I would like to thank the Malaysian Institute of Accountants for giving me the opportunity to express my thoughts in this Annual Report.

I am pleased to note that the Institute, under the strong and dynamic leadership of YBhg Datuk Dr Abdul Samad Haji Alias, has achieved tremendous progress in the year under review. As the regulatory body for the profession, the Institute has embarked on a bold initiative to chart a new direction for itself in line with its vision to be a globally  recognised and respected business partner, which is committed to nation building.

I would like to congratulate the Institute on the successful implementation of the MIA Qualifying Examination (MIA QE) which is an alternative route for admission into the Institute for those seeking to become Chartered Accountants. It is an alternative pathway for graduates who do not possess a qualification recognised under Part I and Part II of the First Schedule to the Accountants Act 1967.

With progressive liberalisation of trade in services including accountancy, auditing, book-keeping sectors, and other related services, the profession needs to be better prepared and well positioned to face the challenges of the future. In view of this, we need to focus on the capacity building aspect - of members and member firms, strengthen the defense or safeguard mechanisms to withstand competition as well as encourage members of the profession to export their services.

I would also like to congratulate the Institute on the successful launching of the Practice Review Programme as a pro-active measure to ensure all audit firms operate at least to the required professional and ethical standards. This programme will enhance the confidence of the business community in the professional services of the Institute's members and ultimately, enhance public accountability and transparency in the profession.

In its efforts to constantly review and benchmark against international developments, the Institute has amended its By-Law B-1 on Professional Independence, with the view to strengthen the perception of the public towards independence of auditors and to improve the overall quality of audit and audit practices. All the members of the Institute should comply with this By-Law in order to give professional independence a boost in Malaysia.

To improve the quality and comparability of financial information reported by public sector entities around the world and to enhance accountability to the general public, the Accountant General’s Office has adopted and complied with the International Public Sector Accounting Standard 1 – Financial Reporting Under Cash Basis of Accounting in the preparation of the Public Accounts of the Federal Government beginning from the financial year 2002.

Under the requirements of this standard, other than the financial statements required by the laws in the country concerned, public sector entities have to prepare a Statement of Cash Receipts and Cash Payments. Information about the cash receipts, cash payments and cash balances is necessary to enhance accountability and to assess the ability of the entity to generate adequate cash and the likely sources of cash in the future to finance its activities.

The Accountant General’s (AG’s) Office is in the process of evaluating the possibility of implementing accrual accounting for the public sector. Under the Business Process Reengineering of the AG’s Office, the new accounting system which is being designed will be able to generate financial statements of the Federal Government based on accrual accounting. A committee was formed to study the possibility of adopting and complying with the International Public Sector Accounting Standard 1 to 20 and Financial Reporting under the Accrual Basis of Accounting issued by the International Federation of Accountants (IFAC), should the Government decide to implement accrual accounting in the public sector.

I am happy and proud of what the Institute has achieved to date. The year ahead is bound to be more challenging and to weather the hurdles in our paths, we must continue to strive for excellence. Lastly, I would like to wish the Institute and all its members success in all their undertakings.

Othman Abdullah

Accountant General