Accounting Education in Malaysia:

The Role of Universities and ASEAN Academic Integration

Presentation at National Association of CPAs Education (NACPAE) on 20 October during its 24th Accounting Teachers’ Conference with Philippines Institute of Certified Public Accountants with Theme “Sharing Success

Beyond Borders” on 19-21, 2015 at Sunway Putra Hotel, Kuala Lumpur

Hasnah Haron,

Universiti Malaysia Pahang

AGENDA

• Pathway to become a Chartered Accountant in Malaysia

• Selected Stakeholders that Shaped the Accounting Degree of Universities

• Halatuju Perakaunan- Future Direction of Accounting Degree

• Challenges of Accounting Education

• Development of Regulation for Undergraduate Accounting Education

• The Committee to Strengthen the Accountancy Profession in Malaysia (CSAP)

• Possibility of ASEAN ACADEMIC Integration

• Conclusions

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Qualified Accountant in Malaysia

• Need to be accepted as a member of the Malaysian Institute of Accountants (MIA).

• Obtain a recognized degree from accredited universities or a professional accountancy qualification and 3 years of approved experience

• In addition, some candidates may be required to sit

for the MIA Qualifying Examination (QE).

Pathway to Become a Chartered Accountant

Malaysian Institute of Accountants

STATUTORY BODY

Established under Accountants Act 1967 under the

Ministry of Finance.

MIA represents the voice of all accountants in the

country.

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Pathway to Become a Chartered

Accountant ...

Accountants Act 1967

Sections 22 & 23 of the Act

require a person residing in

Malaysia to be registered with the

MIA if he practises or holds

himself out as a chartered

accountant, licensed accountant,

auditor, tax consultant, tax adviser

or any other term of like

description

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Pathway to Become a Chartered

Accountant …

Recognised

accountancy body

programme

Recognised university

accountancy degree

programme CA(M)

Unrecognised

university degree/

accountancy body

programme

G

R

A

D

U

A

T

E

S

Become a full member

of recognised

accountancy body

Pass the MIA Qualifying

Examination (MIA QE)

Obtained 36 months of relevant

practical experience

Pathway To Become A Chartered Accountant

C.A.(M)

Obtained 36 months of relevant

practical experience

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MIA RECOGNISED UNIVERSITIES (Part I, First Schedule of the Accountants Act, 1967)

• Bachelor of Accounting (Hons),University of Malaya

• Bachelor of Accounting (Hons), Universiti Kebangsaan

Malaysia

• Bachelor of Accounting (Hons), Universiti Teknologi MARA

• Bachelor of Accounting (Hons) and Bachelor of Accounting

(Hons) (Information System), Universiti Utara Malaysia

• Bachelor of Accounting (Hons), Universiti Putra Malaysia

• Bachelor of Accounting (Hons), International Islamic

University Malaysia

• Bachelor of Accounting (Hons), Universiti Sains Malaysia

• Bachelor of Accounting (Hons), Universiti Tenaga Nasional

(commenced from the academic year 2002/2003 onwards)

• Bachelor of Accounting (Hons), Universiti Multimedia

(commenced from the academic year 2002/2003 onwards)

• Bachelor of Accounting (Hons), Universiti Malaysia

Terengganu

• Bachelor of Accounting (Hons), Universiti Malaysia Sabah

• Bachelor of Accounting (Hons), Universiti Selangor

• Bachelor of Accounting (Hons), Universiti Sultan Zainal

Abidin

• Bachelor of Accounting (Hons), Universiti Sains Islam

Malaysia

• Bachelor of Accounting (Hons), Universiti Tunku Abdul

Rahman

• Bachelor of Accounting (Honours), INTI International

University

7 16 Universities

Accounting Education in Malaysia

Public Universities

• Universiti Malaysia Sarawak (UNIMAS)

• International Islamic University Malaysia (IIUM)

• Universiti Teknologi Malaysia (UTM)

• University Malaysia Terengganu (UMT)

• University of Malaya (UM)

• Islamic Science University of Malaysia (USIM)

• Universiti Malaysia Sabah (UMS)

• Universiti Utara Malaysia (UUM)

• Universiti Sains Malaysia (USM)

• Universiti Pendidikan Sultan Idris (UPSI)

• Universiti Teknologi MARA (UITM)

Private Universities

• Universiti Tenaga Nasional

• Universiti Tun Abdul Razak

• Universiti Tunku Abdul Rahman

• KDU University College

• UCSI University

• Asia Pacific University of Technology & Innovation

• Kuala Lumpur Metropolitan University College

• SEGi University

• Management & Science University

• INTI International University & Colleges

• MAHSA University

• Monash University Malaysia

• HELP University

• LIMKOKWING University of Creative Technology

Professional Bodies

• Association of Chartered Certified Accountants (ACCA)

• Certified Practicing Accountants Australia (CPA Australia)

• Chartered Institute of Management Accountants (CIMA)

• Institute of Chartered Accountants in Australia (ICAA)

• Institute of Chartered Accountants in England and Wales (ICAEW)

• Malaysian Institute of Certified Public Accountants (MICPA)

Source: https://www.studymalaysia.com/education/top-stories/study-in-malaysia-accounting-courses

MIA RECOGNISED PROFESSIONAL BODIES (Part II, First Schedule of Accountants Act, 1967)

Malaysian Institute of Certified Public Accountants (MICPA)

Institute of Chartered Accountants of Scotland

Institute of Chartered Accountants in England and Wales (ICAEW)

Association of Chartered Certified Accountants (UK)- (ACCA)

Institute of Chartered Accountants in Ireland

Chartered Institute of Management Accountants (UK) – (CIMA)

CPA Australia

Institute of Chartered Accountants of New Zealand (ICANZ)

Institute of Chartered Accountants in Australia (ICA Australia)

Canada Institute of Chartered Accountants

Institute of Chartered Accountants of India

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11 Professional Bodies

Recognised

Introduced on 1 November 2009.

Structured assessment programme

which monitors the practical

experience of the mentees for 36

months.

Supports the International

Federation of Accountants (IFAC)

International Education Standard

(IES) 5.

Mentor – Mentee Concept

MIA CARE( CHARTERED ACCOUNTANT

RELEVANT EXPERIENCE) PROGRAMME

To provide guidance to the graduates and

ensure that they acquire the appropriate

degree of professional competencies in order

to qualify as a chartered accountant

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AREAS OF COMPETENCY

TECHNICAL COMPETENCIES

1. Auditing

2. Taxation

3. Management Accounting

4. Financial Accounting & Reporting

5. Business Performance & Planning

6. Information System

7. Finance

8. Insolvency

REQUIREMENT

Technical Competencies

1 Area (from Level 1 to Level 3) or

2 Areas (from Level 1 to Level 2)

Generic Competencies

All 3 areas of competencies

GENERIC COMPETENCIES

1. Professionalism & Ethical Behavior

2. Personal Attributes

3. Professional skills

MINIMUM REQUIREMENT

1 Area

(from Level 1 to Level 3)

or

2 Areas

(from Level 1 to Level 2)

All three (3) areas of competencies

ASSESSMENT & VERIFICATION

Mentor - C.A.(M)

Employer

Level 1-Gathering Information

Level 2- Analysis

Level 3- Applying Knowledge and Skills

MIA MEMBERSHIP (as at 30 September 2015)

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TOTAL MIA MEMBERS & MEMBERSHIP

GROWTH (as at 30 September 2015)

14

MEMBERSHIP BY EMPLOYMENT (as at 30 September 2015)

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Selected Stakeholders that Shaped the Accounting Degree of Universities

UNIVERSITIES

Malaysian Institute of Accountants(MIA)-

Accreditation of Accounting Programmes- Listed in Accountants Act 1967

Professional Bodies: •MICPA •ACCA

•CPA AUSTRALIA •NZCA •ICAEW

Employers

Malaysian Qualification Agency- Division of Ministry of Higher Education. Quality Assurance of Public and Private Universities

International Monitoring Bodies

Standard Setting Bodies

*Note: For private

universities

wanting to be listed

in Accountants Act-

must adhere to

requirements of

MIA.

HALATUJU – The Reassessment Report on Accounting Programmes at Public Universities in Malaysia

HALATUJU 1 (2001) HALATUJU 2 (2006) HALATUJU 3 (2013)

• From 3 years to 4 years to include professional accounting element

• Discuss with Professional Bodies

• Require 4 years programme before MIA can accredit the programme

• 134 credit hours, 4 years • IES 1- 8 Ethics in syllabus • Introduced Integrated

case study- invite practitioners and academia to write cases and use cases to teach.

• Introduce Competency Assessment before becoming MIA for both professional and B. Acctg degree

• Problem based method was introduced

• Reduced to 126 credit hours • Does not specify duration but

mention credit hours to graduate

• Include more Financial Reporting subjects- framework based teaching was introduced

• Lecturers encouraged to have professional qualification and attachment with industry

• Malaysian professional qualification to be developed- jointly with MIA and MOHE.

• Increase industrial training from 8 hours to 12 hours.

• Case teaching • Student Centred Learning • Involvement of lecturers from

industry 17

• Curriculum review and standardized

• 4 years Curriculum instead of 3 years

2001-2006

Way Forward I

• Problem Based Learning

• Student Centered Learning

• Case Study Approach

• Competency Examination Registration

2006-2013

Way Forward II • Need for professional qualifications; professional courses training

• Accounting + Finance Courses

• Framework Based Teaching

2013 and coming

Way Forward

Halatuju ( Future Direction of Accounting Degree)- Summary

Halatuju 1 Halatuju 2 Halatuju 3

HALATUJU 2 (2006)

• Improvements in curriculum

• Evaluation system

• Problem Based Learning

• Industrial Training

• Introduce Integrated Case Study

• Industrial attachment and professional membership of staff

• Smaller class size for better interaction

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Halatuju 2 (2006)- Proposed Competency Framework

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HALATUJU 3 (2013) Figure 2: Framework for Governance of Accounting Ecuation

in Malaysia

MONITORING

SUPPLY OF GRADUATES

MOE MOF

Higher Education

Department

MQA

MIA

Treasury

Accountant General

Securities Commission

Bank Negara

CCM MASB

B AOB

Private Entities

Non-Private Entities

JOINT COMMITTEEE

Higher Education Providers Audit Firms

IES 1-4 IES 5-6 IES 7-8

Hala Tuju 3 Committee

Challenges of Accounting Degree 1.Accreditation By MIA and Quality Assurance MQA

• MIA will audit curriculum based on the curriculum and duration as suggested by Halatuju 1.

• Public Universities who wish to have MIA accreditation will abide by this. Example 4 year programme and specified number of credit units.

• Private Universities- are subjected to Malaysian Qualification Agency’s accreditation. Allow to offer Accounting Degree over 3 years but if want to practice must apply to MIA for accreditation.

• Majority Private Universities DO NOT apply to MIA for accreditation but rather collaborate with professional bodies to offer professional papers.

• Then they go for accreditation from MIA after obtaining professional qualification. Thus students obtained a degree plus professional accounting qualification.

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Creates a “Double

Standard”

2. Report on the Observance of Standards and Codes (

ROSC (World Bank)

1. University programmes recognised by MIA should be periodically reviewed

2. Members of the foreign professional bodies will be required to demonstrate knowledge and competency in Malaysian taxation and company law

3. MIA Qualifying Exam be strengthened to a professional level assessment

4. Emphasis on research reduces the number of accounting students

5. Hala Tuju 2 (2006) to be reassessed 6. Decrease in accounting graduates 7. Lecturers excludes highly competent professionals who do not

hold post-graduate qualifications, as only PhD and/or Master Degree holders can become lecturers.

NKEA (PEMANDU- Government Transformation Programme)

1. Improve industry perception of qualifications from local universities

2. Strengthening the qualification from local universities 3. Improve the quality of Chartered Accountants 4. Increase the number of Chartered Accountants

Development of Regulation for Undergraduate Accounting Education

Source: Hashanah Ismail, Mazlina Mustapha & Badriyah Minai / Sains Humanika 2:3 (2014), 9–12

2014(Dec) CSAP Report Joint Ministry New Body to Regulate Accountancy Profession 3 yrs duration from

4 yrs. 1 year can be for professional qualification

(CSAP)

The Committee to Strengthen the Accountancy Profession in Malaysia

(CSAP)

• CSAP was established as part of the country action plan to address issues raised in the Report on the Observance of Standards and Codes in Accounting and Auditing (ROSC AA) released by the World Bank in 2012.

• In addition to addressing the issues raised in the report, the CSAP considers this as the opportune juncture to identify ways to further strengthen the accountancy profession in Malaysia and enhance the contribution of the accountancy profession in nation building, given the changing economic landscape and the need for Malaysia to remain competitive as a nation.

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Roles of Key Players in Accountancy Education and Training

MIA Local Institutions Institutions of higher learning

Competency Exam by MIA All graduates are treated as equal although differing CGPA

Silo effect where curricula are viewed simply as collections of independent courses

Admits graduates from recognised universities without any assessment of baseline competencies

Relevant working experience is post rather than within B.Degree program

Delays in incorporating changes – faculty lacks experience, knowledge and development opportunities

No review of B.Acctg programme eventhough have received approval more than 5 years

Differing questions and marking stds of examination questions

Emphasis on research productivity

Different ability and capacity of universities

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NRB- New Regulatory Body

Conduct Board- responsible for disciplinary process

Standards Board- will set professional and ethcial stds to be complied by accountants

Education Board- responsible for the professional development needs of the professional and ensure Malaysia has adequate number of processional accountants

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Recommendations CSAP

1.New Regulatory Body to Be Set Up

– Registering and regulating accountants in Malaysia

– Ensure all relevant professional standards are alignes with our market needs and are effectively enforced

– Drive the development of accountancy education and set standards to ensure the needs of the markets are met

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Recommendations CSAP

2. Ensure baseline competencies are met

3. Professional accountancy bodies to assist transfer of knowledge to institutions of higher learning

4. Reward lecturers teaching accountancy programme accordingly

5.Cooperation between industry and universities for applied research

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Northern Corridor- Leveraging on the inherent

strengths of each region for balanced economic

development CO

OP

ER

AT

ION

BE

TW

EE

N

ND

US

TR

Y -

AC

AD

EM

IA

Scenario in Malaysia • So while there is commonality in the interest of quality, the

role of the universities as the main delivery agent of future accountants are now sandwiched between meeting the demand of the profession to deliver more technical content in the curriculum with that of research emphasis of research status universities to publish as a priority over teaching.

• Both forces coerce the university, in particular academicians, to comply with two conflicting demands.

• Will the momentum to professionalise academia be stronger than the will to academise the profession? This is an agenda which academia should consider and actively pursue in order to sustain their relevance.

(Hashanah Ismail, Mazlina Mustapha & Badriyah Minai / Sains Humanika 2:3 (2014), 9–12)

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Role of Education in ASEAN ECONOMIC COMMUNITY

• Education underpins the development of ASEAN Economic Community (AEC).

• Education is one of many industries that will be affected by the AEC.

• The key factors that shape the economy of a country because quality education produces graduates who are responsible for the enhancement of the national economy. It will help create knowledge - based society and will contribute to the overall enhancement of the AEC.

• Accountants will be most in demand and successful will be those who can successfully operate in a more diverse, multi-market and multicultural work environment.

• The core challenges facing ASEAN in following the road map to AEC is one of education.

• ASEAN nations will need to prepare for the changes that will happen and plan how best to embrace them.

Ratio of Accountants to Population

Negara Total Accountants Population

Ratio of Accountants

to Population

Indonesia 15,940 245,420,000 1 : 15,397

Malaysia 30,236 29,518,000 1 : 976

Philippines 19,573 97,594,000 1 : 4,986

Singapura 27,394 3,818,000 1 : 139

Thailand 56,125 67,911,000 1 : 1,210

Jumlah 149,268 444,261,000 1 : 2,976

Singapore- Best ratio.

Harmonisation of Standards for ASEAN Accountants to provide free mobility or

exchange of ideas.

.

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Benefitting from ASEAN Integration

ASEAN Framework Agreement on Services (AFAS) :

• Facilitate mobility of accountancy services professionals across participating ASEAN Member States;

• Enhance the current regime for the provision of accountancy services in the participating ASEAN Member States; and

• Exchange information in order to promote adoption of best practices on standards and qualifications.

Regional ASEAN Players • Most ASEAN member states have become aware that the

creation of a common higher education space is a critical step towards the greater regional integration objective.

n Plan

ASEAN Country Education Strategic Planning

Brunei Darussalam Wawasan Brunei 2035

Indonesia Higher Education Long-term Strategy (HELTS 2003-2020)

Malaysia Malaysia’s National Higher Education Strategic Plan (NHESP 2007-2020)

Myammar Myanmar’s Vision of Education (2001-2031)

Philippines Long-term Development Plan (2010-2020)

Vietnam Education Development Strategy (2008-2020)

Brunei – NA

Cambodia –Not clear

Indonesia – Yes, IAI and IAPI

Laos – Yes, by LICPA and MoF

Malaysia – MIA:No Exams for recognised degree

Myanmar – Yes

Philippines –Yes, by the BOA

Singapore – Yes, by ISCA, if no accredited degree

Thailand – Yes, by FAP

Vietnam – Yes, by the MoF

Professional Examination before

Becoming a Chartered Accountant

Conclusion • MIA Accredited Universities in Malaysia are facing pressure

from many parties to offer a quality accounting education, namely MIA, CSAP, ROSC, and the government. – A decision need to be made as to whether there should be ONE

professional competency examination for both Accounting Degree and Professional Qualification before becoming a Chartered Accountant

• ASEAN countries have differing stage of economic development and differing regulations and education systems. – Harmonization is needed to resolve the differences before integration

of education system is possible- eg whether professional examination is needed, CPD points needed, and some similarity in the structure of curriculum, so as to allow ease of mobility and transfer of credits amongst universities in the ASEAN region.

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