Compliance Responses and Action Plans

  • Compliance Responses and Action Plans

    IFAC members and associates have provided self-assessment information about the regulatory and standard-setting framework in their countries (Part 1) and their organizations' activities in addressing IFAC's membership requirements (Part 2) as described in the Statements of Membership Obligations. Based on an analysis of this information, they are developing SMO Action Plans for continuous development and improvement.

    Some organizations have qualified to submit SMO Action Plans on a biennial basis by meeting eligibility criteria. These organizations are indicated with an asterisk (*).

    In the interest of transparency and providing information to the profession, regulators, and other stakeholders, all responses and SMO Action Plans are accessible below.

    The Malaysian Institute of Certified Public Accountants

     

    Introduction

    The information below has been submitted as part of the IFAC Member Body Compliance program. The Program has two components:

    Part 1: Assessment of the Regulatory and Standard-Setting Framework (provides information about regulatory requirements and standard-setting processes in member body countries); and
    Part 2: Assessment of Compliance (provides information on compliance by member bodies with the Statements of Membership Obligations). Part 2 of the Compliance Program will begin later this year, and the results will also be posted to the website.

    The responses to Part 1 are provided below. IFAC staff has reviewed the responses and, where necessary, validated them with external knowledgeable parties. A list of key terms is available to assist readers in understanding the responses.

    The purpose of this Part 1 Assessment is to collect information on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

    1. Setting auditing, accounting, ethics, public sector and education standards; and
    2. Regulating the accountancy profession.

    Sections 1 and 2 of Part 1 contain an introduction and instructions for member body respondents. For this reason, they are not included here, and the responses begin with Section 3.

    Questions or comments may be sent to complianceassessment@ifac.org.


    Section 3 -- Member Body General Information

    1. Country:

      MALAYSIA


    2. Name of member body:
      The Malaysian Institute of Certified Public Accountants

      Or please specify name:



    3. Individual responsible for preparation:
      TAN, SHOOK KHENG (Ms)


    4. Date member body became a member of IFAC:
      Note: Please enter a numeric date (e.g., 12/2001, Month/Year)

      10 / 1977



    Questions 5 - 22 are for internal use only


    Section 3G -- Affiliations


    23. Please list those regional organizations to which your organization belongs (e.g., FEE, CAPA, ECSAFA, IAA, etc.):
      CAPA: Confederation of Asian and Pacific Accountants
      AFA: Asean Federation of Accountants



    Section 4 -- Statutory Framework


    Responses to this section will provide a description of the legal framework governing the commercial aspects of auditing and financial reporting in your country.

    Section 4A -- The Companies Act or Commercial Code


    The following questions concern the Companies Act (the Act) or Commercial Code (the Code) or similar Legal authority in your country. If no Legal authority exists, or the Legal authority does not address particular questions, please indicate "N/A" for Not Applicable.

    24. What is the full name of:
      a). the Act or the Code: Companies Act 1965
      b). the Enacting body: Ministry of Domestic Trade & Consumer Affairs and Companies Commission of Malaysia
      c). date the Act or Code came into force: 04 / 1966


    25. How can IFAC obtain a copy of the Act or Code?
      Available at www.kpdnhep.gov.my


    26. Is the Act or Code available in English?
      Yes   No


    27. What are the types of entities covered by the Act or the Code?
      Please check all that apply.
      Listed entities   Other (please specify): Governmental and not-for-profit entities incorporated under the Companies Act
      Private companies   Other (please specify):
      Governmental   Other (please specify):
      Not-for-profit   Other (please specify):


    28. Is there a requirement for the following entities to prepare annual statutory financial statements? If YES, please describe the financial reporting requirements including the accounting standards to be followed.
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities Section 166A of the Companies Act 1965 : All Companies incorporated under the Companies Act 1965 are required to prepare financial statements in accordance with approved accounting standards issued by the Malaysian Accounting Standards Board (which is established under the Financial Reporting Act 1997). Section 169 : The directors of every company are required to lay before the company at its annual general meeting a profit and loss account and balance sheet, which have been duly audited, accompanied by: • A report of the directors on certain prescribed matters; • A statement by the directors that the profit and loss account and balance sheet have been made out in accordance with applicable approved accounting standards so as to give a true and fair view of the results of the business and the state of the affairs of the company; • A statutory declaration by a director/officer who is primary responsible for the financial management of the company his opinion as to the correctness or otherwise of the balance sheet and profit and loss account of the company.
      Private companies See Listed Entities
      Governmental
      Not-for-profit
      Other (please describe) Governmental and not-for-profit entities incorporated under the Companies Act See Listed Entities
      Other (please describe)


    29. Is there a statutory requirement for the following entities to be audited? If YES, describe the requirement including the auditing standards to be followed:
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities The Companies Act [section 169(4)] requires that the financial statements of all companies incorporated under the Act are audited by approved company auditors. Audits are to be performed in accordance with approved auditing standards issued by the Malaysian Institute of Certified Public Accountants (MICPA) and the Malaysian Institute of Accountants' (MIA) Accounting and Auditing Committee and developed by the MICPA and MIA Joint Working Group on Auditing.These standards are adopted from International Standards on Auditing and other pronouncements issued by IAASB without modification except where it is necessary in order to comply with national statutory reporting requirements or to provide further explanation. Such modifications are highlighted in the MICPA/MIA Forewards to the relevant standards
      Private companies
      Governmental
      Not-for-profit See above for Listed Entities
      Other (please describe) Governmental and not-for-profit entities incorporated under the Companies Act See above for Listed Entities
      Other (please describe) Governmental and not-for-profit entities incorporated under the Companies Act


    30. Are the auditors ("statutory auditors") that are appointed for audits required by the Act or Code ("statutory audits") appointed for a specific period?
      Yes   No
      If YES, please indicate the term of appointment: 1 Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    32. Does the Act or Code require joint auditors for the statutory audit?
      Yes   No
      If yes, please describe the requirement:


    33. Does the Act or Code require the rotation of the auditors or audit firms performing statutory audits?
      Yes   No
      If yes, please describe the requirement:
      In the near future the Malaysian Institute of Accountants is issuing a by-law on professional independence which will require the rotation of audit partners performing statutory audits of listed and public interest entities every five years.



    Section 4B -- Securities Market Regulations


    Responses to this section will provide a description of the financial reporting and auditing requirements for listed entities in your country.

    34. What are (a) the major items of Legal authority for such requirements, (b) the Enacting body(ies) and (c) the latest amendment date? Please identify the specific articles or sections that pertain to auditing and financial reporting:
    1. the major items of Legal authority for such requirements

      (i) Securities Industry Act, 1983 (section 99D) and Securities Industry (Compliance with Approved Accounting Standards) Regulations 1999.
      (ii) Listing Requirement of Bursa Malaysia Securities Berhad (formerly known as Malaysia Securities Exchange Berhad), issued pursuant to delegated powers under the Securities Industry Act, 1983 (Chapter 9 of Listing Requirements – Continuing Disclosure)
      (iii) Banking and Financial Institutions Act 1989 (Sections 40 – 43)
      (iv) Insurance Act 1996 (Sections 74 – 95)

    2. the Enacting body(ies)

      (i) Ministry of Finance and Securities Commission established under the Security Commission Act 1993
      (ii) Bursa Malaysia Securities Berhad (BMSB)
      (iii) Minister of Finance and Central Bank of Malaysia
      (iv) Minister of Finance and Central Bank of Malaysia

    3. the latest amendment date?

      (i) Securities Industry Act 12/2003
      (ii) Listing Requirements of BMSB 04/2004
      (iii) Banking and Financial Institutions Act 07/2001
      (iv) Insurance Act 09/2000


    35. How can IFAC obtain a copy of the Legal authority?
      (i) Available at www.sc.com.my
      (ii) Available at www.bursamalaysia.com
      (iii) Available at www.bnm.gov.my
      (iii) Available at www.bnm.gov.my


    36. Is the Legal authority available in English?
      Yes   No


    37. Are there any additional or alternative financial statement reporting requirements for listed entities that are not described in your answer to Question 28?
      Yes   No
      If YES, please describe the requirement:
      All listed companies are required under the Listing Requirements of Bursa Malaysia Securities Berhad to submit their annual audited financial statements as well as quarterly reports to the Exchange for public release.

      The Securities Industry Act 1983 (section 99D) also requires listed companies to submit their audited annual financial statements as well as interim and periodic financial reports promptly to the Securities Commission.

      Similar financial reporting requirements are imposed on banking and financial institutions under the Banking and Financial Institutions Act 1989, and on insurance companies under the Insurance Act 1996. The financial statements are required to be submitted to the Central Bank of Malaysia. In addition, these institutions are required to comply with the financial reporting requirements prescribed by the Central Bank of Malaysia. (Refer also to Attachment 1 which provides additional information relating to Section 10)


    38. Are there any additional auditing requirements that apply to listed entities other than those described in your answer to Question 29 (e.g., additional GAAS requirements, additional independence requirements, requirements to report to those charged with governance, etc.)?
      Yes   No
      If YES, please describe the requirement:
      All listed companies are required under the Listing Requirements of Bursa Malaysia Securities Berhad to appoint an audit committee which shall, inter alia, review the following and report the same to the board of directors of the listed company:
      • with the external auditor, the audit plan, the auditor’s evaluation of the system of internal controls and the auditor’s report;
      • the quarterly results and year end financial statements, prior to the approval by the board of the directors.

      Pursuant to the Banking and Financial Institutions Act 1989 and Insurance Act 1996, the Central Bank of Malaysia may require the auditor of banking and financial institutions and insurance companies to submit such additional information in relation to his audit, enlarge the scope of the audit, carry out any specific examination or establish any procedure as the Central Bank may specify. ((Refer also to Attachment 1 which provides additional information relating to Section 10)


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    40. Are auditors who perform audits of listed entities appointed for a specified period?
      Yes   No
      If YES, please indicate the term of appointment: 1 Year(s)


    41. Are joint auditors required for audits of listed entities?
      Yes   No
      If YES, please describe the requirement:


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      If YES, please describe the requirement:
      Rotation of auditors is required for banking and financial institutions and insurance companies. In accordance with the requirements of the Central Bank of Malaysia, the engagement partner for the audit of such institutions should be rotated after a period of not more than 5 years and that the engagement partner may resume his role only after a lapse of 5 years (cooling-off period) from his last audit engagement. There is currently no statutory requirement on the rotation of audit partner or audit firm in respect of the audit of other listed entities. However, MIA is issuing a new by-law on professional independence which requires that the lead engagement partner for the audit of listed entities or public interest entities be rotated after a period of not more than 5 years and that the engagement partner may resume his role only after a “cooling-off” period of 2 years. The MICPA’s proposed revised Code of Professional Conduct and Ethics, which is based on IFAC’s Code of Ethics for Professional Accountants (including the proposed revision to the IFAC Code), prescribes a rotation cycle of no more than 7 years and a cooling-off period of 2 years in respect of the audit of listed entities and public interest entities. The MICPA’s revised Code is expected to be implemented in 2005/2006.



    Section 5 -- Auditing Standards


    Responses to this section will provide a description of the legal and professional framework governing audit and other assurance standards in your country. The section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 5A -- Statutory Framework


    43. Please provide the name of the Legal authority and/or self-regulatory rules that establish audit and other assurance standards in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting audit and other assurance standards. If the standards are different for different entities (e.g., listed entities, private companies, governmental bodies, not-for-profit organizations, etc.), please specify the details that apply to each:
      Type of entity Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting audit and
      other assurance standards
      Listed entity Memorandum and Articles of Association and By-laws of MICPA 3/2002 MICPA
      Other (please describe) Listed entities Accountants Act 1967 04/2004 MIA
      Other (please describe) Non-listed entities and Private companies Same as Listed Entities Same as Listed Entities Same as Listed Entities
      Other (please describe) Gov't bodies Audit Act 1957 01/2002 Auditor General's Department

      a. How can IFAC obtain copies of these documents?

      Available upon request

      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (MICPA)


    44. For MICPA, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      The MICPA is a company limited by guarantee incorporated under the Companies Ordinances 1940 – 1946. The MICPA is governed by a Council of 30 members, who are elected by members at general meetings.

      The MICPA Council appoints an Accounting and Auditing Technical Committee (AATC) to be responsible for research, development and review of auditing standards/guidelines and to make recommendations to the Council for approval. The AATC currently consists of 17 members who are drawn from accounting firms, commerce, industry, regulatory bodies and academic institutions. Members of the AATC serve on a voluntary basis and there is no fixed term of appointment.

      (Attachment 1 provides additional information relating to this section and may be obtained through the IFAC website)


      b. Name of standards

      Approved Auditing Standards

      To forge greater collaboration between MICPA and MIA in setting auditing standards, the two bodies have recently formed a joint working group to undertake the standard setting responsibility.

      See Attachment 1 Audit Standard-Setting Process for additional information


    45. How many voting members does the standard-setting body have?
      30


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job and sector of the profession.


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Auditing standards issued by MICPA are approved by the MICPA Council, who are elected by members at general meetings. (See Attachment 1)


    49. What is the term of appointment for members?
      3 Year(s)


    50. For how many years has the standard-setting body been in existence?
      46 Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      110,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      3.80



    52. To what entity is the standard-setting body accountable?
      The MICPA, formed by members as a self regulatory body under the Companies Ordinances 1940 – 1946.


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      See Attachment 1

    2. accessibility of meetings (i.e., public or private)

      Private

    3. approval process for final standards (i.e., majority required to approve final standards)

      See Attachment 1

    4. other relevant due process activities

      See Attachment 1


    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      6 Day(s)


    Section 5B -- Standard-Setting (MIA)


    44. For MIA, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Statutory body established under the Accountants Act, 1967

      b. Name of standards

      Malaysian Approved Standards on Auditing

      For remaining questions please refer to the MIA response


    45. How many voting members does the standard-setting body have?


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    49. What is the term of appointment for members?
      Year(s)


    50. For how many years has the standard-setting body been in existence?
      Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    52. To what entity is the standard-setting body accountable?


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)


    Section 5B -- Standard-Setting (Same as Listed Entities)


    44. For Same as Listed Entities, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body



      b. Name of standards



    45. How many voting members does the standard-setting body have?


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    49. What is the term of appointment for members?
      Year(s)


    50. For how many years has the standard-setting body been in existence?
      Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    52. To what entity is the standard-setting body accountable?


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)


    Section 5B -- Standard-Setting (Auditor General's Department)


    44. For Auditor General's Department, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      A government department

      b. Name of standards



    45. How many voting members does the standard-setting body have?


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    49. What is the term of appointment for members?
      Year(s)


    50. For how many years has the standard-setting body been in existence?
      Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    52. To what entity is the standard-setting body accountable?


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 6 -- Ethics


    Responses to questions in this section will provide a description of the legal and professional framework governing ethics standards for accountants in your country. This section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 6A -- Statutory Framework


    55. For each of the following types of professionals, please indicate the name of the Legal authority and/or self-regulatory rules establishing ethics standards for accountants and auditors in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting the ethics standards.
      Type of professional covered Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting ethics standards
      Professional Accountants in Public Practice Memorandum and Articles of Association and By-Laws of MICPA 3/2002 MICPA
      Professional Accountants in Business Same as above Same as above Same as above
      Professional Accountants in the Public Sector Same as above Same as above Same as above
      Other (please describe) All professional accountants Accountants Act 1967 4/2004 Malaysian Institute of Accountants

      a. How can IFAC obtain copies of these documents?

      Upon request from MICPA.

      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (MICPA)


    56. For MICPA, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      The MICPA is a company incorporated under the Companies Ordinances 1940 – 1946 limited by guarantee. The MICPA is governed by a Council of 30 members, who are elected by members at general meetings.

      The MICPA Council appoints an Ethics Task Force to be responsible for review, research, preparation of exposure drafts of proposed changes to the MICPA Code of Professional Conduct and Ethics, and to make recommendations to the Council.

      The Ethics Task Force currently consists of 6 members who are drawn from accounting firms, commerce, industry and academic institutions. Members of the Ethics Task Force serve on a voluntary basis and there is no fixed term of appointment.


      b. Name of standards

      Code of Professional Conduct and Ethics. The latest revision to the MICPA Code of Professional Conduct and Ethics, which will be issued as exposure draft for comment in March 2005 is based on IFAC’s Code of Ethics for Professional Accountants (revised).


      The MICPA and MIA establish their respective codes of professional conduct and ethics and monitor their members’ compliance with the code.


    57. How many voting members does the standard-setting body have?
      30


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job and sector of the profession.


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The MICPA’s Code of Professional Conduct and Ethics is approved by the MICPA Council, who are elected by members at general meetings.


    61. What is the term of appointment for members?
      3 Year(s)


    62. For how many years has the standard-setting body been in existence?
      46 Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      22,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      3.80



    64. To what entity is the standard-setting body accountable?
      MICPA


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      The Ethics Task Force submits draft exposure drafts of proposed changes to the MICPA Code of Professional Conduct and Ethics to the MICPA Council for consideration. When approved by the Council, it will be issued as an exposure draft to members and other interested parties for comment. The exposure period varies from 1 to 3 months, depending on the extent of proposed amendments.

      The comments and suggestions received during the exposure period are considered by the Ethics Task Force. Where appropriate, the proposed amendments are revised. The Task Force determines and recommends to the Council whether re-exposure is necessary.


    2. accessibility of meetings (i.e., public or private)

      Private

    3. approval process for final standards (i.e., majority required to approve final standards)

      When the final proposed amendments are approved by the Council, the revised Code is issued to members.

      The MICPA is governed by a Council of 30 members, who are elected by members at general meetings. Each elected Council member serves for a term of 3 years and is eligible for re-election.

      At all meetings of the Council, the presence of at least one-third of the members of the Council (i.e. 10 members) shall form a quorum. The vote of the bare majority of the members present at a meeting is required to approve pronouncements.


    4. other relevant due process activities



    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      6 Day(s)


    Section 6B -- Standard-Setting (Same as above)


    56. For Same as above, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body



      b. Name of standards



    57. How many voting members does the standard-setting body have?


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    61. What is the term of appointment for members?
      Year(s)


    62. For how many years has the standard-setting body been in existence?
      Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    64. To what entity is the standard-setting body accountable?


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)


    Section 6B -- Standard-Setting (Malaysian Institute of Accountants)


    56. For Malaysian Institute of Accountants, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Statutory body established under the Accountants Act, 1967

      b. Name of standards

      By-Laws (on Professional Conduct and Ethics).

      For remaining questions please refer to the MIA response.


    57. How many voting members does the standard-setting body have?


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    61. What is the term of appointment for members?
      Year(s)


    62. For how many years has the standard-setting body been in existence?
      Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    64. To what entity is the standard-setting body accountable?


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 7 -- Education


    Responses to questions in this section will provide a description of how education requirements for the profession are established. Please indicate the role your organization plays within this process.

    Section 7A -- Education Requirements


    67. Please describe in general terms the education system in your country including the different stages of education from early childhood education through to tertiary level study. Please indicate which aspects / levels are compulsory as part of the national education system:
      Primary education - 6 years, compulsory
      Secondary education - 5-6 years, opitional
      Tertiary education - 3-4 years, optional


    68. Is there a legal authority or regulation that specifies the requirements for an individual to operate as an accountant or auditor in your country?
      Yes   No

      If YES, please provide the name and describe the requirements, including any relating to education, experience or qualifications.

      The Accountants Act 1967 regulates the registration of accountants and the practice of the accountancy profession in Malaysia (sections 22 and 23). The Malaysian Institute of Accountants (MIA) is established under the Act to carry out the objects of the Act.

      The Act prescribes the qualifications and practical experience requirements for admission as a member of MIA.

      The following requirements must be fulfilled by a person in order to engage in public practice in Malaysia:

      (a) He holds a qualification recognised in the Accountants Act and has satisfied the practical experience requirements prescribed in the Act;
      (b) He has been admitted as a member of MIA with chartered accountant status and holds a practicing certificate issued by MIA;
      (c) He has obtained the approval of the Ministry of Finance to act as a company auditor;
      (d) He has his principal or only place of residence within Malaysia.


    69. Please select from below all the relevant key levels of requirements to obtain certification from your member body (i.e. to qualify as a certified or chartered accountant) and provide a general description of the requirement.
      Academic requirements
      Minimum entry requirement to the MICPA examination and training programme is a recognised degree in accountancy or other disciplines or a tertiary level diploma in accountancy
      Professional examinations
      Must complete the MICPA examination comprising:
      *Professional Stage Examination consisting of 2 modules of three papers each
      *Advanced Stage Examination consisting of threee modules of one paper each
      Exemption from the Professional Stage Examination papers may be granted to graduates with a degree with concentration in accounting or professional qualification
      Practical experience
      Must obtain a minimum of 3 years supervised practical experience in approved training organisations
      Final qualifying examination
      The MICPA Advanced Stage examination is effectively the final qualifying examination. All candidates for membership are required to pass this examination.
      Other (please describe) Admitting Examination
      Members of the foreign professional accountancy bodies whose qualifications are recognised for membership of MICPA are required to pass the MICPA Admitting Examination comprising 2 papers -Malaysian Taxation & Regulatory & Financial Reporting Framework of Malaysia


    70. Which of the following arrangements best describes who establishes the education requirements for the accounting profession in your country? Please select one option.
      A government ministry, department or agency establishes education requirements for the accounting profession with no additional requirements set by the member body(ies).
      A government ministry, department or agency establishes minimum education requirements for the accounting profession, and member body(ies) supplement these requirements.
      Member body(ies) establishes the education requirements for the accounting profession.
      Other (please describe)


    71. Please provide the name(s) of the relevant body in the government ministry, department, agency and / or member body who establishes the education requirements.
      (i) Minister of Education (MOE) – Primary to secondary education
      (ii) Minister of Higher Education (MOHE) – Tertiary education
      (iii) The Malaysian Institute of Certified Public Accountants (MICPA) – professional education and training leading to the CPA qualification
      (iv) The Malaysian Institute of Accountants (MIA) – registration of accountants with qualifications recognised in the Accountants Act 1967.

      With respect to question 71d below, the relevant bodies / Ministries have been in existence for:

      MOE 43 Years
      MOHE 1 Years
      MICPA 46 Years
      MIA 37 Years

    1. A general description of the role of the relevant body(ies) including how it operates and its due process in establishing the education requirements.

      Role of Ministry of Education:
      The Ministry of Education executes the national education policy prescribed in the Education Act 1996 through a national education system, which comprises pre-school education, primary education, secondary education, post-secondary education and higher education. The Ministry prescribes the national curriculum, which shall be used by all schools in the national education system.

      Role of Ministry of Higher Education:
      The Ministry of Higher Education is established in 2003 to formulate the policies for the progress of higher education towards yielding quality graduates to fulfill the manpower needs of the nation.

      The Malaysian Institute of Certified Public Accountants (MICPA):

      The main objects of MICPA are as follows:

      (a)To advance the theory and practice of accountancy in all its aspects.
      (b)To recruit, educate, train and assess by means of examination or otherwise a body of members skilled in these areas.
      (c)To preserve at all times the professional independence of accountants in whatever capacities they may be serving.
      (d)To maintain high standards of practice and professional conduct by all its members.
      (e)To do all such things as may advance the profession of accountancy in relation to public practice, industry, commerce, education and the public service.

      The MICPA is the only local professional body recognised under the Accountants Act 1967 whose members are entitled to practise public accountancy in Malaysia.

      The MICPA provides a system of education, training and examination leading to the Certified Public Accountants (CPA) qualification.

      Malaysian Institute of Accountants (MIA):

      The MIA is established under the Accountants Act 1967 as a regulatory body. One of its functions is to determine the qualifications of persons for admission as members. The MIA does not conduct its own examination. The MIA determines whether applicants for admission as members possess one of the qualifications recognised under the Accountants Act and satisfy the practical experience requirements prescribed in the Act.

      Please refer to MIA’s response to IFAC regarding MIA’s functions and governance structure.

    2. How many voting members does the relevant body(ies) have

      (i) MOE/MOHE – N/A
      (ii) MICPA – MICPA Council has 30 members
      (iii) MIA – See MIA response

    3. Are the members of the relevant body(ies) involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: (i) MOE/MOHE - employed by gov't (ii) MICPA and MIA - voluntary

    4. For how many years has the body been in existence?

      Year(s)


    72. How would you describe the authority that the education requirements have?
      Requirements are legally-based
      Requirements are set in the constitution, by-laws or other rules of the relevant body(ies).
      Requirements are set in member body(ies) policy document(s).
      Other (please describe)

    72 a. How can IFAC obtain copies of these documents?
      Available upon request.

      (a)Entry Requirement for MICPA

      The MICPA qualification is a post degree professional qualification. The minimum entry requirement to the MICPA examination is a recognised degree in accountancy or other disciplines or a diploma in accountancy at the tertiary level.

      (b)The MICPA Examination

      The MICPA examination consists of two levels of examinations as follows:

      Professional Stage Examination and Advanced Stage Examination (contact IFAC staff for additional information provided by MICPA).
      (c)Practical Experience Requirements

      Work experience forms a crucial part of the CPA qualification process. All students are required to obtain not less than 3 years of supervised practical experience in accounting and/or auditing and at least two of the following technical categories: Taxation, Insolvency, Financial Management, Information Technology

      (d) Requirements for Admission as a CPA

      The following requirements must be satisfied in order to qualify as a member of MICPA:

      • Possess an accredited degree or a tertiary diploma in accountancy;
      • Pass the MICPA examination; and
      • Complete at least 3 years of approved

    72 b. Are these documents available in English?
      Yes   No


    73. Are the education requirements for accountants and auditors the same throughout your country, or do they differ among regions, provinces or states?
      Same   Different
      If different, please briefly describe the main differences:


    74. Please indicate the scenario that best describes who delivers the education and examination process for members of the profession. Please only select one option.
      The education program and final examination are delivered by the member body.
      The education program and final examination are delivered by the member body and other education institutions (e.g., universities, colleges, and others).
      The education program and final examination are delivered by education institutions (e.g., universities, colleges, and others).
      Other (please explain)


    75. Once qualified as a member of your professional body, can members offer their services directly to the public?
      Yes   No



    Section 7B -- Licensing


    76. Are there licensing requirements for auditors in your country?
      Yes (continue with Question 77)   No (proceed to Section 8)


    77. Who sets the requirements to obtain a license?
      The Ministry of Finance


    78. What are the requirements to obtain a license (please select all relevant requirements.)?
      Academic study specific for obtaining a license
      Practical experience
      Licensing examination
      Final qualifying examination
      Other (please describe)
      (i) Qualification recognised in the Accountants Act 1967 (ii) Residential requirement - principal place of residence must be within Malaysia


    79. Are there ongoing requirements to retain a license?
      Yes   No

      If YES, please select all relevant requirements.
      Continuing professional development
      Re-examination
      Other (please specify): Continuing membership with MIA


    80. What entity grants the license?
      The Ministry of Finance


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      None



    Section 8 -- Public Sector Accounting Standards


    Responses to this section will provide a description of the legal and professional framework governing public sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate, where appropriate, the role of your organization within this framework.

    Section 8A -- Statutory Framework


    82. Please provide the name of the Legal authority and/or self-regulatory rules establishing public sector accounting standards in your country, the date of last amendment and the name of the body responsible for setting public sector accounting standards. If the standards are different for different entities (e.g., whole of government, ministry/department, statutory authority/agency, profit entity owned by government, state governments, local governments, other [please specify]), please specify the details that apply to each.
      Type of entity Name of
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting public sector
      accounting standards
      Whole of government Financial Procedure Act 1957 Public Sector Accounting Standards Committee
      Ministry/department Financial Procedure Act 1957 Public Sector Accounting Standards Committee
      Statutory authority/agency These bodies are required by the respective regulatory authority to comply with approved accounting standards issued by the Malaysian Accounting Standards Board Malaysian Accounting Standards Board
      Profit entity owned by government These bodies are required by the respective regulatory authority to comply with approved accounting standards issued by the Malaysian Accounting Standards Board Malaysian Accounting Standards Board
      State governments Financial Procedure Act 1957 Public Sector Accounting Standards Committee
      Local governments These bodies are required by the respective regulatory authority to comply with approved accounting standards issued by the Malaysian Accounting Standards Board Malaysian Accounting Standards Board
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      (i) Public Sector Accounting Standards - available upon request
      (ii) MASB Standards - available at www.masb.org.my

      (Note: Per Malaysian Accounting Standards Board documents are available in English)


      b. Are the documents available in English?
      Yes   No


    Section 8B -- Standard-Setting (Public Sector Accounting Standards Committee)


    83. For Public Sector Accounting Standards Committee, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      A Committee established by the Accountant General’s Department, which is a Government Department under Ministry of Finance

      b. Name of standards

      Public Sector Accounting Standards


    84. How many voting members does the standard-setting body have?
      10


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: Members of PSASC consist of Accountant General, Deputy Accountant General and Directors of various divisions of AGD


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Sector of the profession and best person for the job


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Government - Accountant General

      With respect to question 88 below, there is no fixed term.


    88. What is the term of appointment for members?
      Year(s)


    89. For how many years has the standard-setting body been in existence?
      13 Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      32,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      3.80



    91. To what entity is the standard-setting body accountable?
      The Ministry of Finance


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Exposure drafts of proposed standards are circulated to all accountants in the Federal, State and Local Government and academic institutions for comment. The exposure period is typically two months.

    2. accessibility of meetings (i.e., public or private)

      Private

    3. approval process for final standards (i.e., majority required to approve final standards)

      Final Standards are approved by the Public Sector Accounting Standards Committee by a simple majority of the votes of the members present at a meeting.

    4. other relevant due process activities



    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      20 Day(s)


    Section 8B -- Standard-Setting (Malaysian Accounting Standards Board)


    83. For Malaysian Accounting Standards Board, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Refer to section 9

      b. Name of standards



    84. How many voting members does the standard-setting body have?


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    88. What is the term of appointment for members?
      Year(s)


    89. For how many years has the standard-setting body been in existence?
      Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    91. To what entity is the standard-setting body accountable?


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 9 -- Private Sector Accounting Standards


    Responses to the questions in this section will provide a description of the legal, statutory and professional framework governing private-sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate what role your organization plays within this framework.

    Section 9A -- Statutory Framework


    94. Please provide the name of the Legal authority and/or self-regulatory rules that establish private-sector accounting standards in your country, the date of last amendment, and the name of the body responsible for setting private sector accounting standards. If the standards are different for different entities (for example, listed entities, private companies, governmental organization, not for profit organizations, etc.), please specify the requirements that apply to each.
      Type of entity Name of legal
      authority or
      applicable
      rules
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting private sector
      accounting standards
      Listed entity Financial Reporting Act 1997 03/1997 Malaysian Accounting Standards Board
      Other (please describe) Non-listed public and private company Financial Reporting Act 1997 03/1997 Malaysian Accounting Standards Board
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      Available at www.masb.org.my

      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (Malaysian Accounting Standards Board)


    95. For Malaysian Accounting Standards Board, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Statutory body established under the Financial Reporting Act 1997.

      The Malaysian Accounting Standards Board (MASB) is established under the Financial Reporting Act 1997 to develop and issue accounting standards for Malaysia. The MASB pursues the policy of harmonisation with International Accounting Standards (IAS) [and now International Financial Reporting Standards (IFRS)] issued by the IASB. Where the subject of a proposed MASB Standard is dealt with by an IAS, the relevant IAS is used as the basis for the development of the MASB Standard. Each MASB Standard contains an appendix outlining the level of comparability with the relevant IAS. In most cases, compliance with MASB Standards will ensure conformity, in all material respects, with the relevant IAS.

      Where the subject of a proposed MASB Standard is not covered by existing IAS, the MASB undertakes a programme of research, consultation and formulation of the standard. In this respect, the MASB has issued standards on accounting for life insurance business, general insurance business and property development activities.

      (Attachment 1 provides additional information relating to this section and may be obtained through the IFAC website)


      b. Name of standards

      MASB Standards.
      The Malaysian Accounting Standards Board (MASB) adopts the policy of harmonisation with International Accounting Standards (IAS) [and now International Financial Reporting Standards (IFRS)] issued by the IASB. Thus in most cases, compliance with MASB Standards ensures conformity, in all material respects, with IAS


    96. How many voting members does the standard-setting body have?
      8


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      With respect to question 98 above, the members are appointed by Ministry of Finance according to criteria set out in the Financial Reporting Act 1997.

      Best person for the job and representation of the relevant constituencies.

      The Malaysian Accounting Standards Board (MASB) consists of a Chairman, the Accountant General and six other members who possess knowledge and experience in the field of accountancy, law, business or finance. In addition, three advisors are appointed to MASB representing the Securities Commission, the Central Bank of Malaysia and the Registrar of Companies.


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The Minister of Finance, upon recommendation by the MASB.


    100. What is the term of appointment for members?
      3 Year(s)


    101. For how many years has the standard-setting body been in existence?
      7 Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      100,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      3.80



    103. To what entity is the standard-setting body accountable?
      The Ministry of Finance


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      When a topic is identified by the MASB as potentially requiring the issue of a MASB Standard, the MASB commissions its staff to undertake a programme of research and consultation. This programme involves consideration of and consultation on the relevant conceptual issues, any pre-existing pronouncements and practices both in Malaysia and overseas, and the economic, legal and practical implications of the introduction of particular accounting requirements.

      When the relevant issues have been identified, a working group is appointed by the MASB to debate on the issues. A working group of the MASB is chaired by a member of the MASB and comprises a project manager, representatives from industry, auditors and regulatory authorities. Following research and deliberation, a draft document, either in the form of a Draft Statement of Principles or an Exposure Draft, is presented to the MASB for review and then presented to the *Financial Reporting Foundation (FRF) for comment. When the issues require a more discursive treatment, a Discussion Paper may be published or circulated to other parties who have registered their interest with the MASB. The Draft Statement of Principles or the Exposure Draft is then published to allow an opportunity for interested parties to comment on the proposals and for the MASB to gauge the appropriateness and level of acceptance of those proposals.

      An exposure draft may be amended in the light of feedback resulting from the period of public exposure. In some circumstances, there may be a further period of public or selective exposure prior to the issue of a MASB Standard. Although the MASB weighs carefully the views of interested parties, the ultimate content of a MASB Standard must be determined by the MASB’s own judgement based on research, public consultation and careful deliberation as to the benefits and costs of providing the resulting information.

      The MASB is conscious of the need to operate with maximum possible consultation and to be transparent in its deliberations. For this reason, the MASB’s due process is based upon consultation with preparers, users, industry groups, auditors, regulatory authorities and other interested parties. In addition, the due process provides opportunities for interested parties to contribute input to any proposed pronouncement at several stages.

      Note : The Financial Reporting Foundation (FRF) is also established under the Financial Reporting Act 1997. The functions of the FRF are to be responsible for all the financing arrangements for the operation of the MASB, review the performance of the MASB, and provide its views on any matter that the MASB seeks to undertake or implement.


    2. accessibility of meetings (i.e., public or private)

      Private

    3. approval process for final standards (i.e., majority required to approve final standards)

      Each meeting of the MASB requires the presence of at least six members. The affirmative votes of not less than six members present at a meeting is required to approved a final standard.

    4. other relevant due process activities



    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      12 Day(s)



    Section 10 -- Monitoring (Quality Assurance) and Enforcement


    Responses to the questions in this section will provide a description of the legal and professional framework governing regulation of the profession in your country. Please indicate what role your organization plays within this framework.

    Section 10A -- Securities Market Regulatory Authority


    106. Name the authority that regulates the securities market:
      Securities Commission


    107. What responsibilities does this organization have for monitoring and enforcing compliance with accounting, reporting or auditing requirements? Please identify the Legal authority that establishes that responsibility:
      The Securities Commission (established under the Securities Commission Act 1993) is empowered under the Securities Industry Act 1983 to monitor and enforce compliance with accounting, financial reporting and auditing requirements.


    108. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      The Securities Commission is represented on the panel responsible for issuance of audit licence established by the Ministry of Finance.

    2. accounting and auditing standard-setting

      The Securities Commission serves as an advisor on the Malaysian Accounting Standards Board. The Commission is also represented on the MIA-MICPA Joint Working Group on Auditing.

    3. review of financial statements prepared by listed entities, and monitoring of their compliance with the accounting and disclosure requirements

      The Securities Commission has established a Financial Reporting and Corporate Surveillance Department that undertakes the review of financial statements of listed entities on a regular basis. Cases of non-compliance are referred for enforcement action which includes investigation, civil proceedings, criminal prosecution and administrative actions.



    Section 10B -- Stock Exchange


    109. Name the four largest stock exchangers (by market capitalization) and whether it is organized as a profit or not-for-profit organization:
      Profit Not
      for
      profit
      Stock Exchange
      Bursa Malaysia Securities Berhad



    Section 10B -- Stock Exchange
    Bursa Malaysia Securities Berhad Details


    110. For Bursa Malaysia Securities Berhad, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      The Listing Requirements of the Exchange (Chapter 9) requires that all listed companies must ensure that the annual audited financial statements are prepared in accordance with approved accounting standards issued by the Malaysian Accounting standards Board (MASB). The function of monitoring compliance with financial accounting and reporting standards has been transferred to the Securities Commission following the demutualisation of the Exchange to become a public company limited by shares

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      The function of monitoring compliance with financial accounting and reporting standards has been transferred to the Securities Commission following the demutualisation of the Exchange to become a public company limited by shares

    3. How enforcement actions are administered.

      The function of monitoring compliance with financial accounting and reporting standards has been transferred to the Securities Commission following the demutualisation of the Exchange to become a public company limited by shares



    Section 10C -- Regulatory Oversight of the Accounting Profession


    111. Has an audit profession oversight body been established (e.g., to oversee the external quality assurance review process, etc.)?
      Yes   No

      If NO, proceed to the next section.

      If YES, please describe :

    1. What are the name and duties of the oversight body?

      There are discussions being initiated by the Securities Commission for the creation of a public oversight body or process to oversee the profession.

    2. The number of members on the oversight body



    3. Its powers



    4. How the oversight body conducts or oversees a program of inspections to assess the degree of compliance of each audit firm/auditor with applicable auditing standards and regulations



    5. The sanctions the oversight body may impose in the event of non-compliance



    6. How the oversight body is accountable to any public institution or body



    Section 10D -- Banks Regulatory Authority


    112. Name the authority that regulates the banks and similar financial institutions. Discuss how this authority differentiates between accounting requirements for regulatory reporting and general purpose external financial reporting:
      The Central Bank of Malaysia is empowered under the Banking and Financial Institutions Act (BAFIA) 1989 to regulate institutions carrying on banking, finance company, merchant banking, discount house and money-broking businesses (licensed financial institutions). All licensed financial institutions are required under section 169(19) of the Companies Act 1965 to comply with the provisions of the Act relating to the form and content of the report of the directors and the annual balance sheet and profit and loss account. Thus, all licensed financial institutions are required to prepare their financial statements in accordance with approved accounting standards issued by the Malaysian Accounting Standards Board. In addition, these institutions are required to comply with the guidelines issued by the Central Bank on accounting and financial reporting. Licensed financial institutions are also required to submit certain information to the Central Bank for statistical compilation purposes on a monthly basis. Reconciliation of certain key figure in the statistical compilation and the relevant disclosures in the annual statutory financial statements is required to be included in the year end submission to the Central Bank. (Attachment 1 provides additional information relating to this section and may be obtained through the IFAC website)


    113. Discuss briefly the legal requirements with respect to monitoring and enforcement by the regulatory authority of accounting and auditing standards that apply to the banks and similar financial institutions:
      As auditors of licensed financial institutions are members of MIA and MICPA, audits are performed in accordance with approved auditing standards issued by MIA and MICPA. Audit Planning Memorandums for the statutory audits of annual financial statements of the financial institutions are submitted to BNM the Central Bank for information. Licensed financial institutions are required to submit the draft audited annual financial statements together with the schedules prescribed by the Central Bank, to the Central Bank for approval. Meetings may be held between the Central Bank and the statutory auditors to address any specific matters identified. As stated under Section 40(13) of BAFIA, the Central Bank may require the auditor to submit such additional information in relation to his audit, to enlarge or extend the scope of the statutory audit of the business and affairs of the financial institutions in such manner or to such extent as the Central Bank may specify. The financial statements of the financial institutions, including the unaudited quarterly financial statements must be approved by the Central Bank before being released. It is the understanding that, whilst the Central Bank places reliance on the statutory auditors in ensuring compliance with approved accounting standards issued by MASB and guidelines issued by the Central Bank on accounting and financial reporting, the Central Bank normally performs its own detailed review, and issues its own reports in accordance with CAMEL framework.


    114. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      Section 40 of the Banking and Financial Institutions Act 1989 prescribes the qualification of auditors of licensed financial institutions. In addition, the appointment of auditors of licensed financial institutions are subject to the approval of the Minister of Finance on the recommendation of the Central Bank of Malaysia. The Central Bank also requires that the engagement partner for the audit of such institutions be subject to a rotation cycle of 5 years and a cooling-off period of 5-years before the engagement partner can resume his role. In addition, the Central Bank is represented on the panel responsible for issuance of audit licence established by the Ministry of Finance.

    2. accounting and auditing standard-setting

      The Central Bank serves as an advisor on the Malaysian Accounting Standards Board. In addition, the Central Bank issues guidelines on accounting and financial reporting requirements for compliance by licensed financial institutions

    3. review of financial statements prepared by listed entities

      As indicated in the response to Q113, whilst the Central Bank places reliance on the statutory auditors in ensuring compliance with approved accounting standards issued by the MASB and guidelines issued by the Central Bank on accounting and financial reporting, the Central Bank normally performs its own detailed review, and issues its own reports in accordance with CAMEL framework.

    4. enforcement of accounting, reporting and auditing requirements

      See response to question 113



    Section 10E -- Non-Banking Financial Institutions Regulatory Authority


    115. Name the regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on non-banking institutions.
      The Central Bank of Malaysia is the regulator for selected development financial institutions as may be prescribed by the Minister of Finance by order published in the Gazette. As the development financial institutions are normally also statutory bodies, they may be governed by other regulatory authorities as well, e.g. the Accountant General, the Auditor General, the specific ministry responsible for the objectives or activities promoted by the institutions etc. The requirements by the Central Bank on development financial institutions include compliance with approved accounting standards in Malaysia and submission of annual audited financial statements to the Central Bank. In addition, if so required by the respective governing regulations, the annual financial statements of certain development financial institutions are required to be presented to the Parliament of Malaysia.


    116. What is the source of Legal authority of the regulatory authority(ies)?
      (i) Banking and Financial Institutions Act 1989 which provides for licensing and regulation of institutions carrying on banking, finance company, merchant banking, discount house and money-broking businesses (licensed financial institutions). (ii) Development Financial Institutions Act 2002 which focuses on promoting the development of effective and efficient development financial institutions (DFIs) to ensure that the roles, objectives and activities of the DFIs are consistent with Government policies and that the mandated roles are effectively and efficiently implemented.


    117. Briefly describe the role of the regulatory authority(ies) as it relates to the following:
    1. regulation of the audit profession

      Section 40 of the Banking and Financial Institutions Act 1989 prescribes the qualification of auditors of licensed financial institutions. In addition, the appointment of auditors of licensed financial institutions are subject to the approval of the Minister of Finance on the recommendation of the Central Bank of Malaysia. The Central Bank also requires that the engagement partner for the audit of such institutions be subject to a rotation cycle of 5 years and a cooling-off period of 5-years before the engagement partner can resume his role. In addition, the Central Bank is represented on the panel responsible for issuance of audit licence established by the Ministry of Finance.

    2. accounting and auditing standard-setting

      The Central Bank serves as an advisor on the Malaysian Accounting Standards Board. In addition, the Central Bank issues guidelines on accounting and financial reporting requirements for compliance by licensed financial institutions

    3. review of financial statements prepared by listed entities

      See response to Q114c

    4. enforcement of accounting, reporting and auditing requirements

      See response to Q114d



    Section 10F -- Insurance Companies Regulatory Authority


    118. Name the regulatory authority responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on insurance companies.
      Central Bank of Malaysia (Attachment 1 provides additional information relating to this section and may be obtained through the IFAC website)


    119. What is the source of Legal authority of the regulatory authority(ies)?
      Insurance Act 1996 which deals with the licensing of insurers, insurance brokers, adjusters and re-insurers.


    120. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      Section 75 of the Insurance Act prescribes the qualification of auditors of insurance companies. In addition, the appointment of auditors of insurance companies are subject to the approval of the Central Bank of Malaysia. The Central Bank also requires that the engagement partner for the audit of insurance companies be subject to a rotation cycle of 5 years and a cooling-off period of 5-years before he can resume his role as engagement partner. In addition, the Central Bank is represented on the panel responsible for issuance of audit licence established by the Ministry of Finance.

    2. accounting and auditing standard-setting

      The Central Bank serves as an advisor on the Malaysian Accounting Standards Board. In addition, the Central Bank issues guidelines on accounting and financial reporting requirements for compliance by insurance companies.

    3. review of financial statements prepared by listed listed entities

      Insurance companies are required to submit to the Central Bank the audited financial statements together with a DGI (Director General of Insurance) return, containing detailed analysis of the accounts. It is the understanding that whilst the Central Bank places reliance on the auditors in ensuring compliance with approved accounting standards issued by the MASB and guidelines issued by the Central Bank on accounting and financial reporting, the Central Bank normally performs its own detailed review.

    4. enforcement of accounting, reporting and auditing requirements

      Insurance companies are required under Section 90 of the Insurance Act to maintain their accounts in compliance with accounting standards approved by the Central Bank subject to such modifications as the Bank may specify. In this regard, insurance companies are required to comply with approved accounting standards issued by the MASB and the guidelines issued by the Central Bank on accounting and financial reporting. As auditors of insurance companies are members of MIA and MICPA, audits are performed in accordance with approved auditing standards issued by MIA and MICPA. Meetings may be held between the Central Bank and the auditors to address any specific matters identified. As provided in section 81 of the Insurance Act, the Central Bank may require the auditor to submit such additional information in relation to his audit or to enlarge or extend the scope of his audit of the business and affairs of the insurance company in such manner or to such extent as the Central Bank may specify.



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.
      Generally, entities other than companies formed under the Companies Act (1965) are regulated by the relevant government department and/or ministry pursuant to an Act of Parliament. The legislation normally includes provisions on compliance with accounting, financial reporting and auditing requirements.

      For example, the Co-operative Societies Act (1948) regulates the formation and administration of co-operative societies, including maintenance of accounts, appointment of auditors, preparation of financial statements and requirement for audit, and the content of the auditor’s report. The regulatory authority is the Registrar General of Co-operative Societies, Malaysia.

      The Offshore Companies Act (1990) regulates the incorporation, registration and administration of offshore companies. The Act includes provisions on the qualification and appointment of auditors, maintenance of accounts and requirement for audit of financial statements. The regulatory authority is the Registrar of Companies.


    122. What is the source of Legal authority of each regulatory authority?
      See response to question 121


    123. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      See response to question 121

    2. accounting and auditing standard-setting

      See response to question 121

    3. review of financial statements prepared by listed listed entities

      See response to question 121

    4. enforcement of accounting, reporting and auditing requirements

      See response to question 121



    Section 10H -- Quality Assurance


    124. Does any organization of professional accountants/auditors organize a program of quality assurance review to monitor compliance with accounting, reporting and auditing requirements?
      Yes   No

      If NO, proceed to next Section.

      If YES, briefly describe the monitoring and enforcement mechanism.

      The Malaysian Institute of Accountants (MIA) has recently instituted a practice review programme.

      Paragraph (c) of Section 6 of the Accountants Act, 1967 (the “Act”) provides for the MIA, as one of its functions to regulate the practice of the profession of accountancy in Malaysia. Paragraph (f) of Section 6 of the Act further states that the MIA shall generally be able to do such acts as it thinks fit for the purpose of achieving its objectives, including that of regulating the profession.

      The objective of the practice review programme is to ensure that all members in public practice maintain, observe and apply the relevant professional standards. Primarily, the practice review programme is intended to be educational and to help members in public practice improve their professional standards where necessary. Essentially through a review of current engagement files, the practice review programme will identify areas where a member in public practice may require assistance in maintaining professional standards.



    125. Under what authority does the organization conduct the program of quality assurance review?
      As part of the statutory function provided under the Accountants Act 1967 which is to regulate the accountancy profession in Malaysia.


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?
      A combination of staff from MIA and external reviewers.



    Section 10 I -- Investigation and Discipline


    127. Is there a process for investigating and disciplining the accounting profession in your country?

    128. Which of the following best describes the responsibility for the investigatory and disciplinary function in your country?
      Government or other agencies are solely responsible for this function.
      Government or other agencies have this responsibility, but the member body or bodies participate in the process.
      Government formally delegates this function to the member body or bodies, to exercise on its behalf.
      Member body or bodies have separate and independent processes that operate alongside processes of legal authorities.
      Other (please explain)


    129. Please indicate the name of the body or bodies responsible for investigation and discipline.
      Investigation Committee (7 members), Disciplinary Committee (7 members) and Appeal Committee (5 members) of MICPA.


    Responses to the remaining questions in this Section are required if your organization has responsibility for investigation and disciplinary actions.

    130. How many voting members does the body have?
      See response to question 129


    131. Are the members of the body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    132. What are the criteria considered in selecting members of the body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job and sector of the profession. In addition, two (out of five) members of the Appeal Committee are lay persons, who are members of a national professional body.


    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The Council of MICPA


    134. What is the term of appointment for members?
      1 Year(s)


    135. For how many years has the body been in existence?
      46 Year(s)


    136. Please indicate the budget in US$ of the body for the last fiscal year.
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      22,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      3.80 (specify currency)



    137. To what entity is the body accountable?
      The Council of MICPA


    138. Approximately how many days per year does the body meet in full session (including teleconferences)?
      8 Day(s)



     

     

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