NEWS

 

TITLE: Keynote Address by En Mohd Muazzam Mohamed, Chairman Islamic Finance Committee, Malaysian Institute of Accountants at The MIA Islamic Finance Textbook launch

DATE: 17/01/2020

KEYNOTE ADDRESS BY

EN MOHD MUAZZAM MOHAMED

CHAIRMAN ISLAMIC FINANCE COMMITTEE

MALAYSIAN INSTITUTE OF ACCOUNTANTS

AT

The MIA Islamic Finance Textbook launch

17 January 2020 (Friday), Kuala Lumpur

  • Dr Nurmazilah Dato’ Mahzan, Chief Executive Officer, Malaysian Institute of Accountants
  • Malaysian Accountancy Research and Education Foundation (MAREF) Board of Trustees
  • Members of the MIA Islamic Finance Committee
  • Ladies and Gentlemen
  1. Good morning and welcome to the launch of the MIA Islamic finance accounting textbook. On behalf of the MIA Islamic Finance Committee, thank you all for coming.
  2. Just to share a little background: The Islamic Finance (IF) Committee was established in 2009 by the MIA to promote Islamic finance through various initiatives - such as multi-stakeholder collaborations to drive the adoption of IFRS and international harmonisation of standards. The Committee also aims to support the government’s commitment to advance Islamic Finance as a significant part of the Malaysian economy and a source of global competitiveness and differentiation for the nation.
  3. Today, thanks to concerted efforts by many stakeholders, Islamic finance continues to expand within the Malaysian economy. In August 2019, the Bank Negara Malaysia (BNM) Governor was reported to have said in the media that Islamic financing accounted for 34.1 per cent of total financing compared to 14.9 per cent in 2008 while Islamic banking assets comprised 31.4 per cent of total banking assets against 14 per cent in 2008.
  4. Meanwhile, RAM Ratings in its latest annual edition of Islamic Banking Insight, reported that Islamic financing is “still anchoring the growth of the overall Malaysian banking sector”. RAM statistics showed that Islamic banking continued to expand at a much faster pace than conventional loans in 2018, recording 11.0% growth compared to conventional loans’ 3.3% growth.
  5. To help drive greater growth and maximise Malaysia’s potential in Islamic finance, the MIA Islamic Finance Committee is committed to developing competencies, through upskilling talent and empowering knowledge. Earlier, Dr. Nurmazilah spoke about upskilling talent through the MIA Mini Pupillage Programme. This textbook meanwhile is designed to enrich our collective knowledge base.
  6. MIA believes that this textbook which is comprehensive and thorough will be very useful in helping Islamic finance institutions (IFIs) to improve their financial reporting and disclosure, which in turn will support IFIs in discharging ESG obligations. In fact, BNM is now championing VBI or value-based intermediation - where IFIs are encouraged to assess how they create value and impact beyond profit, such as in encouraging sustainable business practices and greening of the economy to fight climate change. Better transparency through better reporting can help IFIs assess their impact and subsequently rewire their culture and practices to become more value-driven.
  7. We also pray that this textbook can be a tool for the greater harmonisation of Islamic finance practices and reporting across the globe, and enable greater transparency and trust in the institutions that practice and sell Shari’a-compliant products.
  8. Ladies and gentlemen, as a veteran of Islamic banking and a chartered accountant, I am deeply thankful that we now have a comprehensive textbook to guide us on the complexities of applying MFRS to Islamic finance transactions.
  9. We are delighted to share that the published textbook will be made available for free downloads by the public, including students and academicians. This enables the public – especially students and academicians - to easily access this text and use it as a current reference material.
  10. We have purposely made it a free download to encourage a paperless and borderless usage and to lessen the cost burden – as we all know reference books and textbooks can be very expensive. Through this textbook, students will be able to acquire adequate understanding and knowledge of MFRS for Islamic finance transactions at the tertiary level, and they will be better prepared for the workplace as well in future. Other than benefiting students, the book would also be a useful reference for the market, including MIA members and accountants working in the IF industry.
  11. We will also share hard copies of the textbook with relevant stakeholders such as Bank Negara Malaysia, Securities Commission Malaysia, Malaysian Accounting Standards Board, the Association of Islamic Banking Institutions Malaysia and Islamic financial institutions to enhance knowledge sharing and as a reference material.
  12. By sharing the textbook openly, MIA is confident that the content can trigger greater discourse and engagement on issues concerning the Islamic finance industry, particularly those related to financial reporting and disclosure.
  13. Ladies and gentlemen, this textbook was truly a collaborative effort between academics, leading accounting firms and industry experts, supported by the hardworking MIA management and team. In particular, the Committee wishes to thank YBhg Dato’ Mohammad Faiz Azmi, the former President of MIA for his visionary leadership in initiating and driving this project. We would also like to extend our utmost gratitude to the Malaysian Accountancy Research and Education Foundation (MAREF) for collaborating on this project. Many thanks are also due to the leading accountancy firms and industry experts who consulted and lent their time and expertise to this project. Last but not least, we wish to acknowledge and thank the authors involved in researching and writing the text, including members of the IFC and MIA technical staff, without whom this book could not have come to fruition.
  14. In future, the Committee hopes to initiate many more collaborative efforts among multiple stakeholders to support Malaysia’s aspiration of becoming a leading global hub for Islamic finance. By strengthening and sharing our proficiency in standards, good governance and Islamic socio-finance for sustainable development, Malaysia can carve out a unique niche in the blue ocean of Islamic finance - to create an uncontested market space and rise above the competition.
  15. Thank you.