PUBLIC PRACTICE PATHWAYS GUIDE:

Transcription

1 PUBLIC PRACTICE PATHWAYS GUIDE: MALAYSIA INTRODUCTION This guide gives you an overview of the requirements to practise as an accountant in Malaysia. Broadly, we cover the regulatory environment in Malaysia and discuss registration requirements for accountants, including tax agents, GST tax agents, auditors and financial planners. We also briefly examine the risk, liability and insurance in Malaysia, as well as the Continuing Professional Education (CPE) requirements of the Malaysian Institute of Accountants (MIA). This material is intended to be an introduction to the requirements only. Members are responsible for ensuring they are aware of, and comply with, all regulators requirements in the countries in which they work. This material is aimed at CPA Australia members who do not provide public accounting services into Australia or New Zealand; who are interested in public practice; and who are based outside of Australia or New Zealand. CPA Australia members who provide public accounting services into Australia or New Zealand and earn more than $10,000 gross in fees each calendar year must hold a Public Practice Certificate. This requirement applies to all members, no matter where in the world they are located. AUTHOR Dr Cheah Foo Seong, FCIS, FIPA, MBA Henley, LLM Staffordshire, LLD. Dr Cheah Foo Seong is the Consultant Corporate Services of Tricor Corporate Services Sdn. Bhd a leading international corporate service, governance advisory and business consulting organization in Malaysia. He is the Past President of the Malaysian Institute of Chartered Secretaries and Administrators (MAICSA). He served as Hon. Secretary of the Corporate Secretaries International Association (CSIA) for the period He has authored for MAICSA many practice books on corporate law, disclosures for directors, and corporate governance principles and practices. He is also actively involved in the teaching and training of corporate directors. He wrote the Directors Manual, Malaysia and Guide to Company Secretarial Practice, Malaysia (2nd edition), which were published by CCH. In June 2008, he jointly authored and published Corporate Governance in Malaysia: Principles and Practices. His latest book on the Malaysian Companies Act 2016 An Overview was published by Sweet & Maxwell of Thomson Reuters in October He is a panel of writers for the Annotation to Companies Act 2016 due to be published by Sweet & Maxwell by the end of 2017.

2 CONTENTS Malaysian accountants and the regulatory framework 3 Qualifying Examination (QE) of the Institute 6 Frequently asked questions (FAQs) on QE 5 Registration of accountants 6 Requirements and conditions for holding a Practising Certificate 7 Requirements for a company auditor and company liquidator 8 Requirements for a licensed tax agent or tax consultancy 8 Requirements for a licensed GST Tax Agent under Royal Malaysian Customs 9 Requirements for financial planner and capital market positions 10 Requirements for governance consultancy 11 Setting up a public practice in Malaysia 11 Summary of professional services 13 Continuity of practice in the event of death or incapacity of a sole practitioner 13 Quality Assurance and Practice Review 13 Audit Oversight Board auditors of public interest entities and schedule funds 14 Audit Oversight Board recognition of foreign auditors 15 Continuing Professional Education (CPE) 17 By-law and Section 410 Continuing Professional Education 17 Putting the By-laws into practice for CPE 18 Detailed examples of structured and unstructured learning 19 Annual CPE audit 20 CPE Exemption 20 Risk, liability and insurance in public practice 21 Registration as public accounting corporations, firms or limited liability partnerships 22 References and further reading 22 2

3 MALAYSIAN ACCOUNTANTS AND THE REGULATORY FRAMEWORK Under the requirements of Sections 22 and 23 of the Accountants Act 1967, you can t practice or hold yourself out as an accountant in Malaysia unless you are registered as a member of the Malaysian Institute of Accountants (MIA). This includes holding company positions such as finance manager, accounts manager, financial controller, general manager finance or any other similar descriptions. Therefore, if you intend to work as an accountant, you must register with MIA. Members of CPA Australia who hold CPA status are eligible for admission to MIA without further requirement. This recognition is given under the First Schedule, Part II of the Accountants Act 1967 (see Table 2.1 below). The accountancy profession in Malaysia is regulated by an Act of Parliament, known as the Accountants Act 1967 (the Act) and the Malaysian Institute of Accountants (Membership and Council) Rules The Act was enacted to regulate and develop the accountancy profession in Malaysia, and establishes a statutory body called The Malaysian Institute of Accountants (the Institute) for carrying out the following functions: a) to determine the qualifications of persons for admission as members b) to provide for the training and education by the Institute or any other body, of persons practising or intending to practise the profession of accountancy a. to approve the Malaysian Institute of Accountants Qualifying Examination and to regulate and supervise the conduct of that Examination c) to regulate the practice of the profession of accountancy in Malaysia d) to promote, in any manner it thinks fit, the interests of the profession of accountancy in Malaysia e) to render pecuniary or other assistance to members or their dependents as it thinks fit with a view to protecting or promoting the welfare of members f) generally to do such acts as it thinks fit for the purpose of achieving any of the aforesaid objects (Accountants Act 1967, s. 6). The Act also controls the use of the word accountant, which is specifically to be used by members of the Institute. Section 22(c) of the Act prohibits a person, unless he is registered as a chartered accountant under this Act and has his principal or only place of residence within Malaysia, to adopt, use or exhibit the term accountant or any other term of like description in such circumstances as to indicate or to be likely to lead persons to infer that he is a chartered accountant or is qualified by any written law to practise the profession of, or is in practice as, a chartered accountant. In the same provision (Accountants Act, s. 2), no person, unless registered as a chartered accountant under the Act and has his principal or only place of residence within Malaysia, may practice or hold himself out as a chartered accountant, auditor, tax consultant, tax adviser or any other like description, or adopt, use or exhibit the terms chartered accountant, auditor, tax consultant, tax adviser or any other term of like description. However, an advocate or any person authorized under any other law for the time being in force in Malaysia is not prevented from carrying on the work of a tax consultant or a tax adviser. Accountants in Malaysia are employed in banking, commerce, industries and educational institutions. Others may set up firms to provide professional services in the field of auditing, financial planning, tax and corporate services. Every member may describe himself or herself as an accountant in Malaysia and shall use the designations Chartered Accountant, Licensed Accountant or Associate Member with the designatory letters C.A.(M), L.A.(M) or A.M.(M) respectively. 3

4 Table 2.1 Schedule of recognised Malaysian public and private universities whose graduates in accounting gain direct entry into membership of the Institute. FIRST SCHEDULE (Sections 14 and 15) PART I (a) the final examination of the University of Malaya for the Diploma Perakaunan (Diploma in Accounting); (b) the final examination of the University of Malaya for the Ijazah Sarjana Muda Perakaunan (Degree of Bachelor of Accounting); (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) (o) the final examination of the Universiti Kebangsaan Malaysia for the Ijazah Sarjana Muda Perakaunan (Kepujian) (Degree of Bachelor of Accounting (Honours)); the final examination of the MARA Institute of Technology for the Diploma Lanjutan Perakaunan (Advanced Diploma in Accountancy); the final examination of the Universiti Teknologi MARA for the Ijazah Sarjana Muda Perakaunan (Degree of Bachelor of Accounting); the final examination of the Universiti Utara Malaysia for the Ijazah Sarjana Muda Perakaunan (Kepujian) (Degree of Bachelor of Accounting (Honours)); the final examination of the Universiti Pertanian Malaysia for the Ijazah Bacelor Perakaunan (Kepujian) (Degree of Bachelor of Accounting (Honours)); the final examination of the Universiti Putra Malaysia for the Ijazah Bacelor Perakaunan (Kepujian) (Degree of Bachelor of Accounting (Honours)); the final examination of the Universiti Islam Antarabangsa for the Ijazah Sarjana Muda Perakaunan (Kepujian) (Degree of Bachelor of Accounting (Honours)); the final examination of the Universiti Sains Malaysia for the Ijazah Sarjana Muda Perakaunan (Kepujian) (Degree of Bachelor of Accounting (Honours)); the final examination of the Universiti Utara Malaysia for the Degree of Bachelor of Accounting (Honours)(Information System), [Subs. P.U.(A) 28 1/2007] the final examination of the Universiti Tenaga Nasional for the Degree of Bachelor of Accounting (Honours), the academic programme for which first commenced from the academic year 2002/2003 onwards; [Ins. P.U.(A) 140/2004; Am. P.U.(A) 281/2007] the final examination of the Universiti Multimedia for the Degree of Bachelor of Accounting (Honours), the academic programme for which first commenced from the academic year 2002/2003 onwards; [Ins. P.U.(A) 140/2004; Am. P.U.(A) 281/2007] the final examination of the Kolej Universiti Sains dan Teknologi Malaysia for the Degree of Bachelor of Accounting (Honours); [Ins.P.U.(A) 281/2007] the final examination of the Universiti Malaysia Sabah for the Degree of Bachelor of Accounting (Honours); [Ins. P.U.(A) 281/2007; Am. P.U.(A) 161/2011] 4

5 (p) the final examination of the Universiti Industri Selangor for the Degree of Bachelor of Accounting (Honours); [Ins. P.U.(A) 161/2011] (q) the final examination of the Univerditi Sultan Zainal Abidin for the Degree of Bachelor of Accounting (Honours); [Ins. P.U.(A) 141/2013] (r) the final examination of the Universiti Sains Islam Malaysia for the Degree of Bachelor of Accounting (Honours); [Ins. P.U.(A) 194/2014] (s) the final examination of the Universiti Tunku Abdul Rahman for the Degree of Bachelor of Accounting (Honours); [Ins. P.U.(A) 194/2014] (t) the final examination of the INTI International University for the Degree of Bachelor of Accounting (Honours). [Ins. P.U.(A) 113/2015 PART II The recognized bodies for the purposes of sections 14(1)(b) and 15(b) are: [Am. Act A1099] (a) Malaysian Association of Certified Public Accountants; (b) Institute of Chartered Accountants of Scotland; (c) Institute of Chartered Accountants in England and Wales; (d) Institute of Chartered Accountants in Ireland; (e) Association of Chartered Certified Accountants (United Kingdom); (f) Institute of Chartered Accountants in Australia; (g) Australian Society of Certified Practising Accountants (CPA Australia); (h) New Zealand Chartered Accountants; (i) Canadian Institute of Chartered Accountants; (j) Institute of Chartered Accountants of India; and (k) Chartered Institute of Management Accountants (United Kingdom). Source: Commissioner of Law Revision, Malaysia, Accountants Act 1967, First schedule. Qualifying Examination (QE) of the Institute The Institute had introduced its own Qualifying Examination as a new avenue for admission to membership for those who do not possess an accounting qualification recognised under Part I and Part II of the First Schedule of the Accountants Act Those graduates who possess a qualification relating to accounting, business and finance degree recognized by the public Services Department of the Malaysian Government or other qualifications approved by the MIA Council are eligible to sit for the Qualifying Examination. Prospective candidates should 5

6 consult the Institute s examination guidelines, which shall be read subject to the Malaysian Institute of Accountants Qualifying Examination Rules The booklet is designed to guide candidates, prospective candidates, and the Examination Body, and it is divided into two parts, namely the Institute s examination guidelines in Part One, and the examination syllabus in Part Two. Part One Examination Guidelines, comprised the following: (a) Eligibility for Qualifying Examination (b) Application for Registration (c) Issuance of Certificate of Candidacy (d) MIA QE Assessment (e) MIA QE Workshop (f) Application for the Qualifying Examination (g) Fees (h) Misconduct in Final Examination (i) Examination Results (j) Re-sitting of the MIA Qualifying Examination (k) Completion of the MIA Qualifying Examination (l) Candidates Requiring Special Assistance (m) Revision to the MIA QE Guidelines. Part Two Examination Syllabus, comprised of the following: (a) Syllabus Outline (b) Syllabus Content Specification (c) Examination Material (d) Business and Company Law (e) Auditing and Assurance Services (f) Taxation (g) Advanced Financial Accounting and Reporting. Frequently asked questions (FAQs) on QE Q1 A1 Q2 A2 Qualifying Examination (QE) What is the objective of the MIA QE? It provides an alternative pathway into MIA membership admission for graduates who do not possess a qualification recognised under Part I and Part II of the First Schedule Accountants Act Who is eligible to sit for the MIA QE? An individual shall only be eligible to sit for the MIA QE if he possesses: 1. A qualification relating to accounting, business or finance recognised by the Public Service Department or other qualifications approved by the MIA Council. The qualification should not be any lower than a first degree. 2. A qualification having 60% accounting content out of the total coursework of the qualification. 6

7 Q3 A3 Who will conduct the MIA QE? Section 15A(1) of the Accountants Act states that the MIA QE shall be conducted by the Examination Body that is from the Higher Educational Institutions specified in Part I of the Third Schedule or the Recognised bodies specified in Part II of that Schedule. Q4 A4 Q5 A5 Q6 A6 Q7 A7 Part I of the Third Schedule consist of the following universities: Universiti Malaya Universiti Kebangsaan Malaysia Universiti Teknologi MARA Universiti Utara Malaysia Universiti Putra Malaysia Universiti Islam Antarabangsa Universiti Sains Malaysia Part II of the Third Schedule refers to: The recognised body for the purpose of section 15A(1) is the Malaysian Institute of Certified Public Accountants. Who has been appointed the Examination Body? At present, the MIA Council has appointed Universiti Teknologi MARA (UiTM) as the Examination Body. How many papers are required for the MIA QE? Four (4) papers are required for the MIA QE as follows: - Business & Company Law - Auditing and Assurance Services - Taxation - Advanced Financial Accounting & Reporting. All papers are compulsory and no exemption will be given to applicants. When is the examination being held? In March and September, twice every calendar year. Where should the potential candidates apply for the MIA QE? Application forms can be obtained from the Institute or downloaded from the MIA website under the Qualifying Examination Link. Application can also be made online, however, you are still required to submit the hardcopy of the application form together with the supporting documents which are certified true to the Institute. 7

8 Q8 A8 Q9 A9 Are private institutions allowed to conduct preparatory courses to prepare students for the MIA QE? At present, MIA has not authorised or approved any party or institution to conduct preparatory courses for the purpose of the MIA QE. It is based on self-study. MIA provides guidelines, syllabus, pilot papers and past years Q & A that can be downloaded from MIA website. How much are the fees? New applicants may register online. However, the Institute would still require applicants to submit a hardcopy of the application form with all the required documents. 1. Application for candidacy (i) Processing fee : RM (non-refundable) (ii) Candidacy fee : RM (valid for 2 years from the date of approval issued by the Examination Committee as stated in the Certificate of Candidacy) Interested applicants are requested to submit the application form for candidacy together with the processing and candidacy fees amounting to RM300/- to MIA. For those whose applications are rejected by the Examination Committee or withdrawn by the applicants, MIA will refund the candidacy fee of RM Re-register : RM ; or 3. Renewal : RM 200 Q10 A10 Q11 A11 Where will the MIA QE be held? It will be held at UiTM main campus, Shah Alam and its selected branch campuses, and MIA branch offices. Is there any time limit for the candidates to complete the MIA QE? Yes. Candidates are expected to complete all four papers within four (4) years from the date of the first Certificate of Candidacy. Candidates who are unable to complete all four (4) papers within the first four year period may apply for extension of time to complete the examination provided that the candidates have passed one paper within the first four years of the candidacy. The candidates shall be allowed to renew their Certificate of Candidacy with the prescribed fee for a further extension of two years and are required to complete the remaining paper(s) within the next four consecutive examination sittings. If the candidates failed to complete all four papers within six (6) years they would be required to retake all four (4) papers, again without considering the number of paper(s) that the candidates had passed at previous attempts. 8

9 Q12 After QE, what is next? A12 Upon completion of all 4 papers, successful candidate will be issued with a Certificate of Successful Completion from MIA. To qualify for MIA membership, in addition to obtaining the said certificate, he/she would need 3 years of relevant experience in areas related to accounting. Q13 If you did not sit for the paper which you have registered, will your exam fee be refunded? A13 If you request to withdraw from an examination before the closing date of acceptance of entries, you will obtain certain percentage of refund of the fee paid. Please refer to the Examination Guidelines on the amount entitled for the refund. If you request to withdraw from an examination after the closing date for acceptance of entries, you will not be entitled to any refund of the fee paid. However, the Examination Committee may grant a refund to a candidate: (i) on receipt of satisfactory medical evidence by reason of illness; or (ii) on such other circumstances as the Examination Committee may deem fit. MIA QE Assessment Q14 A14 Q15 A15 Q16 A16 Q17 A17 What is the MIA QE Assessment? The MIA QE Assessment is the new assessment methodology for the MIA Qualifying Examination (QE) system which comprises workshop evaluations (40%) and final examination (60%). Candidates are required to attend and participate in the workshop evaluations before they can sit for the final exam. What are the objectives of the MIA QE Assessment? To provide an improved and effective academic support to the QE candidates via: (i) A structured and comprehensive Study Text to candidates as study reference (ii) Self-monitoring their performance on a continuous basis What are the expected outcomes from the workshops? The expected outcomes from the workshop are: 1. To help candidates perform better in the final exam; 2. To enhance candidates understanding on the subject matter; 3. To provide a structured approach for timely completion of MIA QE; 4. To ensure graduates of the MIA QE are equipped with other value added soft skills such as communication, teamwork and problem solving. Who can participate in the MIA QE Assessment? All candidates with a valid Certificate of Candidacy are encouraged to enroll. Q18 When are the closing dates to register for the MIA QE Assessment? A18 Candidates are required to register for the workshops and examination at least 4 months before the examination month. The closing dates for both registrations are as follows: (a) For March sitting 30 November of the previous year (b) For September sitting 31 May of the current year. 9

10 Q19 How do the candidates register for the MIA QE Assessment? A19 Candidates are required to submit the workshop and examination registration forms with the required fees to MIA. The forms can be downloaded from the MIA website or they can be obtained from MIA offices. Q20 Is it compulsory for candidates to attend and participate in the workshops? A20 Yes. In order to be eligible to sit for the MIA QE final examinations, it is compulsory for candidates to attend and participate in the workshops. Q21 How many times candidates need to attend the workshops? A21 Q22 A22 Q23 A23 Q24 A24 A25 Q26 A26 Q27 A27 Q28 A28 The candidates are required to attend for four (4) workshops for three (3) papers i.e. Business & Company Law, Auditing and Assurance Services and Taxation (8 hours per workshop X 4 workshops = 32 hours). A total of five (5) workshops for Advanced Financial Accounting & Reporting paper (8 hours per workshop X 5 workshops = 40 hours). When the workshop will be conducted? The workshop will be conducted during weekends; Saturday and Sunday. What are the types of evaluations held in the workshops? The workshops evaluations are in the form of quizzes, assignments, group project paper and group presentation. Where will the workshops be held? The workshops are held at:- (a) Kuala Lumpur venue to be confirmed; (b) MIA Regional Offices in Johor Bahru, Penang, Kota Kinabalu and Kuching *minimum required numbers 10 pax Candidates should come to the workshop well prepared as suggested below: (a) Self study = proposed self learning time for each paper: 8 hours for each workshops (8 hours x 4 workshops = 32 hours) (b) Practice relevant questions from the MIA QE Study Text, past years Q & A and other related references. What can the candidates do if they require extra guidance? Candidates who require extra guidance are encouraged to attend an Intensive 3-day Revision Course (IRC) conducted by MIA two (2) weeks prior to the final examination (optional). What should I do if I failed in the final examination? You may retain the workshops evaluation marks provided you will resit for the final examination in the next immediate examination sitting. What should I do if I am absent from the final examination due to valid reason(s)? You may retain the workshop evaluation marks for the next immediate examination sitting subject to the approval of the appeal by the Examination Committee. 10

11 Q29 A29 How much are the fees for the MIA QE Assessment? FEES PER PAPER TOTAL Examination fee RM RM1, Workshop fee (inclusive of the Study Text and Workshop Manual) RM1, RM1, RM6, TOTAL RM1, RM2, RM7, Q30 A 30 What are the modes of payment accepted by MIA? MODE OF PAYMENT Employees Provident Fund REMARKS To MIA requesting supporting letter for EPF withdrawal within 1 month before the workshop starts Credit Card By faxing the Credit Card Authorisation Form to Click HERE to download the form. Cheque Bank Draft Cash Should be made payable to 'MALAYSIAN INSTITUTE OF ACCOUNTANTS' Please write your full name, purpose of payment and contact number at the back of the cheque Post-dated cheque is not acceptable Should be made payable to MALAYSIAN INSTITUTE OF ACCOUNTANTS Walk-in at MIA offices 11

12 MIA QE New Updates Q31 What are the new updates in the MIA QE? A31 The MIA Council recently has agreed to allow applicants with qualifications other than those recognised by the Public Service Department (PSD) of the Government to qualify for the MIA Qualifying Examination (QE) under Section 15A(2) of the Accountants Act At the moment the MIA QE is only open to applicants with qualifications recognised by the PSD. Therefore, applicants who possesses a qualification relating to accounting, business and finance other than those recognised by the PSD are now eligible to qualify for the MIA QE subject to further review by the MIA Examination Committee. The requirement of 60 per cent accounting content from the total qualification will remain unchanged as mentioned in Rules 3(3) of the MIA QE Rules Q32 What prompted MIA to allow applicants with qualifications other than those recognised by the PSD to qualify for the MIA QE? A32 Since 2003, MIA relies on PSD s recognition in order to control and maintain the quality of the MIA QE. However, it is noted that the recognition awarded by the PSD is solely for the purpose of appointment into the Public Service and not for the purpose of the MIA QE eligibility. As a result, there were a number of qualified applicants who hold qualifications relating to accounting, business and finance, other than those recognised by the PSD, who were deemed not eligible to qualify for the MIA QE. MIA is providing a new opportunity to qualified applicants to become a MIA member through the MIA QE pathway. Q33 How different are the eligibility requirements compared with the previous existing requirements? A33 Existing An applicant must hold a qualification of not lower than a first degree in relation to accounting, business or finance recognised by the PSD. The accounting content in the qualification shall form not less than sixty per cent of the total qualification. New An applicant who holds a qualification relating to accounting, business and finance other than those recognised by the PSD may apply to qualify for the MIA QE. The accounting content in the qualification shall form not less than sixty per cent of the total qualification. The eligibility to qualify for the MIA QE is subject to the review and approval by the MIA Examination Committee. The eligibility to qualify for the MIA QE is subject to the approval by the MIA Council. 12

13 Q34 Does this mean that holders from Universities/Colleges which are not recognised by the PSD are eligible to qualify for the MIA QE? A34 Yes. The eligibility to qualify for the MIA QE is subject to the approval by the MIA Council. Q35 How do I apply to be a MIA QE candidate under the new updates? A35 Application forms can be obtained from the Institute or by downloading from the MIA website.to download the form, go to Education Menu, and click on Qualifying Examination to download the form. Application can be made online, however, you are still required to submit the hardcopy of the application form together with the supporting documents directly to the Institute. All photocopied documents must be certified true by either a member of MIA, member of Parliament, Magistrate, Justice of Peace, Notary of Public or any other persons authorised under the provisions of the Statutory Declaration Act Alternatively, a declaration which acknowledges that copies of the documents are true originals may be performed before and attested by a Commissioner for Oaths. Please ensure that all supporting documents are forwarded to MIA before the closing dates. Please see below for details. Q36 When is the closing date to apply for the MIA QE under the new updates? A36 Eligible applicants are requested to submit the application form along with the necessary documents and registration fee to MIA on or before the closing date for acceptance of applications as stated below: Examination Sitting March September Closing Date 31 October of the previous year 30 April of the current year Q37 Who will process the MIA QE application under the new updates? A37 The MIA Education Department will process all MIA QE applications. All applications will be reviewed by the MIA Examination Committee before submitting to the MIA Council for approval. Q38 How long does it take for MIA to process the application under the new updates? A38 The application process will take a minimum of two months to be approved by the MIA Council. REGISTRATION OF ACCOUNTANTS Pursuant to section 17 of the Act, a person who has been registered and continues as a member of the Institute shall describe himself as a Chartered Accountant, and may use the letters C.A.(M) after his name. Membership of the Institute is accorded upon payment of the prescribed fee, and based on the following entitlement to be admitted, if: a) he has passed any of the final examinations specified in Part I of the First Schedule, and has not less than three years practical accounting experience in the service of a chartered accountant or in a Government department, bank, insurance company, local authority or other commercial, financial, industrial or professional organization or other undertaking approved by the Council 13

14 b) he is a member of any of the recognized bodies specified in Part II of the First Schedule [including CPA Australia] OR c) he is eligible to sit for and has passed the Malaysian Institute of Accountants Qualifying Examination and has not less than three years practical accounting experience in the service of a chartered accountant or in a Government department, bank, insurance company, local authority or other commercial, financial, industrial or professional organization or other undertaking approved by the Council (Accountants Act 1967, s.14(a) (c)). The person to be admitted by the Council as a member of the Institute shall not be less than twenty-one years of age and in the opinion of the Council he is a fit and proper person to be admitted as a member. After having become a member of MIA, you may choose to be either a public practice service accountant or an employed accountant. A member in public practice means a chartered accountant or licensed accountant who, as a sole proprietor or in a partnership, provides or is engaged in public practice services in return for a fee or reward for such services, other than as an employee (Section 2, Malaysian Institute of Accountants (Membership & Council) Rules 2001). Public practice services may include the following: auditing, including internal auditing accounting and all forms of accounting-related consultancy accounting-related investigations or due diligence forensic accounting taxation, tax advice and consultancy bookkeeping costing and management accounting insolvency, liquidation and receiverships provision of management information systems and internal controls provision of secretarial services under the Companies Act 1965 OR such other services as the Council may from time to time prescribe. Most public accountants firms would provide public professional services to their clients in the following fields: company auditor and liquidator licensed tax agent and/or licensed GST Tax Agents or tax consultant financial planner OR governance consultant in a particular specialization, such as merger and acquisition, internal control, or recovery and insolvency consultant. Requirements and conditions for holding a Practising Certificate A member who intends to enter public practice should apply to MIA for a Practising Certificate if he/she intends to: i. Apply for audit licence and later to set up or be a partner of an existing audit firm ii. Set up or be a partner of an existing non-audit firm or iii. Be a director in a limited or unlimited company which offers accounting, taxation and secretarial services under the Companies Act Please refer to Section of Institute s By-Laws (On Professional Ethics, Conduct and Practice) for further information. 14

15 The requirements for a Practising Certificate i. MIA member Chartered Accountant/Licensed Accountant category ii. Attended the Public Practice Programme Effective 1 January 2014, the validity of certificate for the Public Practice Programme has been reduced to 3 years from the date of attendance for a member who has the intention to apply for an audit approval from the Ministry of Finance (MOF). However, for practising certificate holders who have attended the Public Practice Programme before 1 January 2014, the validity of the Public Practice Programme remains at 5 years for audit approval application. This validity period applies to practising certificate holders making their first attempt for the audit approval only. Those who intend to set up a non-audit firm or are Companies Directors of companies registered with the Companies Commission of Malaysia (SSM) are not subject to this validity. The conditions for a Practising Certificate to remain valid are: a) the member must commence public practice within six months from the date of issuance of the practising certificate and shall practice on a full-time basis. The member issued with a practising certificate but is unable to commence practice within the six months must return the certificate to the Institute immediately upon the expiry of the period b) the certificate will be renewed automatically on a year to year basis for a period of twelve months each commencing on the first day of July next following, whereupon the annual practising certificate fee shall become due and payable c) a member shall cease to be entitled to a practising certificate if he fails to pay the annual practising certificate fee by the last day of December in the year in which it becomes due and payable pursuant to subrule (4), unless the Council decide otherwise d) the fee for practising certificate is RM250 annually (MIA 2009a). Renewal of Practising Certificate a) The annual practising certificate fee of RM will be due for renewal on 1 July of every year upon obtaining the practising certificate. Rule 9(6) of the Institute s Membership and Council Rules 2001 provides that a member shall cease to be entitled to a practising certificate if he fails to pay the annual practising certificate fee by the last day of December in the year in which it becomes due and payable unless the Council decides otherwise. b) Proof of purchase of a professional indemnity insurance shall be enclosed for the purpose of the annual renewal of the practising certificate as provided under By-Law B-10.3 of the Institute s By-Laws (On Professional Conduct and Ethics) Replacement of lost/misplaced Practising Certificate If a member would like to request a replacement certificate, the Statutory Declaration form would need to be submitted together with the replacement fee as per specified below (inclusive of GST): RM53.00 (unidentified/ unsupported reason) or RM10.60 (with valid reason, i.e. stolen, snatched or any reason with proof of police report) Note: Please download from the MIA website a Statutory Declaration Form (PC) or a Replacement of Practising Certificate cover letter. The registration and licensing requirements for various professional services are given in the following sections. 15

16 Requirements for a company auditor and company liquidator The auditing of public companies and non-listed companies can only be undertaken by a member of MIA who has fulfilled the licensing requirements of the Ministry of Finance. This means that the member of MIA will need to apply to the Ministry of Finance for an audit licence. This is only granted if the applicant: is a member of MIA has more than five years of audit experience in an audit environment is a fit and proper person has successfully passed an interview conducted by the Ministry of Finance. The requirements for licensing to be an approved company auditor are in compliance with section 263 of the Companies Act Even after having obtained a licence to be an approved company auditor, he must also comply with section 265 of the Companies Act 2016 to have his firm of auditors be registered with the Registrar of Companies under the following types of audit firm: a firm in the name of the firm as auditors of persons who are partners of that firm or a firm in the name of the limited liability partnership or foreign limited liability partnership. Any approved company auditor may also apply for an approved liquidator s licence issued by the Ministry of Finance in the same manner and be subject to section 433(3) of the Companies Act (see below for the procedure of application) Besides obtaining an approved company auditor licence or an approved liquidator licence, the Institute s By-Laws require members who wish to go into practice, including an audit practice or those intending to provide public practice services as listed above, to apply for a Practising Certificate. The Practising Certificate is issued only once and the member should retain the certificate for as long as they remain in public practice or engage in providing professional services full time. Members in public practice shall not practise with individuals who are not members of the Institute. Audit Licensing Requirements Members are hereby informed of the latest eligibility criteria for application to become approved company auditors. The new eligibility criteria which were approved by the Ministry of Finance with effect from 1 January 2014 are as follows: 1. Is a member of the Malaysian Institute of Accountants (MIA) under the Chartered Accountant category. In addition, the applicant has to be a member of the MIA for at least one (1) year. 2. Possess a valid Practising Certificate issued by MIA. 3. Possess sufficient working experience in audit practice in a public accounting firm: (a) The candidate must have at least five (5) years of working experience prior to application. The five (5) years accumulative working experience can be obtained prior to and/or after becoming a Chartered Accountant of the MIA. i. At least three (3) years must be in audit work. ii. At least one (1) year out of the above three (3) years shall be in an audit supervisory role. The audit supervisory role is defined as being responsible for audit management including consultation with audit partners and has experience in giving opinions for financial statements and be directly involved in audit planning. (b) Candidates who have left audit practice, but still within a three (3) year period prior to the application to be approved company auditors, are still eligible to apply. (c) For candidates who have left audit practice for more than three (3) years, they must work for at least one (1) year in audit in the Malaysian environment. (d) Experience in other countries can also be considered however, they must work for at least one (1) year in audit in the Malaysian environment. 4. Candidates are required to attend the Public Practice Programme organised by the MIA. 16

17 Liquidator licensing requirements An applicant to be an approved liquidator must be an approved auditor holding a valid Practising Certificate from MIA. The person must have obtained the audit approval for at least one (1) year and must have at least two (2) years of experience in liquidation work prior to application. Application for audit/liquidator licence Effective from 8 March 2016, applications for audit and liquidator licences must be through the BLESS portal. For further enquiries please contact: Jabatan Akauntan Negara Malaysia Unit Kemajuan Profesyen Bahagian Pembangunan Perakaunan dan Pengurusan Kompleks Kementerian Kewangan No.1, Persiaran Perdana Presint Putrajaya (General line: ) Attn: En. Mohamad Saiful Nizam Khan Bin Abdul Sattar Tel : snizam.sattar@anm.gov.my Attn: Mohamad Fareez bin Abd Wahab Tel : fareez.wahab@anm.gov.my Fax: / 1042 Web: With effect from 1 April, 2010 an approved company auditor who audits a public interest entity must register with the Audit Oversight Board established by the Securities Commission (refer to Audit Oversight Board Auditors of public interest entities below). 17

18 Requirements for a licensed tax agent or tax consultancy Except for an MIA member who holds a valid audit licence, all members must apply to the Inland Revenue Board (IRB) for a tax licence under section 153(3)(c) of the Income Tax Act 1967 before the accountant can provide tax advisory and consultancy work to clients. To obtain a tax licence, the applicant must be a member of MIA (or any other approved professional body) and fulfil the following conditions: have at least five years of work experience in taxation attend an interview conducted by the IRB, and pass the interview be a fit and proper person. Responsibilities and duties The IRB has from time to time issued guidelines on the responsibilities of tax agents, the Tax Agents Guidelines. According to these guidelines it is the responsibility of a licensed tax agent to: quote the approval number, indicating the date of such approval on all correspondence with the IRB inform the IRB when he ceases to be the tax agent of a client. Letters and return forms addressed to taxpayers who are no longer clients shall be returned with an appropriate notation ensure his own tax affairs shall be kept up to date. All returns, accounts and such like ought to be lodged in a timely fashion and tax payable settled within the time allowed. It is further expected that the tax agent shall carry out all acts on behalf of the taxpayer under the Income Tax Act. These include: advising on records to be maintained assisting in completing tax returns impressing upon the clients their obligation to pay their dues as required under the law attendance at field audits at clients premises attendance at investigation, interviews, negotiations and proceedings filing of appeals and attendance at negotiation hearings and further appeals. A member of MIA with five years practical tax experience either in the public or private sector is eligible to apply under section 153(3)(c) of the Income Tax Act by submitting the application form (Borang EC) with evidence of having attended the most recent Annual Budget Seminar organized by IRB, and having acquired 40 Continuing Professional Development (CPD) or Continuing Professional Education (CPE) points in any recognized organization tax seminar. The application process requires the applicant to attend an interview with the IRB to verify competency and understanding of the taxation provisions and public rulings issued by IRB. The licence issued by the Ministry of Finance is valid for two years. It must be renewed at least one month before the expiry date. An unsuccessful applicant may re-apply six months after the date of rejection. The usual processing fee and relevant documents must accompany the application. Practising and providing taxation services under a company incorporated under the Companies Act 2016 For incorporation purposes, the Registrar of Companies of the Companies Commission of Malaysia (CCM) would require the promoters to provide a supporting letter of no objection from MIA. The Institute would issue a letter of no objection to persons who wish to incorporate a company providing tax services on condition that all directors meet the conditions set by the Institute as follows: a. Directors who are MIA members must hold valid practising certificates issued by the Institute; and b. At least one of the directors must be an approved tax agent licence holder under Section 153 of the Income Tax Act,

19 These requirements must be complied with at all times. The company is not allowed to offer accounting services. Procedures In order to proceed with the application for a support letter, please submit the following documents to MIA: a. A completed Form TC-A. b. A copy of the latest tax agent licence issued by the Ministry of Finance. c. A copy of the query letter from the Companies Commission of Malaysia (CCM). d. Form under Section 28 filed with the CCM (for change of firm name only) e. Form under Section 58 for the existing company (if any) f. Practising Certificate application (Applicable only for MIA members, who have yet to hold a valid Practising Certificate). Please be informed that only complete requests will be processed and the process will take about seven (7) working days. Requirements for a licensed GST Tax Agent under Royal Malaysian Customs A licensed GST Tax Agent must attend and passed the GST Course organised by the Royal Malaysian Custom, comprising not less than 36 hours or not less than 6 days and pass the examinations conducted by Royal Malaysian Customs. In the Guidelines issued by the Royal Malaysian Customs on applications to become a GST Tax Agent, the following categories of individuals resident in Malaysia may apply: a) have obtained an accountancy degree or diploma listed under First Schedule, Part 1, Accountants Act 1967 b) passed the first degree in finance, business and/or economics from a public university or a private university in Malaysia or from an overseas university accredited by the Ministry of Education c) members of an accountancy body listed in First Schedule, Part II, Accountants Act 1967 or d) members of Malaysian Institute of Accountants (MIA) or Malaysian Institute of Chartered Secretaries and Administrators (MAICSA). The applicant on approval must attend the GST course organised by the Royal Malaysian Customs [Jabatan Kastam Diraja Malaysia (JKDM)] or courses organised jointly by JKDM with MATA, CTIM or MIA. The total number of hours for the course must not be less than 36 hours or not less than six days. He/she must pass the examination on GST conducted by JKDM, besides having the necessary work experience as required, unless exempted: a) five (5) years practical experience, after obtaining the appropriate degree in GST work with the government or in private sector or b) five (5) years practical experience, after becoming a member of the professional body in GST work with the government or in private sector or c) five (5) years experience as a lecturer in GST / Taxation at the diploma level or higher in any institution of higher learning, whether in a public or private institution. As well as overseas institution of higher learning accredited by the government of Malaysia. Application for the GST Course and licensing as GST Tax Agent can be made online at Treasury and Customs. 19

20 Requirements for financial planner and capital market positions Financial planning in Malaysia is a relatively new profession with the formation of the Financial Planning Association of Malaysia (FPAM) in December Generally, the financial planning profession requires a diverse and broad knowledge of the financial services industry, including: insurance, unit trust and stockbroking the use of various financial services holistically in estate planning, investment planning, retirement planning and education planning the use of insurance policies as a device for long-term avoidance of business risks. Accountants who wish to pursue this career path as a Financial Planner must obtain certification from FPAM as a Certified Financial Planner (CFP ) and apply to Bank Negara Malaysia for the Financial Adviser s Licence. Reference to the following should be made: Licensing Guidelines on Application for Financial Adviser s Licence under Insurance Act 1996 Application Form for Financial Adviser s Licence under section 17 of the Insurance Act Application Form for Appointment of Financial Adviser s Representative under section 70(1A) of the Insurance Act. Effective 11 October 2007, financial planners with a Capital Markets Services Licence are also eligible to register with the Federation of Malaysian Unit Trust Managers (FMUTM) as corporate unit trust advisors (CUTA). Licensing by the Securities Commission Accountants who are engaged in the capital and securities market should be aware that the Securities Commission (SC) is the regulator of the capital and securities market in Malaysia. The SC is empowered to issue licences for market intermediaries. The Capital Markets and Services Act 2007 (CMSA) that came into force on 28 September 2007 has consolidated the Securities Industry Act 1983, the Futures Industry Act 1993 and Part IV of the Securities Commission Act 1993 which deals with fund raising activities in the capital market. The CMSA introduces a single licensing regime for Capital Markets Services Licences that are granted, on application to the Securities Commission, for the following regulated activities listed in Schedule 2 [subsection 2(1) and 58(1)]: dealing in securities trading in futures contracts fund management advising on corporate finance investment advice financial planning. However, section 58(2) of CMSA exempts a Specified Person, whether as a principal or agent who carries on a business in any regulated activity, from holding a Capital Markets Services Licence. This exemption applies to the persons or classes of persons specified in Schedule 3, inter alia any accountant who is a member of the institute established under the Accountants Act 1967 [Act 94] in practice whose carrying on of the regulated activity of advising on corporate finance or financial planning is solely incidental to the practice of his profession (CMSA 2007, Schedule 3, para. 3). This means that the accountant must not be operating a business relating to financial planning, investment advice, advising on corporate finance, fund management, trading in futures contracts and dealing in securities. Through its authority to issue licences, the SC regulates the market by ascertaining the fitness and propriety of companies and individuals applying for licences. In considering whether an applicant is fit and proper to hold a licence, the SC takes into account the following factors: probity ability to perform such functions efficiently, honestly and fairly financial status reputation, character, financial integrity and reliability. 20

21 For more information, please access the following on the Securities Commission website: Capital Markets and Services Act 2007 Capital Markets and Services Regulation 2007 Licensing Handbook Guidelines on Regulation of Markets. Requirements for governance consultancy An accountant having several years of wide practical experience in audit, taxation, internal audit and in a corporate advisory role on merger and acquisition may provide governance consultancy. This is an independent non-audit type of consultancy that certain clients such as listed corporations would require to fulfil governance requirements under listing requirements. Such types of consultancy are: internal control and risk control reporting as required by the Malaysian Code on Corporate Governance and Bursa s Listing Requirements merger and acquisition planning and compliance with the Malaysian Code on Take-Overs and Mergers of the Securities Commission Act 1993 as an independent accountant to advise on due diligence process of an initial public offer of a corporation. In general, consultancy services on compliance requirements do not require any form of licensing, but for certain capital and securities issue matters it is advisable to check with the Securities Commission for clearance. SETTING UP A PUBLIC PRACTICE IN MALAYSIA A member in public practice will be governed by the Act, the Rules and the By-Laws (On Professional Conduct and Ethics) of the Institute. He/she is prohibited from public practice through a body corporate except where it is allowed by other statutes for limited areas of public practice, namely tax. In most instances, the member is allowed to be engaged in public practice as a sole practitioner or in partnership with another member(s). The Act and By Laws [prohibit] the sharing of profits with non-members. All public practice firms are described as firms of chartered accountants (MIA 2009b). Only members registered as chartered accountants and with a valid practising certificate can describe and hold themselves out as chartered accountants in public practice and are able to set up firms providing public practice services such as accounting, audit, liquidation, tax and other related services. However, the practice of audit, liquidation and tax are licensed under other legislation[s] and regulations (MIA 2009b). A member who is in public practice must hold a valid practising certificate and shall describe his or her firm as a firm of Chartered Accountants. Every member in public practice who signs any reports or other documents in a professional capacity either as an individual or for and on behalf of the firm shall only use the designation Chartered Accountant(s). Members also have to have their principal or only place of residence in Malaysia to be in public practice in Malaysia. Members who wish to set up a practice must first obtain the approval of the Institute on the use of the firm s name. It should not be a trade or association name. Upon the setting-up of his firm, the practice must be registered with the Institute (MIA 2009b). An audit firm and all the partners must be registered with the Registrar of Companies under section 9(4)(a) of the Companies Act The partners or a public practice providing auditing services must be members of the Institute and must possess a valid audit licence granted by the Accountant General s Office of the Ministry of Finance. However, for a public practice that provides services other than auditing, such as accounting, corporate secretarial, and governance consultancy services, no additional licensing requirements are needed. For a tax service and consultancy public practice firm, the tax practitioner must obtain a licence to act as a tax agent under the Income Tax Act The practice of taxation may be carried out under a body corporate, a sole 21