Malaysia’s population of about 33.2 million, that means each accountant is serving approximately 874 people, giving us an accountant-population ratio of 1:871. [Malaysia is still behind, but nevertheless, that’s a] significant improvement from 1:1,342 in 2003,” MIA president Datuk Bazlan Osman tells The Edge.

“[I believe] the government’s target of 60,000 accountancy professionals can be achieved in 2030 upon the repeal of the Accountants Act 1967 and full enforcement of the three membership levels (accounting technician, accountant and chartered accountant) based on the MIA competency framework. [Removing the focus from only one professional title] will increase the number of accountancy professionals in the country,” Bazlan says.

Challenging regulatory landscape

In response to high-profile corporate accounting scandals, regulatory bodies around the world have enhanced their financial reporting standards.

“For example, the International Financial Reporting Standards (IFRS), which are adopted in Malaysia, require accountants to comply with more rigorous reporting requirements. Adapting to these complex standards and ensuring compliance may be challenging and time-consuming for accountants, but they provide better reporting alignment and governance,” Bazlan explains.

In addition, there are also increased regulatory oversight and penalties, where regulatory bodies such as the Securities Commission Malaysia (SC), Bursa Malaysia and the Companies Commission of Malaysia (SSM) have intensified their scrutiny of corporate reporting practices.

Take, for example, the SC’s introduction of updated corporate governance practices (through the Malaysian Code on Corporate Governance [MCCG] 2021) to improve accountability and transparency within organisations in line with global expectations; and evolving taxation regulations within Malaysia and globally to address emerging issues such as transfer pricing changes, global minimum tax rules and sealing loopholes.

“Over-regulation has been driving talents away from the profession. This perception of riskiness and unattractiveness hinders the influx of new talent, further dampening the talent pipeline,” says an auditor who declines to be named. “People used to gain experience at accounting firms for at least three to four years before leaving for the commerce or finance industry. But these days, talents leave within a year.”

In addition, the frequency of tax regulation changes, Bazlan notes, can make it challenging for accountants to navigate such changes effectively.

Needless to say, accountants’ need to stay informed about the changing regulatory landscape, invest in continuous professional development, and dedicate significant time and effort to ensure compliance pile on the responsibilities.

Then, there are also the severe consequences of non-compliance, including reputational damage, legal penalties and professional sanctions, remarks Bazlan.

“With Malaysia’s accountancy talents being sought by neighbouring countries such as Singapore and Australia, and even in Europe, the talent crunch has been exacerbating the situation as a talent exodus can weaken compliance,” he adds.

Both Bazlan and the Institute of Chartered Accountants in England and Wales (ICAEW) Malaysia emphasise that regulations should not be viewed as problems, but as constantly evolving guidelines and opportunities to protect public interest, shareholders and stakeholders.

ICAEW Malaysia says that digital adoption in accounting processes, which have been said to push accountants to adapt to even more changes, actually allows accountants more time to analyse data and create decision-support capabilities.

Delay in student recruitment pipelines, employee attrition and talent importation

ICAEW Malaysia explains that during the pandemic, lockdowns, remote working arrangements and economic uncertainty slowed down the recruitment of new accounting professionals, which has in turn disrupted the supply chain of both qualified and trainee accountants. And while student intakes for both accounting degrees and diplomas have been strong, to the point that demand outstrips the number of seats available at tertiary level institutions, many graduates have ventured into different fields of work including online entrepreneurship.

“[That there have been leakages] where accountancy graduates pursue different career pathways, such as online entrepreneurship instead of continuing within the profession, has had MIA looking to strengthen talent retention. But this requires a concerted effort from all parties concerned — academia, corporates, public practice and the public sector,” Bazlan stresses.

ICAEW Malaysia adds that promotional initiatives that support the development and growth of future accountants, such as online learning programmes, virtual internships and flexible training arrangements, can help mitigate the impact of the recruitment pipeline delay.

Where talent importation between countries is concerned, ICAEW Malaysia has observed increased mobility of Malaysian ICAEW members to Singapore and returning members to Malaysia, with proximity and economic ties between both countries facilitating the movement. Globally, the importation of accountancy talents is also seen in the US, Canada, Australia and the UK.

“Focusing purely on the accounting factors, typically, more developed economies have increased demand for accounting services due to growth, changing regulatory requirements and evolving business practices, and are thus forced to seek [skilled] talents internationally [at expected cost and quality].

“Moreover, the evolving business landscape has given rise to new job opportunities; for example, in the field of sustainability. As demand continues to grow, accountants can readily adapt to these emerging roles and leverage their existing skill sets to drive sustainable practices and outcomes. Their ability to navigate financial data, assess risk and provide strategic insights position them well to contribute to the sustainability agenda and play a vital role in shaping a more sustainable business environment,” says ICAEW Malaysia.

(Re)courting talents

Bazlan explains that the accounting profession has seen many changes over the years with various initiatives implemented by industry players to court talents.

These efforts include flexible working arrangements adopted by firms and corporates, as well as increased starting salaries and better perks at corporates and public practice firms.

Efforts by the MIA include recognition awards and sponsorship programmes for deserving students (recognised via MIA’s National Accounting Student Excellence Award scheme under which students can pursue professional qualifications within accountancy upon graduation).

“This is in addition to the continuous support by public practice firms by providing tuition and examination fees, tuition classes and study and exam leaves to articled students pursuing professional qualifications,” Bazlan says.

This article first appeared in The Edge Malaysia Weekly on July 3, 2023 – July 9, 2023 and subsequently on The Edge online on 11 June 2023. Article published with permission from The Edge Malaysia.

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