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Include Left Members Area Practising in Malaysia
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Introduction: Setting Up A Practice In Malaysia
Setting up Public Practice
Public practice is governed by
the Act, the Rules and the By-Laws (On Professional
Ethics, Conduct and Practice) of the
Institute.
Under the Act, the person must be a member of the Institute,
and is prohibited from public practice through a body corporate save where this
is allowed by other statutes for limited areas of public practice, namely
tax.
A member, in most instances, is allowed to be engaged in public
practice as a sole practitioner or in partnership only with another member(s) as
the Act and By-Laws prohibits the sharing of profits with non-members. All firms
in public practice are described as firms of chartered accountants (or licensed
accountants, where applicable).
Only members registered as chartered
accountants with valid practising certificate can describe and hold themselves
out as chartered accountants in public practice and are able to set up firms
providing public practice services. Members in public practice may carry out
public practice services such as accounting, audit, liquidation, tax and other
related services. However, the practice of audit, liquidation and tax are
licensed under other legislation.
Members also have to have their
principal or only place of residence in Malaysia to be in public practice in
Malaysia.
Members who wish to set up a practice must first obtain the
approval of the Institute on the use of the firm's name. It should not be a
trade or association name. Upon the setting-up of his firm, the practice must be
registered with the Institute.
Accounting
No additional
licensing requirements are needed but members who do not posses an audit licence
(issued by the Accountant General's Office) can only register their firms as
non-audit firms.
Audit
To be an
auditor a member must be in possession of an audit licence
granted by the Accountant General’s Office Pursuant to the
Companies Act 1965.
The requirements for applying
audit licence are as follows:-
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1. |
Is a member of the Malaysian Institute of Accountants (MIA)
under the Chartered Accountant category. In addition, the
applicant has to be a member of the MIA for at least one (1)
year. |
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2. |
Possess a valid Practising Certificate issued by MIA. |
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3. |
Possess sufficient working experience in audit practice in a
public accounting firm: |
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a. |
The candidate must have at least 5 years of working experience
prior to application. The 5 years accumulative working
experience can be obtained prior to and/or after becoming a
Chartered Accountant of the MIA. |
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i. |
Atleast 3 years must be in audit work. |
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ii. |
At least 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. |
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b. |
Candidates who have left audit practice, but still within a 3
year period prior to the application to be approved company
auditors, are still eligible to apply. |
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c. |
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. |
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4. |
Candidates are required to attend the “Public Practice Programme”
organised by the MIA. |
Liquidation
To be a liquidator, an individual
has to possess an audit licence for at least one(1) year and have passed an
interview conducted by the Accountant General's Office. Licences are issued by
the Accountant General's Office pursuant to the Companies Act,
1965.
Tax
The issuance of a licence to be a tax agent is
governed by the Income Tax Act, 1967.
A licence is only granted after the
applicant has passed an interview conducted by the Inland Revenue
Board.
The practice of taxation may be carried out under a body
corporate. However, it has to be established as a separate entity from that of a
public practice and may not be referred to as a tax consultant or tax adviser.
Only members who hold themselves out as chartered accountants with valid
practising certificates may use these descriptions under a sole proprietorship
or a partnership. A body corporate cannot be described as chartered accountants
and it cannot be registered as a member firm of the Institute.
Other
Related Services
Other related services include management
consultancy and corporate services such as secretarial services. Where these
services are provided under the same accounting firm or tax firm or audit firm,
no new licencing requirements is required.
However if a member carries
out management consultancy and certain corporate services other than secretarial
services, he/she will be required either to incorporate a limited liability
company pursuant to the Companies Act, 1965 or practise as a sole proprietorship
or partnership pursuant to the Registration of Businesses Act, 1956.
A
chartered accountant without a valid practising certificate may set up a
corporate entity to provide management and corporate consultancy services but he
or she cannot be registered as a member firm of the Institute and should not
hold himself or herself out as a chartered accountant when describing his or her
corporate activities. The company is also not allowed to describe itself as an
entity of chartered accountants.
Compliance with
Legislation
It is incumbent upon members who are in practice to have
the requisite knowledge and to comply with all the ethical and statutory
requirements. The statutory enactments and the subsidiary legislations passed
pursuant to the powers provided under the respective Acts should be referred to
consistently. The following Acts and the subsidiary legislations thereto should
be referred:
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The Accountants Act, 1967 (as amended) |
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The Institute's (Membership and Council) Rules
2001 |
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The Institute's (Disciplinary) Rules 2001 |
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The Institute's Qualifying Examination Rules 2001 |
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The Institute's By-Laws (On Professional Ethics, Conduct and
Practice) (as amended and revised from time to time) |
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The Companies Act, 1965 |
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The Income Tax, 1967 |
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The Service Tax Act, 1975 |
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By-Laws of the Local Authorities |
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Employment Legislation |
In addition members should be aware of legislative requirements of
specific services provided by the practice such as the recruitment of personnel
requires the practice to be licensed under the Private Employment Agencies Act,
1981. Generally members should keep themselves informed of current laws and
applicable legislation relevant to their practice and work.
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