Malta Institute of Accountants

Member | Established: 1965 | Member since 1970

The MIA was founded in 1942 and is a voluntary membership organization uniting over 2,500 professional accountants. The institute provides professional guidance, technical support, and continuing professional education to professional accountants in Malta. It is the only body recognized by the Accountancy Board such that individuals who successfully pass the MIA’s joint qualification scheme with the Association of Chartered Certified Accountants are permitted to receive the warrant and designation of Certified Public Accountant by the Accountancy Board.

In addition to being a founding Member of IFAC, MIA is also a member of Accountancy Europe (formerly known as the Federation of European Accountants).

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Statements of Membership Obligation (SMO)

The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.

Methodology
Last updated: 07/2018
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SMO Action Plan

Status of Fulfillment by SMO

• SMO 1: Quality Assurance

  All quality assurance (QA) reviews are undertaken by the Accountancy Board’s Quality Assurance Unit—which operates a QA review system in line with SMO 1 requirements, according to a self-assessment conducted by MIA. Therefore, MIA’s primary involvement in this area is to support the Accountancy Board’s efforts and provide educational and technical guidance to its members.

  As a result of the implementation of the 2016 EU Audit Directive, MIA indicates that the Accountancy Board is comprised of all non-practitioners. MIA has nominated its members who are no longer practicing to sit on the Board. In addition, the institute has also nominated practicing members to assist the Board in properly carrying out its QA function although these individuals are not involved in the decision-making of the Board.

  Within MIA, the institute has established a technical team that reviews the yearly report issued by Accountancy Board to identify knowledge gaps resulting from recent QA visits. MIA reports that the latest Accountancy Board review highlighted the deficiencies in audit reporting, quality control issues, adequate documentation and continued professional education amongst others. The institute has worked to support members in these areas by offering seminars on quality control as well as the transition to the new auditor report standard and format.

  Additionally, the institute notes it provides members with (i) guidance such as the ISA Audit Programs and ISQC 1 manuals; (ii) a published list of QA service providers; and (iii) Technical Pronouncements to help carry out specific engagements.

  The MIA also indicates that in 2014 and 2015 it offered courses tailored to small- and medium-sized entities focusing on the small- and medium-sized practitioner (SMP) perspective and a simplified, practical auditing approach. The institute has also shared the resources and tools published by IFAC’s SMP Committee to its members and states that its most recent issue of its quarterly journal highlighted SMPs, quality control, and the new auditor reporting standard.

  Current Status: Sustain

• SMO 2: International Education Standards

  The Accountancy Profession Act 1979 specifies the initial professional development (IPD) requirements for the profession. The law stipulates that in order to practice publicly, individuals must hold a Master’s degree in accounting from the University of Malta or hold a Bachelor’s degree and then complete a course of theoretical instruction that is recognized by the Accountancy Board. Two other routes a candidate may pursue to receive an accountants’ warrant is obtaining the MIA—Association of Chartered Certified Accountants (ACCA) Joint Qualification or the Institute of Chartered Accountants in England and Wales Chartered Accountant qualification, which have been deemed the equivalent of a Master’s in accountancy.

  MIA indicates that it strives to ensure its examination scheme remains in line with the IES and that students sitting for the exam are able to acquire advanced professional accountancy knowledge to perform their necessary job functions within the Maltese context. Therefore, the MIA—ACCA joint scheme includes variant papers on Maltese Corporate and Tax law.

  In addition, the MIA reports that it is engaging with the Ministry of Education (MoE) and Accountancy Board to strengthen and align IPD and CPD requirements with the IES. The MIA details that it plans to set up an Education Advisory Group specifically focused on the accounting profession in Malta. The main objectives of the Group is to promote the accounting profession in Malta amongst the younger generation, to ensure that the University of Malta’s curriculum is in line with international standards, and to guide accountants in their career.

  Furthermore, the Accountancy Profession Act also states that professional accountants must fulfill continuing professional development (CPD) obligations. Specific CPD requirements for professional accountants have been established by the Accountancy Board and the MIA also issued mandatory CPD for its members. Both organizations’ CPD requirements are reported to be in line with IES 7 and 8.

  The MIA notes that it offers a variety of CPD opportunities such as courses, conferences, seminars, organized technical discussion meetings, web-based learning activities, service on technical committees, and lecture preparation and lecturing for its members to participate in. MIA makes its annual CPD calendar available online for its members to identify relevant trainings.

  Finally, MIA also publishes news of IAESB, IAASB, and IESBA standard-related updates and guidance in the institute’s quarterly journal, The Accountant, and in the institute’s newsletter.

  In its next Action Plan submission, MIA should provide an update on the activities its Education Advisory Group has undertaken in regards to promoting the revised IES requirements to key stakeholders such as the MoE, Accountancy Board, and University of Malta. For example, MIA could consider facilitating an evaluation of the University of Malta’s curriculum in collaboration with the Centre for Financial Reporting Reform and utilizing its IES benchmarking tool. Additionally, MIA should consider submitting comments to IAESB exposure drafts as part of sharing their perspective and contributing to the international standard-setting process.

  Current Status: Review & Improve

• SMO 3: International Standards on Auditing

  While the Companies Act 1995, as amended in 2008, stipulates that ISA as issued by the IAASB are to be applied in all audits, the MIA has always required its members to apply ISA as a self-regulatory requirement. Accordingly, the MIA’s activities in this area primarily revolve around providing its members with implementation support.

  For example, throughout 2016–2017, the MIA organized trainings on relevant topics such as risk assessment and strategy, and the new auditor reporting standards. The institute also previously hosted a Small- and Medium-sized Practitioners Forum which included a session on auditor reporting and a joint training with the Institute of Chartered Accountants in England and Wales. MIA states plans to organize more courses in 2018 focused on auditing standards and ethics.

  The institute indicates that it further supports its members by issuing implementation guidance, maintaining a Technical Helpdesk, and raising awareness about the standards through the institute’s quarterly journal, The Accountant, and an e-newsletter.

  Finally, the MIA also notes that it is active in the international standard-setting area by directly submitting comments to the IAASB’s exposure drafts and other public consultations as well as participating in Accountancy Europe’s Council and Auditing Working Party and IFAC’s SMP Committee.

  It would be beneficial for MIA to consider how it works with the University of Malta to incorporate the new standards into accountancy education program.

  Current Status: Sustain

• SMO 4: Code of Ethics for Professional Accountants

  The Accountancy Profession Act 1979 stipulates that the Accountancy Board is responsible for issuing ethical standards—which are based on the 2009 IESBA Code amended in certain areas to reflect additional requirements contained in the EU regulations—for all professional accountants. As a voluntary membership organization, MIA requires that all members who join adhere to the Accountancy Board’s Code of Ethics.

  Historically, MIA details that it is had a key role in ensuring that the Accountancy Board’s ethical standards align with the IESBA Code of Ethics. With the 2016 IESBA Code of Ethics now effective, the MIA indicates that it is supporting the Accountancy Board to draft an update of the Code of Ethics for Warrant Holders to include new standards in the 2016 IESBA Code of Ethics that became in July 2017. MIA outlines the following actions it has undertaken to support this initiative: informing the Accountancy Board of the new standard; setting up a joint working group between the Ethics Committee of the MIA and members from the Quality Assurance Unit of the Accountancy Board; and preparing a draft update of the Code of Ethics for Warrant Holders Directive including the NOCLAR standard. The Accountancy Board is reviewing the changes and once approved, the revised Code of Ethics will be mandatory for all warrant holders and members of the MIA.

  As noted, MIA has an established Ethics Committee that works to raise awareness amongst members on ethical matters with reference to the IESBA Code of Ethics through its quarterly journal, The Accountant, and through continuing professional development (CPD) programming. In 2018, the MIA plans to hold CPD sessions addressing NOCLAR. The institute also ensures the availability of the Technical Desk Service to assist its members with technical queries related to the Code of Ethics.

  Finally, the institute participates in international standard-setting by submitting comment letters to IESBA-issued exposure drafts–for example, the MIA submitted comments on the IESBA’s NOCLAR pronouncement.

  It would be beneficial for MIA to consider including plans to promote the inclusion of the new ethical standards into the University of Malta’s accountancy education programming.

  Current Status: Review & Improve

• SMO 5: International Public Sector Accounting Standards

  Malta’s government is responsible for the adoption of public sector accounting standards. Since 2013, the government has been working toward the transition to accrual-basis IPSAS. Government accounting is still done on cash-basis but as of 2016, five IPSAS are in draft form and under consideration for adoption by the government. The government intends to work toward full-IPSAS adoption and implementation with the following timeline: (i) by December 2017, IPSAS based financial information will be produced for the Ministry of Finance as a first pilot; (ii) a number of pilot roll-outs at other ministries will be undertaken by December 2018; and (iii) full implementation of IPSAS-based accounting will be rolled out to 57 ministries/departments by December 2019.

  MIA uses its best endeavors to support the accrual IPSAS implementation roadmap by offering workshops on IPSAS and partaking in consultations with the Ministry of Finance. In July 2016, the MIA reports it established a Public Sector Committee that has reviewed and discussed six IPSAS with the government.

  Additionally, MIA has been active in engaging with the University of Malta to include IPSAS in its syllabus for the Higher Diploma in Public Accounting and Finance. Beginning in October 2018, the institute reports that the diploma is being upgrade to a degree in Public Sector Accounting that will be sponsored by the government. The new degree will include an increased focus on IPSAS and public sector auditing and financial management. Additionally, the Public Administration degree includes units on government accounting that refer to IPSAS and the IPSASB conceptual framework. Furthermore, the MIA states that it encouraged the University of Mata to include IPSAS in its elective credit on public sector accounting for the Master’s in Accountancy and research, dissertations, and overall knowledge on IPSAS has increased over the last few years.

  Lastly, MIA’s Public Sector Committee disseminates information on IPSAS to its members through its publications such as the quarterly journal, The Accountant, and other communication means.

  Current Status: Sustain

• SMO 6: Investigation and Discipline

  In Malta, the Accountancy Board is responsible for investigating and disciplining (I&D) professional accountants—all warrant holders—while the MIA is responsible for I&D procedures in regards to its members’ misconduct and failure to comply with membership rules. Accordingly, the MIA’s statue and bylaws stipulate that Investigations, Disciplinary, and Appeals Committees be established to carry out the institute’s disciplinary proceedings.

  The MIA utilizes both a complaint-based and information-based approach to initiating investigative and disciplinary procedures. MIA outlines the disciplinary procedure as the following: (i) the appointment of an investigating committee, (ii) referral of the matter to the Investigations Committee, (iii) drafting a formal charge and informing the member, (iv) refer the matter to the Disciplinary Committee at which time the Disciplinary committee may also ask the member for more information, and finally (v) if the Disciplinary Committee or the Appeals Board finds that the charge has been proven, it will issue a decision.

  In 2017, the MIA conducted a self-assessment of its I&D system against the SMO 6 requirements and found that its I&D system is mostly in line with the SMO 6 requirements with a few areas for improvement such as the composition of MIA’s Disciplinary Committee, liaising and linking the results of Accountancy Board’s QA reviews with MIA’s I&D procedures, and public interest considerations.

  The MIA indicates that it works to make both members and the general public aware of the I&D procedures so that issues may be brought forward in an orderly manner. For example, the institute’s bylaws are available on its website for public access.

  Based on the results of the MIA’s self-assessment of its I&D system, the institute is encouraged to consider strategic plans it may undertake to strengthen its I&D procedures to fully align with the SMO 6 requirements. For example, MIA may consider including non-accountants, such as lawyers, on its Disciplinary Committee, and coordinating with the Accountancy Board regarding QA review results. Finally, the institute is also encouraged to share the SMO 6 requirements with the Accountancy Board to promote full compliance at the jurisdiction level.

  Current Status: Review & Improve

• SMO 7: International Financial Reporting Standards

  With IFRS adopted in law, MIA’s role in this area is focused on drafting the standards for small and medium-sized entities (SMEs) and supporting members with the implementation of the accounting standards adopted in the jurisdiction.

  In 2007, the MIA first developed General Accounting Principles for Smaller Entities (GAPSE) through a two-year consultation and cooperative process with the Accountancy Board. In 2016, the GAPSE were replaced by General Accounting Principles for the Small and Medium-sized Entities (GAPSME) to take into account the EU Single Accounting Directive which was intended to simply the preparation of statutory financial statements for micro and SMEs. The GAPSME contain differences from the IFRS for SMEs; however, the MIA was of the view that in the Maltese context smaller companies needed a substantially simplified accounting framework. These standards were added as amendments to the Companies Act. MIA details that throughout the drafting process it set up an ad hoc working group to develop the institute’s position on the accounting standards and engaged extensively with small and medium-sized practitioners.

  MIA’s activities to provide implementation support to members include providing several trainings on the standards throughout the year as part of its continuing professional development program; maintaining an e-library with guidance and a comparison on GAPSME and IFRS for SMEs; operating a Technical Helpdesk; and raising awareness about IFRS and exposure drafts issued by the IASB through its regular publications.

  Current Status: Sustain

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