ADDING MORE VALUES TO ACCOUNTING
MIA aims to help country meet 1:100 ratio, on par with developed countries, by working with academia
AN excerpt from an interview with Malaysian Institute of Accountants (MIA) president Datuk Mohammad Faiz Azmi and former vice-president Datuk Zaiton Mohd Hassan.
Question: As Malaysia progresses into a knowledgebased and digital economy, the government has set a target to increase the number of accountants to 60,000 by 2020 in an effort to support its transformation into a developed nation by 2020. To date how many accountants are serving the business community here?
Mohammad Faiz: If you look at MIA, we have 33,500 members. What we are referred to is chartered accountant. But the ambition is to have 60,000 members, but not necessarily chartered accountants. We must understand that certain industries do not need chartered accountants.
For example, shared services require accounting technician or graduate accountants. As far as technology is concerned, the accountant of today could do with better tools. We are moving away from using spreadsheet to using a proper system, and ultimately use apps to do accounting. It also opens up another window for accountants to be used like data analytics, because every corporate now has lots of data, even the government.
You need to be an accountant to understand what you are looking at, but you also need to have information technology (IT) skills to be able to extract or get the data up from the system to make it meaningful. That is something we are looking at now because we realise that some big accounting firms already have data analytics.
Q: With regards to fintech, or financial technology, how is the current breed of accountants embracing technology that automates repetitive and mundane financial analysis?
Mohammad Faiz: If you look at accounting, it is quite broad. You got accounts in businesses and many businesses are breeding themselves be it in fintech like banks and so on.
Those people in businesses are already adapting to it. If you take the accounting firms who want to do audit, they have to update their tools. All big firms doing audit do not do it on paper anymore. Everything is in electronic files. If that is not enough, we are using data analytic tools to be able to audit.
Why is that important? For 200 years, auditors have been doing things by sampling. When you do data analytic, you take 100 per cent of the data and look at it. Because you are looking at the entire population of data, you are able to get a better understanding as to what the company is doing, how they use the information, transaction and so on.
Of course, there is the third bunch called consultants. Who do you think is implementing the system? It is basically the accounting firms. Invariably you have firms that advise on the architecture, which help to bring in the system. It may not build the system but it will do the project management and so on. Then, they will validate the result like the data in and out later on.
MIA members are already in it (fintech). Whether it is in business or the firms, they already help to implement this in the country. That’s why it is not surprising that some of the big projects the government is embarking on concerns IT.
Invariably, the accountant will be more for the project. When you look at the 33,500 members, we have about 23 per cent in practice, more than 70 per cent in corporate sectors and we have two per cent academia and about eight per cent in the public sector. The bulk of our members are working in the corporate sectors.
Q: How important is an accountant to a country, company or organisation. How do accountants help to drive the country’s economy?
Mohammad Faiz: One of the interesting bits from the Security Content Automation Protocol (SCAP) report is that they actually analyse the number of people to accountants in developed and under-developed countries. It is interesting to note that in countries like Australia, the United Kingdom, Hong Kong and Singapore, the ratio is about 100 people for every accountant.
Malaysia’s ratio is like 1,000 people to one accountant. Also some research done by International Federation of Accountants (IFAC recognised that accountants contribute about US$500 billion (RM4.3 trillion) a year in terms of value to the society. Actually, we need more accountants, not less.
A lot of people may not afford to go to universities to do their degrees. That is one of the things that we are trying to address now. We are asking the government to allow us to change the Act.
However, not every accountant in Malaysia is a member of MIA. About 3,000 accounting students graduate from local universities every year and MIA has about 1,000 new members registered.
Malaysia is very interesting. All qualified accountants with professional qualification over the last 20 years understand the International Financial Reporting Standards (IFRS). Currently, we are the only Asean country adopting IFRS. When they travel abroad to Hong Kong, Singapore, Australia or China, our accountants are in great demand because we speak English, are willing to travel and IFRS-trained.
Q: Do we have enough qualified and competent accountants to meet the industry’s growing needs?
Mohammad Faiz: No. It goes back the to benchmark. It is 100:1 in developed countries but for Malaysia, the ratio is 1000:1. So, we always need more.
For me, it is not just about numbers, but the quality. People must have professional qualifications to be accountants. We had a number of roundtables between employers and universities to understand what the employers are looking for and what the universities are providing. I am quite grateful that they are upgrading their quality of teaching to address the current need.
Q: When do you think the target of achieving the 100 to 1 benchmark is achievable?
Mohammad Faiz: If we are going to increase the number of accountants, then we need to work with the academia towards raising the quality level. We still need to make accounting attractive because everyone wants to be a merchant banker. The beauty of being an accountant is, you don’t have to work in a company. You can set up your own firm and do things. I have a few of my contemporaries who are trained with me in the United Kingdom. Some of them are auditing non-governmental organisations.
Q: Are there any budget allocations or scholarships for potential students who want to pursue accounting?
Mohammad Faiz: The government has various programmes through Yayasan Peneraju Pendidikan Bumiputera. But most of the big corporates have programme for accountants. We already have a zakat authority to recognise MyPac (Malaysia Professional Accountancy Centre) as the centre to fund students. We feel that it is a profession that is not only well respected, but also pays fairly well.
We have done it with Pusat Zakat and now we are going to talk to few others to see whether they will regard us as the centre to allow zakat money to be used for funding.
Zaiton: MIA has 33,500 members. Out of that, 20,000 have professional qualifications. Bumiputeras account for eight per cent, or 1,687. Bumiputera participation is very low in taking up a professional accountancy qualification.
Q: Besides Permodalan Nasional Bhd (PNB), do you have any other source of contribution?
Mohammad Faiz: We are working on a few more. But the one that has come in a big way is PNB. We have also been talking with other government-linked companies and they are quite keen to do this because the value proposition that MyPac has. Moving forward, we want to commercialise MyPac so that it can run by itself. At the moment, we are working on seed capital provided by the government through Majlis Ekonomi Bumiputera.
Zaiton: Because of our open door policy, a lot of corporates can train and upskill their staff. MyPac can assist them to get their staff up the ladder by taking up our professional programmes.