Malaysian Institute of Accountants

In Malaysia, the Audit Oversight Board (AOB) and the Malaysian Institute of Accountants (MIA) are responsible for establishing and operating quality assurance (QA) mechanisms in the jurisdiction. Both systems are reported to be in line with SMO 1 requirements.

MIA maintains a practice review program to assess compliance of its member firms with all applicable professional standards during the performance of their audit work. MIA reports that it raises awareness of the Practice Review Program to its members and other stakeholders. MIA has plans to increase the program’s capacity and continues to conduct regular seminars on audit quality enhancement. It has processes in place to address the requirements of SMO 1 on an ongoing basis.

Since 2016, to strengthen small and medium-sized practices (SMP), MIA has collaborated with MICPA to operate a Quality Assessment Program, which is a continuing professional development program that aims to enhance the audit quality of SMPs. MICPA’s roles under this collaboration is to carry out reviews of financial statements and the implementation of ISQM 1 while MIA is responsible for sourcing participants for the program.

In 2021, MIA launched a dedicated webpage to promote the implementation of ISQM, repackaging some of the resources made available by the IAASB including First-time Implementation Guides, Fact Sheets and YouTube videos. In 2022, additional webinars and targeted workshops were conducted to support members, especially the SMPs to adopt the new QM standards. In 2023, MIA ran 2 webinars on ISQM and reports that it will continue to conduct more webinars and targeted workshops with the topics focusing more on addressing the challenges faced by members especially the SMPs in adopting the QM standards. MIA has also published video recordings of the past ISQM webinars conducted by the AASB on the QM dedicated webpage.

Current Status: Sustain

In Malaysia, Initial Professional Development (IPD) and Continuing Professional Development (CPD) requirements for professional accountants are set independently by the two PAOs in the jurisdiction: the Malaysian Institute of Accountants (MIA) and the Malaysian Institute of Certified Public Accountants (MICPA).

MIA currently maintains a system that is overall in line with the latest IES requirements. MIA accredits accounting degree programs for the purpose of admission as C.A. (M) and provides ongoing feedback to universities; conducts the MIA Qualifying Examinations; implements the Chartered Accountant’s Relevant Experience (CARE) practical experience program; and requires continuing professional education for members.

The present Chartered Accountant’s Relevant Experience Program (CARE) is overall aligned to the IES 5 whereby a mentor-mentee approach has been adopted and the aspiring applicants must complete a minimum of 36 months of working experience under the supervision of a Chartered Accountant. The aspiring applicant must also demonstrate the fulfilment of technical and other competencies, and those achievements must be verified by the mentor accordingly.

The Education Board of MIA has developed the MIA Competency Framework (MIA CFM) that sets the baseline competencies for accountancy professionals and is benchmarked against the IES. The MIA CFM focuses on three-proficiency levels namely Foundation, Intermediate and Advanced. Following the release of the MIA CFM, the Education Board is carrying out its implementation plans which includes:

• Development of new Relevant Practical Experience Program in line with the three proficiency levels of the IES; and
• Development of new accreditation guidelines and criteria in line with the IES.

The MIA Education Board also works closely with fellow regulators on accounting education such as the Ministry of Higher Education and the Malaysian Qualifications Agency in the development of Program Standards of Accounting and policy documents that are in line with the MIA CFM and IES.

To promote further continuing education activities, MIA is producing various technical and non-technical CPD programs relevant to the accountancy profession in the form of seminars, workshops, forums, and conferences. MIA regularly communicates with members on CPD requirements and promotes CPD courses via its website, e-learning modules, email campaigns, journals, and brochures.

In 2023, MIA placed significant emphasis CPD to ensure that its members remain competent and adhere to international standards. MIA aligned its CPD framework with the International Education Standard (IES) 7, requiring members to complete at least 120 hours of CPD over a rolling three-year period, with a minimum of 20 hours each year. Key developments in 2023 included offering a broad range of CPD programs, many of which were delivered virtually or in hybrid formats, The MIA also reports that it introduced complimentary CPD events and focused on upskilling members in areas like sustainability reporting and audit quality.

Current Status: Sustain

Under the Securities Commission Act 1993, the Auditing Oversight Board (AOB) is given legislative authority to set auditing standards. The AOB, however, has delegated this responsibility to the Malaysia Institute of Accountants (MIA). MIA’s Auditing and Assurance Standards Board (AASB) has adopted IAASB standards without modifications as the Malaysian Approved Standards on Quality Management, Auditing, Review, Other Assurance and Related Services.

MIA has established an ongoing process to ensure continuous adoption of the latest standards. MIA also reviews consultation documents issued by the IAASB, submits comments, and facilitates implementation of ISA for its members. In 2023, MIA conducted various targeted workshops, webinars, and Town Hall sessions on audit quality, including two complimentary webinars focused on sustainability assurance and the new quality management standards. MIA organizes events to train and educate its members on ISA and offers technical assistance by responding to technical enquiries. There is also ongoing collaboration with MICPA to produce manuals and practical guides for use of SMPs.

MIA has also issued Audit and Assurance Practice Guides (AAPGs) to support the quality and promote consistency of the work performed by professional accountants in applying the ISAs and the IAASB's other standards.

Current Status: Sustain

In Malaysia, ethical requirements for professional accountants are established by the two professional accountancy organizations (PAOs): the Malaysian Institute of Accountants (MIA), under the supervision of the Audit Oversight Board, and the Malaysian Institute of Certified Public Accountants (MICPA).

MIA has processes in place to address the requirements of SMO 4 on an ongoing basis. MIA’s Ethics Standards Board (ESB) has adopted the latest version of the International Code of Ethics issued by the IESBA, with some modifications. MIA reports that it raises members’ awareness of the IESBA Code of Ethics through seminars and public practice programs. The ESB has an ongoing process in place to review and comment on IESBA exposure drafts on proposed changes to the IESBA Code of Ethics, as well as fostering dialogue with members to discuss issues of application.

Each year, MIA conducted webinars on the latest and upcoming changes to the Code such as the revisions to the non-assurance services and fee-related provisions. An ethics quiz is also run alongside these webinars to promote an active understanding of the Code. Apart from this, MIA also provides updates on developments in the Code during its Town Halls which were held three times a year.

Current Status: Sustain

The Department of the Accountant General of Malaysia is responsible for the accounting functions of both Federal and State governments in Malaysia It has developed Malaysian Public Sector Accounting Standards (MPSAS), which are primarily drawn from IPSAS and endeavors to comply with the requirement of IPSAS where possible. While the standards in Malaysia are developed in line with accrual-basis accounting, application is still in the transition phase and legislation mandating accrual accounting is still pending approval by Parliament.

MIA does not have direct responsibility for defining public sector financial reporting requirements, but it has representatives in the Government Accounting Standards Advisory Committee. MIA’s own Public Sector Accounting Committee endeavors to promote IPSAS by sharing information with the Accountant General Department, reviewing IPSASB Exposure Drafts and other consultative documents and submitting comments, and sharing experience and expertise aimed at bringing about the implementation of accrual accounting in Malaysia’s public sector.

MIA educates its members on MPSAS adoption by sharing information with its members, offering relevant training, and providing technical assistance.

Current Status: Sustain

MIA maintains a system for conducting investigations and disciplinary hearings of its members.

MIA is continuously reviewing its rules to ensure compliance with the requirements of SMO 6. MIA has made significant progress by having cleared all its backlog cases since 2018 and finalized the standard operating procedures for its units and departments to enhance efficiency and effectiveness. It is also strengthening its human resources through the ongoing recruitment of staff with adequate competencies and experience in accounting and auditing. Since June 2016, MIA has employed an Executive Director to Head its Surveillance and Enforcement Division assisted by Senior Managers and Managers in Investigation, Disciplinary, Surveillance and Legal matters. In 2023, MIA handled 74 cases under its investigation and disciplinary process and has published the outcomes.

MIA is encouraged to provide IFAC with updates on its efforts to align its I&D system with the requirements of SMO 6.

Current Status: Review & Improve

Under the Financial Reporting Act 1997, the Malaysian Accounting Standards Board (MASB) was established as an independent authority to develop and issue accounting standards for the preparation of financial statements. Accounting standards for entities other than private entities are the Malaysian Financial Reporting Standards (MFRS), while private entities are required to use the approved accounting standards for private entities (MPERS). The MFRS framework is developed identical to IFRS and is updated on an ongoing basis. Meanwhile, the MPERS is identical to IFRS for SMEs except for requirements related to real estate.

MIA is responsible for other adoption and implementation support such as: providing guidance on the implementation of MFRS, reviewing exposure drafts and providing comments to the MASB, and participating in MASB’s standard-setting process via working groups and task forces. MIA educates its members on MFRS by offering relevant training and providing technical assistance.

Current Status: Sustain