This page
provides answers to the most commonly asked questions by members. The FAQs
database is being updated from time to time. Please refresh as and when you
visit our FAQs site for each subject matter to view the latest version.
Please note that the information provided in this section are general
information. Members are responsible for verifying any information obtained
from this FAQs site.
If there are other General Enquiries, members may call the Institute and
request for MIA Info Assist or e-mail your enquiries to
info.assist@mia.org.my.
This service is exclusively for members and is handled by the Help Desk
Department. Alternatively, you may also write in/e-mail your enquiries
directly to the relevant department. The e-mail addresses are available on
the Institute’s website under the ‘Contact’
link.
Please
note that the Institute will only entertain enquiries from MIA members.
Any technical enquiry must be in writing and must include the member’s
name, membership number, address and contact number. Members are
required to follow the guidelines as set out in the Institute's
Policies On Answering Technical Enquiries.
It is located at Dewan Akauntan, No. 2 Jalan Tun Sambanthan 3,
Brickfields, 50470 Kuala Lumpur. Click the attachment below to download the map to
our office.
Part II of the First Schedule of
the Accountants Act, 1967 (The Act) specifies associations of accountants
recognised by MIA for purposes of admission as a member of MIA. A member of
MICPA (referred to as a scheduled body) can apply to be a member of MIA and
admission as a member of MIA will be granted upon fulfilment of other conditions
specified in Section 14 and Section 15 of The Act.
Q2.
I would like to apply to be a member of MIA. How do I go about it?
There are two prerequisites for a person to apply for MIA membership. You must have:
i) obtained one of the qualifications recognised by MIA (please refer to Q.3, Q.6 and Q.7)
ii) obtained not less than 3 years relevant practical working experience in areas related to accounting.
If you have fulfilled the above requirements, you may apply for membership into MIA. To register, you are required to complete and submit the MIA application form to the Institute with all the relevant documents.
Q3.
What are the requirements to become a chartered accountant of MIA?
Any person
wishing to apply for membership into MIA as a Chartered Accountant needs to have
one of the following qualifications recognised by the Institute:
i)
Have
passed any of the final examination specified in
Part 1 of the First
Schedule of the Accountants Act, 1967; or
ii)
Be a
member of any of the recognised bodies specified in
Part II of the First
Schedule of the Accountants Act, 1967; or
iii)
Be
eligible to sit for and has passed the Malaysian Institute of Accountants
Qualifying Examination (QE).
Unless a person does not possess a qualification recognised under
Part 1 and
Part II of the First Schedule to the Act, the MIA QE provides an alternative
pathway for admission to become a MIA member.
In
addition, applicants would need to gain 3 years of practical working
experience in the service of chartered accountant or in a government
department, bank, insurance company, local authority or other
commercial, financial, industrial or professional organisation.
Q4.
Does MIA recognise overseas degrees to gain admission into the Institute? Do I have to sit for any examination before becoming a member?
The Act does not recognise any overseas degrees for purposes of admission into the Institute. However, those who possess qualifications not lower than a first degree relating to accounting, business or finance recognised by the Public Services Department or other qualifications approved by the MIA Council may be eligible to apply to sit for the MIA QE. Upon completion of the examination and together with the relevant practical experience, he/she would be eligible to apply for membership as a Chartered Accountant.
Q6.
What is the requirement to become a licensed accountant of MIA?
Applicants under the licensed accountant category must possess one of the following:
i) Granted limited or conditional approval to act as an auditor of companies under section 8(6) of the Companies Act 1965, or been in public practice as an accountant, a tax consultant or a tax adviser immediately before the Accountants Act, 1967; or
ii) Member of the Malaysian Society of Accountants and passed any of the final examinations of that body last held in December 1992 and gain 3 years working experience in the service of chartered accountant or in a Government department, bank, insurance company, local authority or other commercial, financial, industrial or professional organisation.
Q7.
What is the requirement to become an associate member of MIA?
A person in academia (Lecturers/Professors) would be eligible to apply for the
Associate Membership. The person must possess a first degree or a Masters degree
or higher, in which he/she must have a major in accounting for either his first
degree or Masters degree. In addition, the person must also have not less than 3
years experience in teaching accountancy or accountancy related subjects at an
institution of higher learning or equivalent.
Q1.
Where can I obtain the MIA application form? Can the form be mailed to me or do I need to collect it from the MIA office?
The MIA application form can be obtained free of charge from its Head Office
in Brickfields, Kuala Lumpur or its Regional Offices (Johor, Northern, Sabah,Sarawak) or
downloaded from the MIA website under Membership Area. The
said form can also be mailed to prospective members upon request, either in
writing (mail, fax, e-mail) or verbal.
Q2.
What are the documents required to be enclosed with the application form?
Enclosed with every application form is a copy of the ‘Eligibility for Registering with the Malaysian Institute of Accountants’. One section on the ‘Checklist’ outlines the documents that are required to be enclosed with the duly completed application form.
Q3.
I have a qualification recognised under Part 1 of the First Schedule to the Act, how would I prove that I have the relevant
experience for admission?
Q4.
Must I work in the same company to gain the relevant working experience?
No, the total working experience can be accumulated. MIA will confirm the duration from the
Record of Practical Experience provided by your employer. However, for the purpose of ascertaining the period of experience, any period of experience of less than 6 months duration and part-time experience will not be considered.
a) a Commissioner for Oaths, or b) any MIA member, to state the name and membership number, or c) at the MIA office, to bring the original and its copy
Yes, you may register online. However the Institute would still require
applicants to submit hardcopy of the application form with all the required
documents.
A member of MIA is given the status to practice as an
accountant in Malaysia. In addition, members are entitled
with other benefits and entitlements. Please click
HERE for
details.
Q1.
When will I receive my membership certificate?
A member
will be advised when the membership certificate is ready for collection. A
member may only collect his membership certificate after he has attended the
members' induction course.
Q2.
Am I required to collect the membership certificate personally from your office?
Members from Klang Valley and Selangor are required to collect their
certificates personally or their respective representative to collect on their
behalf with an authorisation letter stating the name and I.C. No.
However, members in other states may request for the membership certificate to
be sent to them. You may send in your request by mail, fax or e-mail addressed
to the Institute and stating clearly the address to be sent to and your contact
number. We are unable to send to P.O. Box addresses.
Members in Johor, Penang, Sabah and Sarawak may request for their certificate to
be sent to the Institute Regional office for collection.
Members who are overseas, who wish to have their certificates sent to them, will
have to bear courier charges depending on the location.
Q3.
I have lost my membership certificate. Can I get a replacement?
Members who have lost/misplaced their membership certificate and
wish to get replacement are requested to submit a
statutory
declaration form together with replacement certificate
fee of RM 10 (with proof of police report) or RM 50 (without
valid reason).
Description
: Statutory Declaration Form
Format
: PDF
Size
: 12.8KB
Right click
HERE
and select 'Save Target As' to download the document.
Q1.
Is it compulsory for members to attend the induction course?
Yes. Members are required to attend the induction course within 6 months from
the date they are being admitted as a member of the Institute. Please refer to
the Institute's By-Laws - Section 400.1.
The Institute has launched its
MIA e-Learning portal recently and the
Member Induction Course (MIC) is now conducted via online. Newly admitted
members will be informed on the registration guidelines of
MIA e-Learning accordingly.
Q2.
I am working overseas. Will I be exempted from attending the induction course?
No. The Member Induction Course is now conducted via e-learning (e-MIC). As
such, extension to members who are based overseas is no longer applicable on
the ground that members are able to access e-MIC via internet from anywhere
and at any time.
Q3.
Under what circumstances a member may seek exemption from attending the induction course?
The Council may in its absolute discretion, grant a postponement from the
requirement of this section for the following reasons:-
(a) prolonged illness or disability; or (b) any other reason as may be found reasonable by the Council.
A written application seeking exemption shall be given to the Institute
supported with relevant documents. Please refer to the Institute's By-Laws -
Section 400.2 and 400.3.
Q4.
Will MIA take any action against those who fail to attend the induction course?
It is provided under the Institute's By-Laws (On Professional Ethics,
Conduct and Practice) that a breach of any by-law will prima facie give rise to a complaint of
unprofessional conduct against the members concerned. As such, members who fail
to observe proper standards of professional conduct as set out in the by-laws
may be required to answer a complaint before the Investigation and the
Disciplinary Committees of the Institute.
Q2.
How do I get the Payment Advice for the renewal of fees?
The
Notice of Subscription and Practising Certificate Statement has been made
available at the Institute's website. Please login as Member in order to print
the payment advice. If you have forgotten your password, please contact Help
Desk or email to password@mia.org.my.
The
Malaysian Accountancy Research and Education Foundation (MAREF) was established
in 1990. The objectives of MAREF are to encourage and promote the advancement
and development of accountancy in Malaysia and to carry out research and to
promote development of accounting and auditing standards.
MAREF is an approved institution under Section 44(6) of the ITA and your
donation to MAREF is tax deductible. For more information on MAREF, please visit
www.maref.org.my.
** Members may pay by credit card (only Visa and Mastercard issued by
banks and financial institutions incorporated in Malaysia) even if you
are not a Maybank account holder.
2.
Credit Card
By faxing
the Credit Card Authorisation Form to 03 – 2273 7533. Click
HERE
to
download the form.
3.
Cheque
Cheque should be made payable to ''MALAYSIAN INSTITUTE OF ACCOUNTANTS''
followed by the membership number of the Payer i.e ''MALAYSIAN INSTITUTE
OF ACCOUNTANTS – M/No. XXXXX''.
Please write your full name, the
purpose of payment (e.g. annual subscription 07/08, advance
subscription, annual practicing certificate fee 07/08, etc) and your
contact number on the reverse side of the cheque.
To ensure
smooth processing of your subscription, please do not send post-dated
cheques.
Please send your cheque to Dewan Akauntan, No. 2, Jalan
Tun Sambanthan 3, Brickfields, 50750 Kuala Lumpur.
4.
Bank Draft
Bank draft
should be made payable to ''Malaysian Institute of Accountants''.
For those who wish to make payment in foreign currency via bank draft,
please contact the Finance Department to obtain the foreign currency
amount.
Members may print their e-receipt being payment for subscription and practicing
certificate fees at the Institute’s website. The e-receipt will be made
available within 4 working days upon receiving the payment. Please login as
Member in order to print the official receipt.
Q7.
My membership had been removed due to non payment of subscription. Please advise how to get readmitted as a member so that I can practice as an Accountant.
To readmit as a MIA member, you need to submit your application for readmission
to the Institute. You are required to settle all fees in arrears together with a
readmission fee not exceeding RM1,000.00 prior to being readmitted as a member
of the Institute.
Click
HERE
to download the form for application to seek readmission into membership.
Q8.
As I am working overseas, do I have to pay the full annual subscription?
A member who is based overseas would be required to pay the full annual
subscription. There is no provision provided in the Accountants Act, 1967 for a
lower fee.
The amount of subscription fee is the same for local members
and those residing overseas.
Q1.
I am a pensioner. Can I apply to the Institute to consider reducing my annual subscription since I have retired from work?
There is no
provision in the Accountants Act 1967, for reduction of annual subscription for
members who have retired. As such, you would be required to pay the same amount
of fees. Nevertheless, the Institute allows retired members to apply under the
Retired Members category with certain conditions.
Q2.
What are the conditions to apply for the Retired Members category?
A member who wishes
to apply for the Retired Members category must be a Chartered Accountant who is:
a) retired and receives no income from personal exertion; b) aged 55
years and above; and c) member of the Institute for more than 15 years.
Retired Members are entitled to all privileges accorded to members and in
addition will be able to utilise up to 50% of their annual subscription fees to
offset the fees/payment for:
i) participation at MPDC seminars; ii)
attendance at MIA Annual Dinners; iii) MIA publications which are required to
be purchased; and iv) other benefits from time to time which are approved by
Council.
The benefits must be utilised within the financial year where
the annual subscription is due and cannot be accumulated.
Please click
HERE for Retired Members category
application form.
Q1.
I would like to resign from membership, what must I do?
Members who wish to resign from the Institute may do so by writing officially to the Institute. Verbal communication is not sufficient. Upon applying for resignation, members are required to settle all outstanding annual subscription fees due which include the current financial year when the application for resignation is made. Please note that there is no provision for prorated annual subscription.
Please also be informed that the annual subscription fee for membership is due on 1 July each year. As such, any application to resign received in the beginning of new financial year (for example in the month of July or August) would be required to settle the full annual subscription fee for the particular new financial year. Therefore, members who wish to resign are advised to submit their resignation before the end of a financial year (30 June).
Q1.
I was removed from membership due to non payment. I would like to have my membership back. What should I do?
Members who were removed due to arrears in annual subscription fees would be required to settle all arrears with a readmission fee determined by the Council prior to being readmitted as a member of the Institute.
Click
HERE
to download the form for application to seek readmission into membership.
Q1.
I heard that MIA members are required to obtain CPE hours, please explain.
It is mandatory for
MIA members to complete at least (120) CPE credit hours of relevant CPE learning
for every rolling 3 calendar year period, of which 60 CPE credit hours shall be
structured and verifiable. Member shall complete at least 20 CPE credit hours of
structured and verifiable CPE learning each calendar year. Please refer to the
Institute's
By-Laws – Section 410 for further information.
Q2.
What is structured and unstructured CPE learning?
Structured CPE learning includes attendance either as a presenter or
participant at courses, conferences and seminars, recognised post-graduate
studies, writing technical articles, papers or books.
Unstructured CPE learning includes private reading and study, and technical
research for practical work.
Q3.
Must a member attend MIA seminars in order for the CPE credit hours to be recognised?
No, a member may also attend courses organised by other organisations, as long as they are related to the accountancy profession or are relevant to your work.
Q4.
In what circumstances can a member seek exemption from CPE compliance?
The Council may
grant a temporary or partial exemption from the CPE requirements if a member
suffers prolonged illness or disability or any other reason as may be
determined by the Council. Please refer to the Institute's
By-Laws – Section 410.9.
Q5.
How does the Institute select its members for CPE audit?
Members will be selected from the Institute’s records. A member selected will be
advised to do the ‘CPE Compliance Online Declaration’.
Members are
required to update the event date, course title and duration of training without
the need of submitting the supporting documents (for example, certificate of
attendance) via online.
The Institute however reserves the right to
request for evidence to verify any information provided by members to the
Institute.
Q6.
Will MIA take action against those who fail to comply with the CPE requirement?
It is provided
under the Institute's
By-Laws on
Professional Ethics, Conduct and Practice that a breach of any by-law
will prima facie give rise to a complaint of unprofessional conduct against
the members concerned. As such, members who fail to observe proper standards
of professional conduct as set out in the by-laws may be required to answer
a complaint before the Investigation and the Disciplinary Committees of the
Institute.
Q8.
If I attend a course organised by any other professional body, will I get CPE credit hours?
If I attend a course organised by any other professional body, will I get CPE credit hours?
Yes. In most
cases, the Institute would grant CPE credit hours for courses organised by other
professional accountancy bodies. CPE credit hours are not restricted to courses
organised by the Institute.
Structured CPE learning activities are those activities which have
a clear set of objectives and a logical framework. Examples of structured
learning includes attendance either as a presenter/lecturer or participant at
short courses, conferences and seminars, recognised post-graduate studies or
diploma courses and formal distance learning which requires participation and
assessment. It also includes participation or rendering services in a technical
committee where technical material is prepared by you, or writing technical
articles, papers or books for publication.
Unstructured learning includes private reading and study of technical briefs and
journals, and technical research on accounting and auditing matters for
practical work purposes.
Q11.
If I am unemployed or retired, I do not have to comply with the CPE requirements as set out in the Institute's By-Laws on Professional Conduct and Practice.
This is incorrect. As a member of the Institute, you are required to comply with the CPE requirements regardless of whether you are in employment or otherwise. Similarly, if you have retired, you will also have to comply with the CPE requirements. The objective of the CPE requirement is continuous life long learning and will provide you with real value and career development options if you are unemployed. If you are retired, CPE compliance will keep you abreast with the profession, especially if you have undertaken a senior position in industry subsequent to your retirement such as directorships or advisory positions.
Q12.
If I am no longer employed in the areas of finance, accountancy and/or business, I am not required to comply with the CPE requirements as set out in the Institute's By-Laws on Professional Conduct and Practice.
This is a false assumption. As explained above, all members of the Institute have to adhere to the CPE requirements regardless of their career path or divergence from areas of accountancy, finance or business. Above all else, as a member, you remain a professional and need to uphold the standards of professionalism.
Q13.
If I have obtained more then the required CPE credit hours for a particular CPE cycle, can the excess CPE credit hours be carried forward to the next CPE cycle?
If I have obtained more then the required CPE credit hours for a particular CPE cycle, can the excess CPE credit hours be carried forward to the next CPE cycle?
No. The excess CPE credit hours cannot be carried forward from one CPE cycle to
another. The next CPE cycle will start afresh.
Q14.
How can I ascertain if a certain course or seminar would be recognised by the Institute for CPE purposes?
In general, if a particular course or seminar is relevant to a member's area of
work and equips the member with the required skill and knowledge to enable the
member to discharge his or her duties competently, the said course or seminar
would be recognised for CPE purposes. The term 'relevant' is broad and general
and also varies according to individual circumstances. A seminar or course may
be relevant to the member's area of work but not necessarily be related to
accounting, business or finance. It could be a seminar on people management,
decision making or presentation skills.
Members are required to update the
event date, course title, organiser and duration of training without the
need of submitting the supporting documents (for example, certificate of
attendance) via online.
Q16.
If I am unable to provide evidence of attendance for CPE activities, will I still be granted the CPE credit hours?
Effective from 1 May 2011 members can update their CPE activities by way of
'CPE Compliance Online Declaration'.
As provided in the Institute's
By-Laws, MIA members would be given CPE credit hours should they attend courses
which are related to his or her current and future work and professional
responsibilities.
Q17.
If I am currently enrolled in a Masters or Ph.D. program, how are the CPE credit hours calculated?
If I am currently enrolled in a Masters or Ph.D. program, how are the CPE credit hours calculated?
You are eligible to obtain CPE credit hours for Masters or Ph.D. programs. To
obtain the requisite CPE credit hours, you will need to obtain the following
documentation to verify the CPE credit hours:
a.
A letter
from the Dean of the University or Institution to verify your enrollment
into the Masters or Ph.D. program offered by the said institution; and
b.
Transcripts
of examination results; and
c.
Detailed
course schedule.
Incomplete
documentation will result in the inability to verify the CPE credit
hours, and the relevant CPE credit hours will not be granted.
Q18.
Under what circumstances can I request for an exemption from the CPE requirements?
Under what circumstances can I request for an exemption from the CPE requirements?
The Council
of the Institute may in its absolute discretion grant a temporary or
partial exemption from the CPE requirements to you for the following
reasons:
(a) prolonged illness of disability; and/or
(b) any other reason as may be determined by the Council.
Request for exemption should be in writing and supported with the
relevant documentation, for example, medical report.
Q19.
What if I fail to obtain the requisite CPE credit hours?
Non
compliance with the CPE requirements will amount to unprofessional
conduct because it is a violation of one of the fundamental principles
of the profession namely the duty to maintain and update professional
competence. It is unfair for the majority of members who do comply with
the CPE requirements to allow non-complying members to claim the same
status or competencies.
Q1.
Who is required to apply for a practising certificate?
Before a member holds him/herself out as a member in public
practice, he/she must hold a valid practising certificate
issued by the Institute pursuant to the provisions of Rule 9
of the MIA (Membership and Council) Rules 2001.
Rule
2 of the above Rules states that:
"member in public
practice" means a chartered accountant or licensed
accountant who, as a sole proprietor or in a partnership,
provides or is engaged in public practice services in return
for a fee or reward for such services otherwise than as an
employee ;
"public practice services" includes -
(a) auditing including internal auditing; (b)
accounting and all forms of accounting related consultancy;
(c) accounting related investigations or due diligence;
(d) forensic accounting; (e) taxation, tax advice and
consultancy; (f) bookkeeping; (g) costing and
management accounting; (h) insolvency, liquidation and
receiverships; (i) provision of management information
systems and internal controls; (j) provision of
secretarial services under the Companies Act 1965 [Act 125];
or (k) such other services as the Council may from time
to time prescribe.
Further to the above,
Section 500.6
of the Institute's By-Laws provides that where members
participate as directors and/or shareholders in limited or
unlimited companies which offer taxation, tax advice and
taxation consultancy services, such members shall be deemed
to be members in public practice.
Q2.
Previously I was a Public Accountant, must I apply for a practising certificate?
Practising Certificate is only applicable to those who wish
to go into practice either under audit or non audit practice
or those who intends to be director/shareholder of a private
limited company offering tax services.
Q6.
Will I be issued with a new certificate when it is renewed?
No, the practising certificate is issued only once. A member who has been issued with a practising certificate is required to retain the certificate for as long as he remains in public practice or engages in public practice services, full time.
A member shall commence public practice within six months
from the date of issuance of a practising certificate and
shall practice on a full time basis.
Q10.
I am a lawyer and also a MIA member. Could I practice under both profession i.e. set up a legal firm as well as an audit or non-audit firm?
No, you should not practise as a lawyer and at the same time practice under a member firm of MIA. This is not permissible. You may only choose either one of the profession to practice.
Q11.
Must I apply for a practising certificate in order to provide accounting and/or taxation services?
If you wish to provide accounting and/or taxation services, then it is a MUST to obtain a practising certificate from the Institute. The accounting services could come under the non-audit firm practice. If you intend to provide tax services under the non-audit firm practice, the proprietor or one of the partners must hold a valid tax agent licence. This is the current
requirement.
Q12.
Can I apply for audit license first and later apply for practising certificate?
No. You are required to apply for a practising certificate from the Institute prior to applying for an audit licence. Upon obtaining the audit licence, you may set up an audit firm registered with the Institute.
Q13.
I intend to register my practice under the non audit firm category. Must I register my business with the Companies Commission of Malaysia (CCM)?
No. Non-audit firms of MIA are considered professional firms and therefore it is
not required under the Registration of Business Act 1956 to register with CCM.
Please ensure every partner of the firm holds a valid practising certificate
issued by MIA.
Q14.
Can a member apply for an extension of time to commence public practice should he fail to commence practice within 6 months from the date of issuance of his practising certificate?
Currently, the Institute only allows extension of time for those members who
have submitted their application for an audit licence with the Accountant
General's Department. The extension is granted as these members would be
required to hold valid practising certificates when they attend their
interviews.
Q1.
What is the requirements to apply for an audit licence?
Please note that with effect from 1 January 2013, the
requirements to apply for an audit licence are as follows:
a)
must be a Chartered Accountant of MIA.
b)
at least 5 years of accumulative relevant and sufficient audit experience obtained prior to and/or after becoming MIA member. At least 3 years must be in audit work and 1 year out of the above 3 years shall be in an audit supervisory role. The audit supervisory role is defined as being responsible for audit management including consultation with audit partners and has experience in giving opinions for financial statements and be directly involved in audit planning. (note: if you are no longer in audit practice, but still within a 3 year period prior to the application, you are still eligible to apply. For candidates who have left audit practice for more than 3 years, they must work for at least 1 year in audit in the Malaysian environment)
c)
have attended the "Public Practice Programme" organised by the Institute prior to the submission of the application.
d)
hold a valid practising certificate issued by MIA prior to the submission of the application.
The panel of interviewers consists of representatives from
the AG's department, MIA, CCM, Bank Negara Malaysia and the
Securities Commission and Insolvency department (for
Liquidator Licence approval). As such, the representatives
will ask questions relevant to their areas.
Q6.
How many sets of form and where should we submit the application for audit licence?
The audit licence application form, 'Borang A' is to be completed in 6 sets with original signatures on all the forms. The forms must be completed in Bahasa Malaysia except for the statutory declaration which can be completed either in Bahasa
Malaysia or English Language. The Treasury will only accept the prescribed form,
i.e., forms should not be retyped. Applications should be sent by hand or
courier to:
Jabatan Akauntan Negara Malaysia
Unit Kemajuan Profesyen
Bahagian Pembangunan Perakaunan dan Pengurusan
Kompleks Kementerian Kewangan
No.1, Persiaran Perdana, Presint 2
62594 Purtajaya
(General line : 03-88821000)
Q9.
What is the requirement to be a referee for the audit licence application?
Referee for the audit licence application could be your relative or peer whom
could be referred to on matters related to the applicant’s behaviour, character
and status of residency. The immediate family members are not allowed to be the
referee.
Q10.
What is the fee for audit licence application?
Payment for audit
licence is RM100.00 payable to "AKAUNTAN NEGARA MALAYSIA" to be paid after
passing the interview, upon receiving the approval in principle letter.
Audit licence is renewable every 2 years. Renewal must be submitted 3 months
before expiry of the licence. If the licence is not renewed within a year, it
will be revoked and the member has to apply for a new licence.
Q12.
What is the form used for audit licence renewal?
The form for audit licence
application is known as 'Borang
C' to be completed in 4 complete sets with original signatures on all the forms. The forms must be completed in Bahasa Malaysia except for the statutory declaration which can be completed either in Bahasa
Malaysia or English Language. The Treasury will only accept the prescribed form,
i.e., forms should not be retyped. Applications should be sent by hand or
courier to:
Jabatan
Akauntan Negara Malaysia Unit Kemajuan Profesyen Bahagian Pembangunan
Perakaunan dan Pengurusan Kompleks Kementerian Kewangan No.1, Persiaran
Perdana, Presint 2 62594 Purtajaya (General line : 03-88821000)
Q15.
What is the requirement to apply for liquidator licence?
A member may apply for liquidator licence at least one year after obtaining the
approval for audit licence and should have 2 years experience in liquidation.
Q17.
What is the fee for liquidator licence application?
Payment for liquidator licence is RM50.00 payable to "AKAUNTAN NEGARA MALAYSIA"
to be paid after passing the interview, upon receiving the approval in principle
letter.
(Further enquiries with regards to the audit licence/liquidator
application, please refer with the Accountant General’s Department at 03-8882
1118)
Q18.
Should the auditor list down all PLCs and its subsidiaries which they have audited including Public Listed Companies (PLCs) which are still listed and no longer listed?
The auditor should list down the Public Listed Companies, which have been
audited as well as those that the audit is still on-going. This includes
companies that are no longer listed. If the company has ceased its operation,
the auditor must state the period the company being audited. (date from – date
to).
Q20.
The PLCs list, should it be covered within the 2 years of the licence period? E.g. If Mr. B licence is valid from 1/7/2007 - 30/6/2009, should the list of PLCs is within that period or, from 1/7/2007 - (3 months earlier from the expiry date of the licence, as they would need to submit for renewal 3 months earlier).
The auditor shall mention the PLCs within the audit licence period or up to 3 months prior to the licence expiry date – submission of licence renewal form.
Q1.
What is the procedure to set up an audit firm?
Before setting up an audit firm, a member who is a holder of
a valid Practising Certificate must submit
Form MF-A with a copy of the audit licence or the audit
licence approval letter to seek approval for the name of the
intended practice from MIA. Upon approval, he has to
register the firm with the Companies Commission of Malaysia
(CCM) by submitting Borang 5. (Please refer to the Companies
Act, 1965 under the prescribed form). CCM then allocates the
audit firm number. Thereafter, to submit copy of CCM letter
with copy of Form 5 to MOF (Accountant General’s Department)
and file the same documents together with
Form M1 with MIA.
Q2.
What is the procedure to set up a non-audit firm?
Before setting up a non-audit firm, a member who is a holder
of a valid Practising Certificate must submit
Form MF-A to seek approval for the name of the intended
practice from MIA. Upon approval, he has to file the
Form M3 with MIA. Registration with CCM is not
necessary.
Q3.
How does a member in public practice describe his firm?
A member in public practice shall describe his or her firm
as a firm of "Chartered Accountants" or as a firm of
"Licensed Accountants" as appropriate. Please refer to
the Institute's By-Laws – Section 420.3.
Q4.
Where should the logo of the Institute be inserted in the letterhead of a member firm?
You may insert the logo of the Institute on the top of the
firm's letterhead.
The words ''A Firm Registered with
the Malaysian Institute of Accountants'' is to be inserted
under the logo. This is effective 1 January 2007.
The
logo shall be either in full colour or in black and white
and in accordance with the guidelines issued by the Council
from time to time on the use of the logo. Please refer to
the Institute's By-Laws – Section 500.11. The
guidelines may
be obtained from the Institute's homepage.
Q6.
Can a member firm advertise its services in a local newspaper?
Member firms are allowed to place advertisement so
long as it is in accordance with the Institute’s By-Laws.
Please refer to the Institute's
By-Laws -
Section 150.2 and Section 250.
Q7.
What is the allowable size for a signboard to be displayed outside the business premises of members who are in public practice?
The current By-Law does not state the required size of the
signboard . However, it should be in accordance with the law
of the State and be in good taste and professionally
dignified.
Practice Review is a process in which the activities of a professional are audited by members of the same profession. It is a process where the standards and procedures of an audit practice are assessed by members of the same profession. Practice Review is now a more accepted form of self-regulation binding the accountancy profession. Systems of Practice Review are already a norm in countries like Canada, New Zealand, United Kingdom, Hong Kong and Singapore.
Practice Review is intended to provide educational and supportive services and assist practitioners to maintain and improve their professional standards. The implementation of Practice Review will create awareness among practising members to the need to maintain such a level of professional standard in their work regardless of whether they are practising as sole practitioners or as partners of large firms.
Q3.
Where can we find out more about the Practice Review Process?
Where can we find out more about the Practice Review Process?
The
practice review process can be found in section 550 of the By-Laws on
Professional Conduct and Practice of MIA (Issued January 2007). In addition
Appendix vii on statement on Practice Review for section 550 should be referred
to for more details and information on review procedures and conduct of
members."
Q2.
What are the services available in MIA web portal for members?
Members may view and update personal information, correspondence address, access the technical
section and circulars issued by MIA, register online for CPE courses and update their CPE hours through the web portal.
Please click
HERE for detail on online change of correspondence address.
Q4.
Can I apply for membership of the Institute online?
Yes, new applicants may register online. However, the Institute would still
require applicants to submit hardcopy of the application form with all the
required documents.
Q4.
I am not a member of the above bodies? Is it possible for me to use the MIA Resource Centre?
I am not a member of the above bodies? Is it possible for me to use the MIA Resource Centre?
A
non-member who wishes to use the MIA RC and its facilities is
required to pay an annual subscription. Membership fee is based on
categories as follows:
MIA Member
Firms
: RM 50 p.a.
Individual
: RM 50 p.a.
For those
who do not wish to be a member of the MIA RC a fee of RM 5.00 will be
charged per visit.
Q12.
Can I use my laptop in the MIA Resource Centre?
Can I use my laptop in the MIA Resource Centre?
Yes. You can use your laptop at the MIA RC. MIA RC is equipped with
Wi-Fi coverage to enable users to access the internet using their own laptop. In order to use this service, all you need to do
is to register with the librarian and get your access ticket.
You are
required to pay an annual fee and a deposit depending on the
borrowing privilege offered to you. You are required to fill in the
Book Loan Membership Form and pay an annual fee and a deposit which
is refundable after 1 year from the date of registration and upon
request for termination of the service.
The
initial loan period is 2 weeks per book. Books with yellow tag can
only be borrowed for three(3) days, where else books with red tag
are not for loan.
Yes.
Books may be renewed for a further period of one week provided there
is no reservation by any other member. Renewal can be made either in
person via telephone, or e-mail to
library@mia.org.my. Please give us your name and title of the
book you wish to renew.
You can
return books to the library by handing them over at the MIA RC
reception counter, or post them back to us. ( you will need to cover
the cost of postage)
Q20.
What happens if I lose or damage the books that I have borrowed?
What happens if I lose or damage the books that I have borrowed?
Borrowers are responsible for any books borrowed under their name
and will be liable for any damages or loss of books borrowed. Please
report lost or damage of books or materials immediately to the
library.
A borrower will be charged the full cost of the book for every book
lost, plus 10% of the book price.
Q23.
How do I make a search on the resources/collections in the MIA Resource Centre?
You may access the
MIA RC database which is our ''Online Catalogue'' by logging into MIA website
under
"CIRCULARS AND RESOURCES - Resource Centre – e-Library''
link. You may conduct a search by either keying in the ''title'', ''author'', or
''subject'' of the book/journal. Alternatively, you may contact our librarian
for assistance.
Q24.
How can I access to MIA Resource Centre E-library?
How can I access to MIA Resource Centre E-library?
Only
members of MIA are allowed to access MIA E-Library upon their
registration to MIA Website using members ID and password. You may
register online at our MIA website.
Q25.
What kind of information can I obtain from E-Library?
With MIA RC E-Library you can access to :
a.
MIA RC Online Catalogue
b.
E-Books
c.
E-Journals
*The MIA RC subscribes to several online databases to be used in our resource centre. You will need the ID and password to access them. Please ask the librarian for the necessary ID and password.
Q27.
Can I request the librarian to photocopy some materials and send them by post?
Can I request the librarian to photocopy some materials and send them by post?
Yes. For
those who wish to have documents photocopied and delivered to them
are requested to pay in advance (prepaid). Members are required to
open a deposit account whereby a sum of RM50.00 is to be paid upon
registration.
Q28.
Can I print from the PC which are available at the MIA Resource Centre?
Can I print from the PC which are available at the MIA Resource Centre?
Yes, you
are allowed to make printouts from the PCs with a charge of RM 0.50
per page for printouts from the internet and RM 1.00 for printouts
from CD-ROM.
Q31.
I wish to donate books/magazines to the MIA Resource Centre. How do I go about it?
I wish to donate books/magazines to the MIA Resource Centre. How do I go about it?
The MIA
RC welcomes most donations of books or magazines for its
collections. Donations will be reviewed under the guidelines of the
MIA RC collection development policies before they are added to the
collection. Please contact the librarian before bringing in the
items.
Q32.
How do I make a comment, compliment or complaint?
How do I make a comment, compliment or complaint?
We aim
to provide the best possible services, and we welcome your comments
about how we can improve our services to you. Occasionally things
may go wrong and you may wish to make a complaint. You can do these
in a number of ways:
a.
Speak to a
member of staff in person or on the telephone who will try to dissolve
any difficulties immediately.
b.
Write your
comments in the MIA RC Comments & Suggestion Folder which is located at
the back of the MIA RC . These are monitored regularly by the librarian.
GAAP (Generally Accepted Accounting Principles) refers to accounting practices which are permissible by the accounting profession or which are legitimate in the circumstances under which it has been applied. GAAP encompasses the conventions, rules and procedures necessary to define accepted accounting practices at a particular time.
Article on GAAP- Akauntan Nasional Volume 15, issue November 2002
Approved accounting standards are defined in the Financial Reporting Act 1997 as "accounting standards" which are issued or adopted by the Malaysian Accounting Standards Board.
Pursuant to section 27 of the Act, the standards issued or adopted by MASB, are legally binding upon financial statements required to be prepared or lodged under any law administered by the Securities Commission, Bank Negara Malaysia and Suruhanjaya Syarikat Malaysia.
Q4.
Where can I get copies of the International Financial Reporting Standards (IFRS)?
Copies of the IFRS can be purchased from the Institute while stock last. Alternatively, you may order the book from the International Accounting Board (IASB) directly.
Q5.
MASB recently unveil new name for accounting standards. When will the change take effect? What have changed?
With effect from 1 January, 2005, the title of the document has changed from MASB Standards to Financial Reporting Standards. Any reference to MASB Standards will now change to Financial Reporting Standards.
Q8.
Since ISAs are adopted as the basis for approved standards on auditing and related services in Malaysia, how does the difference in local law and practices being addressed by the standards?
In the event that an ISA contains guidance which is significantly different from Malaysian law and practices, the explanatory foreword to an approved ISA will provide for such differences.
Q9.
What would happen if an auditor does not comply with the approved standards on auditing issued by MIA?
Apparent failure to do so may lead to an investigation into the member’s conduct by MIA. It could be regarded as conduct discreditable to the profession of an accountant and might lead to disciplinary action being taken against the auditor concerned.
Q11.
Does MIA issue guidance such as samples of auditor’s report, engagement letter etc.?
Does MIA issue guidance such as samples of auditor’s report, engagement letter etc.?
MIA issues guidance
to members in the form of Recommended Practice Guides (RPGs). The RPGs are
available from MIA’s web site under Technical-Area-Auditing-Guidelines link.
Q12.
When is the deadline for Companies to file their tax returns to the Inland Revenue Board (IRB) ?
The Companies are to file their tax returns to the Processing Centre (Pusat Pemprosesan) of the IRB within 7 months from the end of the accounting period. For example; for a company with financial year ended 31.12.2002, the deadline to file the tax return to the IRB would be by the 31.07.2003.
The address of the Processing Centre is:
Pusat Pemprosesan Lembaga Hasil Dalam Negeri Aras 12-18, Menara C, Persiaran MPAJ Jalan Pandan Utama, Pandan Indah 55100 Kuala Lumpur Tel: 03-4297 3010/20/40/50/70/73/78
Q15.
Where can I get the latest updates on matters concerning taxation?
Members of the
Institute as well as the public would be able to obtain the latest updates on
matters concerning taxation via the Institute's website under the ‘Technical’
heading, i.e, circulars, articles and information relating tax matters. In
addition, the latest updates can also be obtained from the relevant government
authorities and bodies such as the Treasury (www.treasury.gov.my),
IRB (www.hasil.gov.my), Royal Malaysian Customs
(www.customs.gov.my), MITI (www.miti.gov.my),
MIDA (www.mida.gov.my)
and so forth.
Q17.
Where can I obtain the tax return forms, i.e., Form C, Form B, Form CS, Form P, Form CT, etc.?
Members of the
Institute as well as the public would be able to obtain tax return form from any
branch of the IRB. However, please note that all taxpayers and individuals, are
encouraged to file their tax returns vide E- Filing.
There are certain
qualifications recognised by the Ministry of Finance in order to apply for a tax
agent licence under section 153 of the Income Tax Act, 1967 with relevant years
of tax experience.
The tax agent licence application (Borang
EC)
and renewal form
(Borang
EC1)
may be obtained from the Institute or the Ministry of Finance or
downloaded from the MIA or Treasury website. Further enquiries with regards to
the tax agent application/renewal, please refer with the officer-in-charge, Cik
Nik Nur Firdaus binti Abu Bakar from Tax Analysis Division of MOF at 03-8882
4308 (DL).
Q20.
What are the requirements if I wish to incorporate a tax company with limited liability?
The Institute will
support a member's application to incorporate a company providing tax services
if he/she has met the conditions set by the Institute whereby the directors of
the proposed company who are members of the Malaysian Institute of Accountants
must hold valid practicing certificates issued by the Institute. In addition,
one of the directors must be an approved tax agent under the Income Tax Act,
1967.
Please note that the company is not allowed to offer accounting services. These
requirements must be complied with at all times.
The following documents are required for the Institute to process the
application:
i)
A completed Form
TC-A
ii)
A copy of the
latest tax agent licence issued by the Ministry of Finance
iii)
A copy of the
query letter from the Companies Commission of Malaysia (CCM)
iv)
Form 13A filed
with the CCM (for change of name only)
v)
Form 49 for the
existing company (if any)
vi)
Practising
Certificate application (for MIA members who have yet to hold a Practising
Certificate)
Q21.
Are the auditors under the same audit firm, allowed to act as tax agents for the same client? In the case of a sole proprietor practitioner, can the same person sign for both audit report and tax document/s?
It is possible for an auditor to be the tax agent for the
same company provided that his independence is not in any manner impaired. A
tax agent’s role is only limited to the compilation of financial figures for
tax submission and thus, the issue of independence may not exist. However,
it is generally accepted that one should always look at the substance rather
than the form of engagement as provided by
By-Law A-2.1 (3). A member
in public practice shall be, and be seen to be, free in each professional
assignment he undertakes, of any interest which might detract from
objectivity. The fact that this is self-evident in the exercise of the
reporting function must not obscure its relevance in respect of other
professional work.
Q23.
Are there any guidelines issued by MIA on management accounting?
The Statements on
International Management Accounting Practice (IMAP) issued by the IFAC PAIBC
(previously known as FMAC) and adopted by the Institute are included in the
Members Handbook. These statements offer practical guidance on the application
of accounting concepts, procedures, and techniques to the management and control
of organizations. They represent widespread accepted practice based on a careful
study of options across many sites and circumstances.
The last IMAP adopted by the Institute was MAP 7. The IFAC PAIBC did not issue
any statements after MAP 7. These statements were renamed the International
Management Accounting Practice Statements (IMAPS) by the IFAC PAIBC. IFAC has
since withdrawn the IMAPS.
NAfMA stands
for ’National Award for Management Accounting’. NAfMA began as a project
for the PAIB Committee of MIA in 2003. Independently, CIMA Malaysia Division was
moving towards the development of a management accounting best practice award.
Both MIA and CIMA Malaysia Division formed a strategic alliance to collaborate
on a national award for best practices in management accounting. Thus NAfMA was
born, the first award of its kind in Malaysia and possibly in the region.
The MIA and CIMA Malaysia Division are the organisers and awarding bodies of NAfMA.
Officially launched in April 2004, the inaugural NAfMA award presentation
and dinner was held in December 2004 in Kuala Lumpur.
The working partners are CIMA-UiTM Asian Management Accounting Research Centre (AMARC)
and National Productivity Corporation (NPC). The Award is supported by the
Accountant General's Office of Malaysia, British Malaysian Chamber of Commerce,
Bursa Malaysia Berhad, Federation of Malaysian Manufacturers, the Malaysian
International Chamber of Commerce and Industry and the SMI Association of
Malaysia. Public Bank has been the main sponsor for NAfMA 2004 and
Malaysia Business has been the official Business Magazine since 2005.
The objectives of NAfMA are:
a)
To recognise
organisations adopting best practices in management accounting and creating
value that leads to business excellence.
b)
To promote the
application of management accounting techniques and systems within
organisations in Malaysia in the pursuit of world class business
performance.
Q25.
Formation of A Limited Company Providing Accounting Sevices
Formation of A Limited Company Providing Accounting Services
Question (as per letter dated 15 August 2001):-
I wish to form a company bearing the name "ABC Accounting Solutions Sdn. Bhd." to provide accounting services to my clients. The Registrar of Companies (ROC) wanted me to get a supporting letter from MIA before it can approve the use of such name. Please let me have your supporting letter soonest possible. Your supporting letter should be addressed to ROC and forward to me for my onward transmission to the ROC.
Answer (as per letter dated 24 August 2001):-
We refer to your letter dated 15 August 2001 with regard to the above matter.
It is the Institute’s position not to support any application to set up a body corporate to offer the services of a chartered accountant at the moment. Hence, we will not be able to accede to your request to set up a body corporate to provide accounting services to your clients. The reason can be summarised below, supported by several relevant sections of the Accountants Act 1967 (the "Act") as amended by the Accountants (Amendment) Act 2001:-
Section 22 - Holding out as chartered accountant or auditor or tax consultant, states the following :-
No person shall unless he is registered as a chartered accountant under this Act and has his principal or only place of residence within Malaysia -
a.
practise or hold himself out as a chartered accountant, auditor, tax consultant, tax adviser or any other like description;
b.
adopt, use or exhibit the terms "chartered accountant", "auditor", "tax consultant", "tax adviser" or any other term of like description; or
c.
adopt, use or exhibit the term "accountant" or any other term of like description in such circumstances as to indicate or to be likely to lead persons to infer that he is a chartered accountant or that he is qualified by any written law to practise the profession of or is in practice as a chartered accountant.
Provided that nothing in this section shall operate to prevent an advocate or any person authorized under any other law for the time being in force in Malaysia from carrying on the work of a tax consultant or a tax adviser.
Section 18 on Prohibition (in as far as relevant) on members’ conduct also mentioned that :
Without prejudice to any other provisions of this Act or rules or by-laws no member shall -
a.
allow any person not being a member to practise in his name as a chartered accountant;
b.
be a director or a shareholder in a company incorporated under the Companies Act, 1965, or any other written law, being a company which carries on a business of auditing, nor shall he use a trade or association name under which to practise the profession;
c.
in any way, practise as a chartered accountant or licensed accountant other than -
i.
in his own name;
ii.
in the name or names of his partner or partners being chartered accountants or licensed accountants; or
iii.
in the name of a firm existing at the time of the coming into operation of this Act or formed thereafter provided that the partners in Malaysia are eligible to be registered as chartered accountants or licensed accountants;
Furthermore, Section 14(6)of the Act prohibits a body corporate from being eligible for membership of the Malaysian Institute of Accountants. This section effectively defines that a person as mentioned under Section 22 of the Act cannot be a body corporate.
Hence, based on Section 22 and Section 18(b) of the Act, it is obvious that an audit practice cannot be incorporated. As for other public practice services, unless specifically provided under any other written law (e.g.. Income Tax Act, 1967 - the position of which is not clear at present), a body corporate is not allowed to hold itself out as a chartered accountant providing such services, since the Act only provides for a natural person to do so when Section 22 and Section 14(6) are read together. Thus, by allowing you to register a body corporate with the name "ABC Accounting Solutions Sdn. Bhd.", you can be deemed to have contravened the Act under Section 27 - Penalty for misrepresentation by body corporate which reads as follows :
Any body corporate which, or any director, officer, or servant thereof who, does any act of such a nature and in such a manner as to hold-out that the body corporate is a chartered accountant shall be guilty of an offence and the body corporate shall, on conviction, be liable to a fine not exceeding twenty thousand ringgit and where the act is done by a director, officer or servant of the body corporate the director, officer or servant thereof shall also, on conviction, be liable to a fine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding one year and on a second or subsequent conviction to a fine not exceeding twenty thousand ringgit or to imprisonment for a term not exceeding two years.
In view of the above, the Malaysian Institute of Accountants would not encourage its members to incorporate companies providing auditing and other public practice services, unless another piece of legislation provides such other options.
Questions (as per letter dated 27 December 2001) :-
We would appreciate the assistance of the Institute to address the following technical enquiries. These enquiries relate to matters concerning KLSE Listing Requirements (KLSE-LR) and the Malaysian Code of Corporate Governance (MCCG).
1.
Composition of Board of Directors of Listed Company
Under Paragraph 15.02, Part B, Chapter 15 - Corporate Governance of the KLSE-LR, "a listed company is required to have at least 2 directors or one-third of the board of directors whichever is higher to be independent directors."
It is further stated, "If the number of directors of the listed company is not 3 or a multiple of 3, then the number nearest to one-third shall be used."
However, under Paragraph III - Board Balance, Part 2 of the MCCG, it is stated, "to be effective, independent non-executive directors need to make up at least one-third of the membership of the board."
The board of directors of our listed client comprises 7 board members, out of which 2 are independent non-executive directors. The board composition is in compliance with the KLSE-LR. However, the board composition is not in tandem with the Part 2 of the MCCG.
We wish to seek your clarification on which ruling should prevail under the above circumstances.
2.
Directors’ Interest in Shares
Under Section 169(6)(g), the Company is required to disclose in its Directors’ Report, the directors’ interest in shares.
As a listed company, our client has a number of institutional shareholders, for example, Permodalan Nasional Berhad, Tabung Haji and other institutional shareholders. Normally, these institutional shareholders will appoint their nominees as directors of listed company to protect their interest.
Under these circumstances, are these nominated directors deemed to be interested in the shares of the company and therefore warrant disclosure under Section 169(6)(g)?
Answers (as per our letter dated 23 January 2002) :-
1.
Composition of Board of Directors of Listed Company
In the event of a conflict between the Kuala Lumpur Stock Exchange (KLSE) Listing Requirements and that of the Malaysian Code of Corporate Governance (MCCG), the KLSE Listing Requirements shall prevail as this is a rule imposed by the KLSE on all public listed entities. In as far as the MCCG is concerned, it is, at present, a statement of best practices aspired from our corporate citizen. Hence, a heavier weightage should be assigned to the Listing Requirements.
Based on the scenario given in your circumstances, the appointment of the 2 independent non-executive directors are deemed in compliance with the KLSE Listing Requirements on the appointment of independent director. However, our Institute, in adopting an aggressive stance, is also of the opinion that Paragraph III - Board Balance, Part 2 of the MCCG has since been complied with, although the Code did spell out that independent non-executive directors need to make up at least one third of the membership of the board. This is, in our opinion, simply due to the effect of rounding the fraction to a meaningful number. However, should your client feel that there is an incongruence in the compliance with the MCCG, the option is to disclose this non-compliance within the Annual Report and elaborate the alternative to best practices adopted by your client inside the statement in relation to its compliance with the MCCG in their Annual Report.
2.
Directors’ Interest In Shares
Section 169(6)(g) provides for the disclosure in the Directors’ Report about an individual director’s interest in shares or debentures of the reporting entity as well as other related corporations as defined under the Act. Section 6A (4) and (5) further elaborate on the interpretations of a person that can be deemed to be interested in the shares of that reporting entity either through direct or indirect shareholdings.
A person who is elected to the Board of your clients as a nominee director will not usually be deemed to be interested in those shares held by the institutional investors that you mentioned such as Permodalan Nasional Berhad, Tabung Haji etc. (and hence, disclosure is not necessary), provided that the nominee director can demonstrate to be able to control the Board of Directors or management of the institutional investors either through shareholdings or other contractual arrangement, whether singly or acting with parties in concert at a level which can be considered as substantial in nature, and hence, able to influence the directions of the institutional investors’ entities.
Circular No. 13/99 sets out guidelines on Advertising for Sale of Assets by Insolvency Practitioners. It also provided a sample. The sample suggests that the firm’s logo should not be placed on the advertisement.
Under the present MIA By-Laws (A-9 and B-3), are we now allowed to place the firm’s logo on the advertisement?
Answer (as per our e-mail dated 28 January 2002) :-
We would respond to your query in the affirmative. With effect from 15 January 2002 and subject to the requirements in By-Law A-9 and By-Law B-3, the firm’s logo may be placed on any advertisement undertaken by the firm.
By-Law B-6.2 (1) states that "No member shall charge an unrealistically low professional fee." Furthermore, in its explanatory note, it is stated that a professional fee of less than Ringgit Malaysia Five Hundred (RM500.00) for audit services shall be considered as an unrealistically low professional fee. Please advise whether this applies to audit fees charged on a dormant company of RM300.00 in the past.
Answer (as per e-mail dated 7 March 2002) :-
If you look at the By-Law and the explanatory note together, it would appear that a dormant company is also covered under this By-Law since no exception is provided therein.
We wish to seek your clarification and advice on the following :
1.
A is our audit client since the date of incorporation.
2.
B is also our audit client from the date of incorporation until 1999.
3.
A is owing B RMxxx from 1998 until to-date.
4.
When we did the audit for B in 1998, A confirmed the balance outstanding. The confirmation slip is filed in B’s audit workpapers.
5.
To-date, A is still our audit client. B has changed to another auditor.
6.
Now, B is taking legal action to recover the debt. One director of B has made an oral request to obtain the original confirmation slip from us as proof of debt in court.
Please clarify and advise us on the following :
1.
Please clarify and advise us on the following :
2.
Must we agree or refuse B’s oral request?
Answer (as per letter dated 11 March 2002) :-
Our Institute’s Public Practice Committee had deliberated on the issue raised in your letter during a recent meeting. The Committee is of the opinion that the piece of audit confirmation which you obtained in the course of your audit of B is your own property. As such, how you actually deal with it should be based on your professional judgment. The possible areas to be considered include your agreement clause in your previous letter of engagement with B (how long you are supposed to maintain your file etc.) as well as the degree of audit assurance that you have obtained from that piece of confirmation vis-a-vis the audit opinion eventually. In certain circumstances, legal advice should also be sought prior to your disclosing such information to B.
Q30.
Member’s Ethical Code And Duty Of Care For Their Ex-Staff
Member’s Ethical Code And Duty Of Care For Their Ex-Staff
Question (as per e-mail dated 10 March 2002) :-
I have just graduated from the ACCA exams and expect to apply as a member of MIA as a non-practising chartered accountant. However, I have found some problems regarding my practical experience.
I worked for an accounting firm (which is registered with MIA) a few years ago for a period of 2 years. I have requested the firm to write a detailed testimonial for me since the date before I resigned, but till now, I have not received anything from the firm. I would like to ask whether the accounting firm has a duty of care to its ex-staff or is there any ethical code that the member/firm should follow in this matter? How can I solve this problem and obtain my detailed testimonial.
Answer (as per e-mail dated 22 March 2002) :-
There is no express provision in our By-laws on Professional Conduct and Ethics for a member/firm to issue a testimonial for an ex-employee. However, all our members have a general obligation and responsibility to respond to professional enquiries and correspondence expeditiously under By-Law A-7 of the Institute's By-Laws on Professional Conduct and Ethics [Revised January 2002]. Failure to do so is a breach of the By-Laws which can result in disciplinary action being taken against the member concerned if a complaint is lodged with the Institute.
We would suggest that you write to your previous employer requesting for your testimonial, and quote the above By-Law A-7 as a basis for your request to expedite the issuance of your testimonial.
If there is still no response from your previous employer, you are entitled to lodge a complaint in writing to the Registrar of the Institute together with a supporting statutory declaration, against the member/firm concerned. If found guilty of a breach of the By-laws, disciplinary action can be taken against the member/firm concerned. However, the Institute has no power to compel the issuance of the testimonial on your behalf.
I would like to seek your clarification/opinion on the following matter :-
I was a partner of XY & Associates from 1996 to 31 March 2002 and am currently practising solely under CK & Co. Since I obtained my audit licence, I have been signing the audit report for almost all the clients of XY & Associates who are based in Penang.
Recently, there is a verbal separation arrangement on the clientele as a result of me leaving XY & Associates and I believe that XY & Associates is now practising as a sole proprietor firm.
Some of the clients are maintaining XY & Associates as auditors while a majority of the clients are appointing my new firm as auditors. I understand that ultimately, the choice for the appointment of auditors lies with the client.
I would like to know whether the audit working papers (CAF & PAF) should belong to whom :-
(a) XY & Associates (b) Signing partner which is myself i.e. Mr. X (c) The auditors which the client intends to follow
K
indly let me have the opinion of the Council of MIA as soon as possible.
Answer (as per e-mail dated 16 April 2002) :-
It is the position of the Institute that the working papers (CAF & PAF) should belong to the continuing firm rather than the individual signing auditors.
Presently, our By-Law B-1.4 prohibits a member in public practice or his firm from accepting appointment as auditors or reporting accountant if he or his firm already provide other public practice services (in your case, internal audit services) to a company or any other entity where the provision of such non-audit services would create a significant threat to his or his firm’s professional independence, integrity or objectivity. The explanatory notes following this By-Law further elaborates on circumstances where such situation is not acceptable and no proper safeguard will be able to mitigate this professional independence threat.
In addition, By-Law A-2.1 (3) states that "A member in public practice shall be, and be seen to be, free in each professional assignment he undertakes, of any interest which might detract from objectivity. The fact that this is self-evident in the exercise of the reporting function must not obscure its relevance in respect of other professional work."
Hence, your firm should critically assess your position as a statutory auditor vis-a-vis your appointment as a consultant providing internal audit services. It is imperative that should a decision be taken by your firm in accepting such non-audit services, the decision should be properly documented with relevant supporting argument to preserve your firm’s overall independence policy. Such assessment should be conducted on an annual basis should there be a continuous reliance on the part of such client on your non-audit services.
Kindly note that our views expressed herein are intended to assist you solely on an ad hoc basis in resolving your inquiry. The views expressed are not the official opinion of MIA, its Council or any of its Committees. Advice given is provided gratuitously and without liablity. Neither MIA, its Council or any of its Committees nor its employees shall be responsible or liable for any claims, losses, damages, costs or expenses arising in any way out of or in connection with any persons relying upon the advice given.
Yours sincerely,
MALAYSIAN INSTITUTE OF ACCOUNTANTS HO FOONG MOI (MS) Executive Director
With reference to B-1-1(e) of the By-Laws (on Professional Conduct and Ethics), I wish to enquire whether members of the immediate family can be appointed as directors (not executive director) of a corporation providing secretarial services and whose employee is an officer of the company of which I am the auditor.
Answer (as per letter dated 8 May 2002) :-
Based on our Institute’s By-Law B-1.1(1), it would appear that there is no express prohibition for you to act as the auditor even though your immediate family member is appointed as a director of the secretarial company, albeit in a non-executive role. However, it is near impossible for the By-Law to cater for every single occurrence or circumstance imaginable. At the end of the day, you as the auditor are expected to observe the Institute’s overriding statement of integrity and objectivity in substance rather than merely follow the form of certain practices (By-Law A-2.1) :-
Members shall at all times be straightforward, honest and sincere in their approach to their professional work. Integrity implies not merely honesty but fair dealing and truthfulness by all members.
The principle of objectivity imposes the obligation on all members to be fair, intellectually honest and free of conflicts of interest. Members shall be fair in their approach to their professional work and shall not allow any prejudice, bias or influences of others to override their objectivity.
A member in public practice shall be, and be seen to be, free in each professional assignment he undertakes, of any interest which might detract from objectivity. The fact that this is self-evident in the exercise of the reporting function must not obscure its relevance in respect of other professional work.
We hope this is sufficient guidance for you on the issue of professional independence.
With reference to the above, kindly confirm the following :-
Definition of "Partner".
If an approved auditor acts as a non-executive independent director in Company A, can he act as an auditor in Company B where the director/shareholder of Company B is also the majority director/shareholder of Company A.
Can a member become the auditor of a company where the member of his immediate family is a company secretary? (Note : The company secretary is not a key management personnel of the company as defined under By-Law B-1.1 (2)).
Answer (as per facsimile dated 28 June 2002) :-
We refer to your facsimile forwarded to us on 26 June 2002 and to your queries therein.
We would like to respond as follows:
1.
The word "partner" is not defined in the Institute’s By-Laws (On Professional Conduct & Ethics) [Revised January 2002]. However, the word "partner" has the meaning as ascribed pursuant to the term "partnership" under the Partnership Act 1961.
2.
Based on the information provided by you, the approved auditor may be able to act as auditor for Company B unless Company A and Company B are deemed to be related to each other by virtue of section 6 of the Companies Act 1965. If there is such a relationship, the approved auditor cannot act as auditor for Company B, since he is also an officer of Company A. In any event, the auditor must at all times be guided by the spirit and intention of By-Law B-1, namely that the auditor must in fact and in appearance, be independent in carrying out the audit for Company B.
3.
By-Law B-1.1(1)(e)(i) of the By-Laws prohibits any member in public practice from taking on the appointment as the auditor of a company where any of the member’s immediate family (as defined in the By-Laws) is an officer of the company. An officer of the company is defined in the By-Laws as including those persons defined as an officer pursuant to section 4(1) of the Companies Act 1965. Under section 4(1) of the Companies Act 1965, an officer of the company includes the secretary of the company.
The Companies Act 1965 does not make any distinction between internal or external company secretaries. The duties and responsibilities of company secretaries as set out in the Companies Act 1965 are applicable to all company secretaries irrespective of whether they are appointed from within the company or appointed externally.
The exemption in By-Law B-1.1(2) of the By-Laws does not apply in this case, since the position of the company secretary is as an officer of the company and not as an employee of the company. The exemption in By-Law B-1.1(2) of the By-Laws only applies if any of the member’s immediate family (as defined in the By-Laws) is an employee who is not a key management personnel of the company.
The rationale behind the provision in By-Law B-1.1(1)(e) of the By-Laws is to ensure that there is no appearance of conflict of interest or lack of independence on the part of the Institute’s members who are appointed as auditors of companies. This is more so given the significant duties and responsibilities imposed on auditors pursuant to section 174(2) of the Companies Act 1965 particularly as set out in sub-paragraph (b) thereto, where an auditor is required to report on whether inter alia, the records and registers of the company (which fall within the purview of the company secretary) are properly kept in accordance with the provisions of the Act.
We trust that the above is of assistance to you.
Kindly note that our views expressed above are based on the limited information given to us and are intended to assist you solely on an ad hoc basis in resolving your query. The views expressed herein are not the official views of the MIA, its Council or any of its Committees. This advice is provided gratuitously and without liability. Neither the MIA, its Council or any of its Committees nor its employees shall be responsible or liable for any claims, losses, damages, costs or expenses arising in any way out of or in connection with any reliance upon the advice given herein by any person(s).
We would appreciate it very much if you could kindly advise us on the following matters:-
1.
Is the professional fee charged by a Public Accountant subject to certain rules, guidelines etc.?
2.
If the answer is no, then how are professional fees actually charged and as such are they done arbitrarily?
3.
We enclosed herewith some completed Audit Reports and the Invoices given. Could you please comment as to whether the sum charged is justified?
Thank you for your kind cooperation.
Answer (as per letter 11 July 2002) :-
Thank you for your letter dated 29 June 2002.
Our Institute’s By-Law B-6.1 on Fees & Commission provides that professional fees charged by members in public practice shall be a fair reflection of the value of the work performed for the client, and shall take into account inter alia -
(a)
the skill and knowledge required for the type of work involved;
(b)
the level of training and experience of the persons necessarily engaged on the work;
(c)
the time necessarily occupied by each person engaged on the work; and
(d)
the degree of responsibility and urgency that the work entails.
In addition, the following explanatory notes further emphasise the principle behind our By-Law B-6.1 :-
1.
In order to carry out the professional service for which he is engaged, a member in public practice must first consider the instructions of his client in conjunction with any statutory duty relating thereto and then discharge his responsibility by applying to the affairs of his client the professional skill and knowledge which he and his staff have acquired through training and experience.
2.
The member’s fees for that service should provide him with appropriate remuneration for the time and skill which he has personally devoted to his client's affairs and the responsibility he has accepted together with reimbursement of and a suitable margin of profit on his overhead expenses and the salaries of his staff for whose work he takes responsibility.
3.
Fees should therefore normally be computed by reference to the above factors (a) to (d).
4.
It is neither usual nor necessary for bills submitted to clients to be fully detailed but the member's records should be adequate to enable this to be done if required either to satisfy the client or in the unfortunate event of it becoming necessary to take legal proceedings to recover unpaid fees.
By-Law B-6.2 provides that the fees charged should not be unrealistically low and the Institute has taken the position that a professional fees of less than five hundred Ringgit for audit services provided to commercial enterprise shall be considered as unrealistically low professional fees. Furthermore, as per By-Law B-6.3(1), it is mentioned that in specific circumstances, where a member in public practice feels there are genuine grounds to propose a lower fee than another member undertaking the same or similar work (other than non-recurring or specialist work including management consultancy services), the member shall exercise due care to ensure that the lower fee is in line with the provisions of By-law B-6.1 above.
We are pleased to enclose herein a set of our recommended (as opposed to mandatory) basis for determining audit fees which may give you some basic idea of the process of fees determination by our members in public practice.
However, we regret to inform you that it will not be possible for the Institute to comment on Question No. 3 of your letter, namely whether the sum charged by your auditor is justified or otherwise. This is simply because, the function of fees as we mentioned earlier in this letter will consist of those elements as elaborated above, namely the skill and knowledge required for the type of work (details of which we have no access to), the time that was taken to complete the work involved, as well as the degree of urgency of the assignment that was carried out as requested by the client, etc.
We hope the above will be able to clarify some of your concerns when dealing with our members.
Q37.
Submission of the Accountants Report for Solicitor’s Clients Accounts
Submission of the Accountants Report for Solicitor’s Clients Accounts
Question (as per letter dated 20 September 2002) :-
We refer to an article entitled "Solicitor’s Clients Accounts" published in Volume 15, Number 7 (page 9) of the Akauntan Nasional August 2002 issue. It was mentioned that the submission of the Accountants Report for the Solicitor’s Clients Accounts to the Bar Council is only applicable to lawyers practising in the Peninsular only.
Please clarify on whether lawyers that have office branches in Peninsular and East Malaysia, but maintain all the client’s accounts in the bank accounts that were opened in East Malaysia, are they required to submit the Accountants Report on the Solicitor’s Clients Accounts to the Bar Council in Peninsular Malaysia.
Answer (as per letter dated 6 November 2002) :-
We refer to your letter dated 20 September 2002 on the above matter.
The Bar Council clarified that, so long as solicitors have branch offices of their practice/firm located in Peninsular Malaysia, they are required to submit the Accountants Report for their clients’ accounts irrespective of whether the clients’ accounts are operated in East Malaysia only.
As a proprietor of a non-audit firm, do I need to subscribe for the Professional Indemnity Insurance coverage?
Answer :-
Yes, you have to. Under By-Law 23-3, every member in public practice is required to have a minimum coverage of RM100,000 per annum. Your annual subscription in this situation will normally not exceed RM100 per month.
Q39.
Signing of Statutory Declaration in Relation to Accounts Under Paragraph 9.27 of the KLSE Listing Requirements
Signing of Statutory Declaration in Relation to Accounts Under Paragraph 9.27 of the KLSE Listing Requirements
Question :-
Can a person who is not a member of the Malaysian Institute of Accountants (MIA) sign the statutory declaration in relation to accounts under Paragraph 9.27 of the KLSE Listing Requirements?
Answer :-
Yes, a person who is not a member of MIA can do so, provided that he or she has at least 3 years’ working experience and
a.
has since passed the examinations from local institutions of higher learning recognised under the Accountants Act, 1967 or
b.
is a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967 as follows :
i.
Malaysian Association of Certified Public Accountants;
ii.
Institute of Chartered Accountants of Scotland;
iii.
Institute of Chartered Accountants in England and Wales;
iv.
Institute of Chartered Accountants in Ireland;
v.
Association of Chartered Certified Accountants (United Kingdom)
vi.
Institute of Chartered Accountants in Australia;
vii.
Australian Society of Certified Practising Accountants;
viii.
New Zealand Chartered Accountants;
ix.
Canadian Institute of Chartered Accountants;
x.
Institute of Chartered Accountants in India; and
xi.
Chartered Institute of Management Accountants (United Kingdom)
I wish to inform that I shall be retiring from public practice not later than June 2003. Accordingly, please confirm whether I will be exempted from practice review..
Answer (as per memo dated 29 January 2003):-
We refer to your letter dated 24 January 2003 with regard to the above matter.
Presently, our selection will cover all the audit firms registered with our Institute. As long as you have ceased public practice and you are no longer a partner or proprietor of any firm, you will not be subjected to practice review simply because you will not be selected at all. Only proprietors with firms registered with the Companies Commission of Malaysia and our Institute will eventually be reviewed throughout the cycle of 5 years.
Question (as per fax from XYZ & Co. dated 18 January 2002) :-
We have been approached by a listed company to be their auditors for the financial year ended 31 December 2001.
Two existing partners of our current firm are also partners of another audit firm, ABC & Co. together with Mr. M. Mr M who resigned from the ABC & Co. partnership on 31 October 2001 is a non-executive director of this listed company but was never a partner of our firm, XYZ & Co.
In order for XYZ & Co to be seen to be independent, we propose to take up the audit assignment jointly with another independent firm of auditors, LN & Associates.
Kindly advise us as to whether we can take up this audit appointment without contravening any MIA regulations or the Companies Act, 1965 provisions.
Answer (as per our letter dated 25 January 2002) :-
In as far as By-Law B-1.3 (1)(c) is concerned, a member in public practice or his firm shall not knowingly accept appointment as auditor or reporting accountant of a company or other entity if he is or was, within the period concerned or within the preceding period of 12 months been an officer or employee of the company or other entity or if he is or wasapartner of or in the employment of an officer or employee of the company or other entity, among other things. In addition, By-Law A-2.1 provides that :-
A member in public practice shall be, and be seen to be, free in each professional assignment he undertakes, of any interest which might detract from objectivity. The fact that this is self-evident in the exercise of the reporting function must not obscure its relevance in respect of other professional work.
Looking at the two significant By-Laws as elicited herein, it appears unacceptable for ABC & Co. to accept the appointment from the listed group since the partner Mr. M is an officer of the listed group, albeit as a independent non-executive director. The fact that there exist two common partners between ABC & Co. and XYZ & Co. effectively precludes the latter firm from accepting the assignments as the appearance of independence is of equal emphasis here, notwithstanding that both firms are operating independently of each other.
Hence, your current contention is that the listed group will appoint the firm of XYZ & Co. together with another firm of independent auditors, i.e. LN & Associates to be the joint auditors to reduce the possible threat to your professional independence. This, we believe, is to enable an effective safeguard to be put in place so that the issues on professional independence is not compromised in any event. Having read the Explanatory note as provided after By-Law B-1.3, it appears that measures can be taken by firms to reduce the threat to their independence where applicable. In fact, such safeguards must be clearly spelt out where necessary. Thus, provided that the joint auditors LN & Associates are able to discharge their duties without compromise to their position as joint auditors (here, it is always a question of fact whether the joint auditors have conducted themselves independently or able to conduct themselves independently during the course of the joint audit), such arrangement if put in place, should be acceptable. But, as professionals, both firms must seriously evaluate their position vis-a-vis the joint audit before coming to the conclusion that the threat to independence has since been properly dealt with.
'A' is a member firm in practice (non-audit) in town X.
'B' is a member firm in practice (audit) in town Y.
XYZ Sdn Bhd in town X appointed B as the auditor. A carries out the audit work. B reviews the audit files and prepares the audit report.
B bills A for time cost.
A bills XYZ Sdn Bhd the audit fee.
Does the above arrangement contravene the By-Laws or the like?
Answer (as per e-mail dated 27 October 2003):-
1.
By-Law B-2.2(4) of the Institute’s By-Laws (On professional Conduct and Ethics) on Method of Practice prohibits a member in public practice to report or express an opinion on financial statements examined for the purposes of such report or opinion, by a person other than a member of his firm or of his staff, unless such other person is also a member in public practice.
2.
Similarly, By-Law B-6.5(1) of the Institute’s By-Laws (On professional Conduct and Ethics) on Fees and Commissions prohibits a member in public practice from allowing (whether directly or indirectly) the participation of any person in the fees of his professional work, unless that person is another member in public practice.
3.
Whilst the above By-Laws allow for an auditor (in this case B) to render an audit report based on the examination of the financial statements by another member in public practice (in this case A), such arrangement must nevertheless be in accordance with the Malaysian Approved Standards on Auditing, particularly AI 920.
4.
AI 920 - Engagements to Perform Agreed-Upon Procedures regarding Financial Information, would require the engagement of A (non-audit firm) to carry out agreed upon procedures with the clear understanding and consent of the client (XYZ Sdn Bhd) regarding these agreed procedures and conditions of the engagement. In doing so, A must also comply with the provisions of AI 920, the ethical principles as set out in the IFAC Code of Ethics, and the terms of the engagement. The terms of the engagement must clearly set out the nature, timing and extent of the procedures to be undertaken by A, the financial information involved etc. (see paragraph 9 of AI 920).
5.
As auditor, B must ensure that there is compliance of B’s duty of confidentiality to XYZ Sdn Bhd pursuant to By-Law A-5.2 of the Institute’s By-Laws (On professional Conduct and Ethics) on Confidentiality, which prohibits the disclosure of information received or acquired by B in the course of his professional work (as auditor of XYZ Sdn Bhd) except where the consent of the client (in this case, XYZ Sdn Bhd) has been obtained. Under this requirement, XYZ Sdn Bhd must expressly consent to the disclosure of any information relating to the financial statements of XYZ Sdn Bhd by B to A for the purpose of enabling A to carry out the engagement to perform agreed-upon procedures.
6.
B must also ensure that since B is signing the audit report, B (and for that matter, A) has complied with all other applicable Malaysian Approved Standards on Auditing, including AI 220 on Quality Control, AI 230 on Documentation, AI 500 on Audit Evidence etc.
7.
As for the issue of the audit fees, audit fees can only be charged to XYZ Sdn Bhd by B (the audit firm) and not A (the non-audit firm). By allowing A to bill XYZ Sdn Bhd the audit fees, B is effectively assisting A to hold itself out as an audit firm or auditor, which is in contravention of the Accountants Act 1967 and/or the Companies Act 1965.
Kindly note that our views expressed above are based on the limited information given to us and are intended to assist you solely on an ad hoc basis in resolving your query. The views expressed herein are not the official views of the Institute, its Council or any of its Committees. This advice is provided gratuitously and without liability. Neither the Institute, its Council or any of its Committees nor its employees shall be responsible or liable for any claims, losses, damages, costs or expenses arising in any way out of or in connection with any reliance upon the advice given herein by any person(s).
We would like to enquire about the appointment of auditors (owned by Mr. A & Mr. B) by a group of companies belonging to a director-cum-shareholder who is a brother to Mr. A. Under the by-law, kindly let us know whether that audit firm is qualified as the soon-to-be auditors for the group of companies on the condition that Mr. B is going to sign the auditors' report and not Mr. A.
Answer (as per e-mail dated 6 February 2004)
We refer to your e-mail with regards to the above matter.
By-Law B-1.3 (1) prohibits an arrangement as you have mentioned below unless :-
1.
the interest held by the immediate family member does not give rise to a significant threat to the professional independence , integrity or objectivity of the firm ; AND
2.
there are appropriate safeguards in place that will effectively AND adequately preserve the professional independence, integrity or objectivity of the member and / or his firm
Please see By-Law B-1.3 (2) for further information.
There are two MIA members who joined us two years ago with the aim of becoming partners of our firm upon acquisition of audit licence. There two gentlemen are in the midst of applying for an audit licence under Section 8(1) of the Companies Act, 1965. As they have not possessed the audit licence, Form 5 (Return of Partners of Firm of Auditors) has not been filed in this respect. As such, they are not permitted to sign audited accounts. However, they are given a profit sharing in the firm and as such an agreement has been drawn to effect his arrangement. The aggrement contains the following characteristics: The profit sharing ratio of each partner; The terms and conditions; The amount of goodwill that the two gentlemen are required to pay to the existing partners. Please advise if the above arrangement has breached the Companies Act, 1965 and any of the MIA By-Laws.
Answer (as per our letter dated 18 May 2004)
We refer to your letter dated 25 March 2004.
Please take note that for the purposes of Section 9(4) of the Companies Act, 1965, it is stipulated that partners of the firm who are residents of Malaysia must be approved company auditors. Any arrangement which appears to override this provision may be viewed as a breach of the Companies Act. In addition, the Public Practice Committee of the Institute is of the opinion that such arrangements as mentioned in your letter may not be considered as acceptable by the Institute.
As a matter of practice, the firm can certainly work out certain incentive packages such as in the form of bonuses which would be able to fairly compensate the effort of your two (2) potential partners pending their successful application for their audit licences.
Kindly note that our views expressed herein are intended to assist you solely on an ad hoc basis in resolving your inquiry. The views expressed are not the official opinion of MIA, its Council or any of its Committees. Advice given is provided gratuitously and without liability. Neither MIA, its Council or any of its Committees nor its employees shall be responsible or liable for any claims, losses, damages, costs or expenses arising in any way out of or in connection with any persons relying upon the advice given.
Can a person holding a valid practicing certificate and an audit licence also work as a manager in a trading company dealing with herbal supplements?
Answer No. Under Rule 9 (7) of the Institute’s (Membership & Council – Rules) 2001, it is provided that:-
7.
(a)
A member who-
(b)
does not engage in public practice or undertake any public practice service full time,
shall automatically cease to have a valid practicing certificate and the member shall return his practicing certificate to the Institute within fourteen days from the date of cessation for cancellation of the said certificate.
There is also a condition being set by the Ministry of Finance (MOF) for approved auditors which states that an applicant is required to be in full time practice as an auditor.
Does the Institute’s By-Law allow an audit firm to discontinue the current year’s audit if there is an outstanding audit fees from previous year? This is of course on the assumption that we have not tendered in our resignation as the statutory auditors to date.
Answer We would like to highlight here that By B-8.4(1) on Changes in Professional Appointments states that a member in public practice who is an existing auditor may decline re-appointment if that particular client has not paid the auditor or any previous auditor of that particular client, the fees due on the statutory audit of the financial statements of the client for two consecutive financial years.
Please be informed that there is no provision in the By-Law which allows the firm to discontinue the current year audit if there are outstanding fees. If there are outstanding fees, the firm should decline re-appointment as auditor in the annual general meeting of the company but if the firm decides to accept the re-appointment, the firm has a statutory duty to complete the statutory audit.
We also wish to highlight that the new By-Law B-1 on Professional Independence has a provision on Fees – Overdue, which states that a self-interest threat may be created if fees due from an assurance client for professional service remain unpaid for a long-time and safeguards should be applied to reduce the threat to an acceptable level.
Can a member who is holding a valid practicing certificate, venture into other business, e.g. set up a restaurant, in the capacity of both director & shareholder?
Answer
A member who is a holder of a valid practising certificate may venture into other businesses in a capacity of both director and shareholder provided that:
1.
He is not the Executive Director of the Company i.e. he does not get involved directly in the day to day management of the business
2.
He does not neglect his full time audit/ accounting practice; and
3.
He need to ensures that his clients do not raise complaint againts him due to him neglecting his full time practice.
Q49.
Exemption of requirement of auditors and company's secretary
Exemption of requirement of auditors and company's secretary
Question
Is the new Companies Act which is going to be introduced next year (2006) going to exempt the requirement of private companies to appoint qualified auditors and secretary?
Answer
The reform of the Companies Act, 1965 is currently being undertaken by the Corporate Law Reform Committee of the Companies Commission of Malaysia (CCM). The scope of the law reform initiative can be found in the Strategic Framework released by the CCM last September. A copy of the Framework can be found on the CCM website- www.ssm.com.my.
Whilst we believe that one of the stated objectives of the law reform is to reduce compliance costs, the Institute is not in a position to advise on the whether or not the requirement of having auditors and company secretaries for private companies will be exempted. As is indicated in the Framework, any proposed change to the law will be made upon consultation with all affected parties. The Institute will inform and consult members accordingly when the consultation papers are issued by the CCM.
We have a client where its’ audit has been suspended for a period as they failed to provide the necessary documents for our verification. In addition, we also noted the company is currently involved in certain legal cases and may not operate on a going concern basis. In order to safeguard our interests on fee recovery we intend to propose for an advance payment before we continue with the audit. Should the advance payment not be forthcoming we may not proceed with the audit.
In this circumstances, we should be obliged if you could advise us whether this is in line with MIA’s By-Laws (on Professional Conduct and Ethics).
Answer
The clarification below is based on the limited fact as provided.
Firms are allowed to prioritise their work to match their revenue with whatever resources they have in their disposal. Hence, there should not be an issue of asking for an advance to proceed with whatever works that is on hand.
However, should the advances being not forthcoming, the firm can always opt to resign (rather than prolong it's exposure in further works without pays) and sue for the fees outstanding up to the date of resignation, provided that there was no dispute on the fees in the first place. However, the firm may want to note that it's option, at this stage, will normally be very much limited to what the company can afford, if at all.
I am based in Kuala Lumpur and all the accounting records are maintained in Kuala Krai, Kelantan. As the head of the accounts department, I cannot deny that I don’t know what is happening in the Company. There are some “questionable” transactions, by which I don’t agree. Anyway, I have been requested to present the financial statements during the Audit Committee and Board of Directors’ meeting.
The argument given by the former and present chairman is that I am not required to sign the audited accounts / make statutory declaration on the financial statements, whereby it is done by a Non-independent Non-Executive Director.
Please advise via email on whether or not I can be charged for any wrongdoing as the head of accounts department even though I acted on instructions.
Answer (as per e-mail dated 18 July 2005)
The Institute’s By-Laws (On Professional Conduct and Ethics) state that a member in accepting or continuing a professional assignment or occupation, shall always act with integrity, objectivity, independence and impartiality. These fundamental principles form the basic tenets of ethical and professional conduct of all the members.
The members of the Institute are also expected at all times to be straightforward, honest and sincere in their approach to their professional work and not allow any prejudice, bias or influences of others to override their objectivity.
In view of the above and in addressing your question as to whether you can be charged for any wrongdoings even if you acted on instructions, we would like to advise you that you may be in breach of the Institute’s By-Laws, notwithstanding the fact that you were acting on instructions. Acting on instructions from the management and/or your superiors do not absolve your actions and the possible breach of the relevant provisions in the Institute’s By-Laws. If a complaint is lodged against you, the Investigation Committee of the Institute will have to investigate the matter and determine whether there is a prima facie breach of the Institute’s By-Laws.
We would like to suggest that when faced with a significant ethical conflict, you should raise your concerns with your immediate superior and if the immediate superior is involved, in which case the problem should be raised with the next higher managerial level. This would show that you tried to remedy the situation by raising your concerns to the relevant parties. It would also be helpful to have your concerns documented and supported with the relevant evidence.
As a matter of policy, the Institute disclaims responsibility for any comments or statement by any of its staff. The views expressed are based solely on the limited information given to MIA and are intended to assist members solely on an ad hoc basis in resolving members’ enquiries. The views expressed are not the official opinion of MIA, its Council or any of its Committees. Advice given is provided gratuitously and without liability. Neither the MIA, its Council or any of its Committees not its staff shall be responsible or liable for any claims, losses, damages, costs or expenses arising in any way out of or in connection with any persons relying upon the advice given.
Q52.
What is Financial Statements Review Committee?
What is Financial Statements Review Committee?
FSRC, a committee established by the Council, monitors the quality of financial
statements that are prepared by or are the responsibility of members of the Institute for the purpose of determining compliance with statutory
and other requirements, approved accounting standards and approved auditing standards and practices.
Q53.
What is the FSRC scope of reviewing the financial statements?
What is the FSRC scope of reviewing the financial statements?
The FSRC will review
financial statements of all enterprises that are prepared or are the
responsibility of members of MIA, i.e. of public listed companies, non-listed
companies, non-listed public companies, private limited companies and the public
sector business enterprises.
The Committee is also responsible for reviewing the interim financial
information and statements referred to the Committee by the Investigation
Committee of MIA and/or regulatory bodies such as the Securities Commission,
Bursa Malaysia, Suruhanjaya Syarikat Malaysia, Bank Negara, etc.
Besides that, the FSRC, if required, will also pursue a review on matters of
public interest which would have been reported in the financial press and/or in
the press releases issued by the regulators/other relevant parties. Issues may
relate to financial reporting of companies or conduct of the auditors.
Q54.
Where can I get the compilation of Common Findings of FSRC?
Where can I get the compilation of Common Findings of FSRC?
Through circular to members or feature article in the Institute’s magazine.
Members of the Institute can also download the common findings through Institute website by clicking
here.
Q55.
Is there any penalty imposed by FSRC for any non-compliance?
Is there any penalty imposed by FSRC for any non-compliance?
Yes, the Committee does impose a penalty tariff, which went into effect in 2007.
The tariff is divided into three categories. Categories of penalty differentiate the severity of non-compliances. Click
here for details.
It provides an
alternative pathway into MIA admission for graduates who do not posses a
qualification recognised under Part I and Part II of the First Schedule
Accountants Act 1967.
An individual shall only be eligible to sit for the MIA QE if he possesses:
i)
qualification relating to accounting, business or finance recognised by the Public Service Department or other qualifications approved by the MIA Council. The qualification should not be any lower than a first degree.
ii)
accounting content in the said qualification is at least 60 per cent of the total qualification.
Section 15A(1) of
the Accountants Act states that the MIA QE shall be conducted by the Examination
Body that is from the Higher Educational Institutions specified in Part I of the
Third Schedule or the Recognised bodies specified in Part II of that Schedule.
Part I of the Third Schedule consist of the following universities:
a)
Universiti Malaya
b)
Universiti
Kebangsaan Malaysia
c)
Universiti
Teknologi MARA
d)
Universiti Utara
Malaysia
e)
Universiti
Putra Malaysia
f)
Universiti
Islam Antarabangsa
g)
Universiti Sains
Malaysia
Part
II of the Third Schedule refers to:
The recognised body for the purpose of section 15A(1) is the
Malaysian Institute of Certified Public Accountants.
Q7.
Where can the candidates apply for the MIA QE ?
Application form
can be obtained from the Institute or downloaded from the MIA website,
www.mia.org.my under the
Qualifying
Examination Link. Application can also be made online, however, you
are still required to submit the hardcopy of the application form together with
the supporting documents which are certified true to the Institute.
Q8.
Are private institutions allowed to conduct preparatory courses to prepare students for the MIA QE?
Are private institutions allowed to conduct preparatory courses to prepare students for the MIA QE?
At present, MIA has not authorised or approved any party or institution to
conduct preparatory courses for the purpose of the MIA QE. It is based on
self-study. MIA provides guidelines, syllabus, pilot papers and past years Q & A
that can be downloaded from MIA website.
Yes, new applicants may register online. However, the Institute would still
require applicants to submit hardcopy of the application form with all the
required documents.
i)
Application for candidacy
a.
Processing fee : RM100.00 (non-refundable)
b.
Candidacy fee : RM200.00 (valid for 2 years from the date of approval
issued by the Examination Committee as stated in the Certificate of
Candidacy)
Interested applicants are requested to submit the
application form for candidacy together with the processing and
candidacy fees amounting to RM300/- to MIA. For those whose applications
are rejected by the Examination Committee or withdrawn by the
applicants, MIA will refund the candidacy fee of RM200.00.
Q11.
Is there any time limit for the candidates to complete the MIA QE?
Is there any time limit for the candidates to complete the MIA QE?
Yes. Candidates are expected to complete all four papers within four years from
the date of the first Certificate of Candidacy. Candidates who are unable to
complete all four papers within the first four year period may apply for
extension of time to complete the examination provided that the candidates have
passed one paper within the first four years of the candidacy. The candidates
shall be allowed to renew their Certificate of Candidacy with the prescribed fee
for a further extension of two years and are required to complete the remaining
paper(s) within the next four consecutive examination sittings.
If the candidates fail to complete all four papers within six years they would
be required to re-take all four papers without considering the number of paper(s)
that the candidates have passed.
Upon completion of all 4 papers, successful candidate will be issued a
Certificate of Successful Completion from MIA. To qualify for MIA membership, in
addition to obtaining the said certificate, he/she would need 3 years of
relevant experience in areas related to accounting.
Q13.
If I did not sit for the paper which I have registered, will my exam fee be refunded?
If you request to withdraw from an examination before the closing date of acceptance of entries, you will obtain certain percentage of refund of the fee paid. Please refer to the Examination Guidelines on the amount entitled for the refund.
If you request to withdraw from an examination after the closing date for acceptance of entries, you will not be entitled to any refund of the fee paid. However, the Examination Committee may grant a refund to a candidate:
(i) on receipt of satisfactory medical evidence by reason of illness; (ii) in such other circumstances as the Examination Committee may deem fit.
The MIA QE Assessment is the new assessment methodology for the MIA Qualifying Examination (QE) system which comprises workshop evaluations (40%) and final examination (60%). Candidates are required to attend and participate in the workshop evaluations before they can sit for the final exam.
Q18.
When are the closing dates to register for the MIA QE Assessment?
Candidates are required to register for the workshops and examination at least 4 months before the examination month. The closing dates for both registrations are as follows:
(i) March sitting – 30 November of the previous year (ii) September sitting – 31 May of the current year
Q19.
How the candidates can register for the MIA QE Assessment?
Candidates are required to submit the workshop and examination registration forms with the required fees to MIA. The form can be downloaded at www.mia.org.my or can be obtained from MIA offices.
Q21.
How many times candidates need to attend the workshops?
The candidates are required to attend for four workshops for each registered paper e.g. Business & Company Law = 8 hours per workshop X 4 workshops = 32 hours.
(i) Kuala Lumpur – venue to be confirmed (ii) MIA Regional Offices in Johor Bahru, Penang, Kota Kinabalu and Kuching
*minimum required numbers – 10 pax
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