Definition of Public Practice

What is public practice?

Public Practice is the term used to describe accountancy firms that are operated by individuals in sole proprietorship or groups of individuals in partnership.

Services requiring accountancy or related skills performed by a professional accountant in public practice including:

(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;
(k) such other services as the Council may from to time prescribe.

Mode of Operation and Conduct of Public Practice

Public practice is governed by the Act, the Rules and the By-Laws (on Professional Conduct and Ethics) 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 except where it is allowed by other statutes for limited areas of public practice, such as provision of tax services, corporate secretarial services and even as investment advisors.

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).

A member may also establish a branch office to carry out public practice services but the branch office must be managed by a member of MIA.

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 the firm, the practice must be registered with the Institute.

All firms registered with MIA are required to update their records with MIA by submitting an annual return on particulars of their firm and branch / branches (where applicable) on a yearly basis. Submission of the annual return to the Institute is mandatory.

* This does not applies to companies limited by shares or “Sendirian Berhad” since they are registered with the Companies Commission of Malaysia (SSM)

Public Practice Pathways in Malaysia

Guidelines (setting up firms, PII, Audit / Liquidator Licensing, etc)

Guidelines for Tax agent licensing

Other professional service providers licensed by the respective regulators:

Guidelines for Service Tax

The Service Tax Act 1975 together with Service Tax Regulation 1975 requires firms and all companies that provide accounting, auditing and taxation services to obtain a Service Tax Licence.

The rate of the service tax is 5% on the value of the services rendered. Professional services provided by a company to companies within the same group will be exempted from the current service tax of 5%.

Application for Service Tax Licence shall be submitted to the Royal Malaysian Customs & Excise Department.