Will the accounting body make a sharp change in direction?
THE Malaysian Institute of Accountants (MIA) has new faces at the helm. On Aug 24, the MIA Council elected Salihin Abang as president and Datuk Narendra Kumar Jasani as vice-president.
The institute’s announcement that evening was brief and bland, outlining who the two men are and their main achievements as accountants.
Of course, it’s all we can expect the MIA to say at this point, but the fact is, the voting in of Salihan and Jasani is a dramatic development that may significantly alter the fate of the body and the direction of the profession in this country. This is a turning point in the years of quiet unrest within the accounting fraternity. Here are a few questions to think about:
> Is there a change in the tone at the top?
This is the first time that the MIA’s top two posts are held by those who are on the Council because they were chosen by members, as opposed to those appointed by the Government.
Also a novelty here is that the duo are perceived as largely representing the interests of small and medium practices (SMPs), although they will no doubt point out that in their current positions, they will act on behalf of all MIA members and in the national interest.
According to the International Federation of Accountants, most of the SMPs’ clients are SMEs. In addition, the SMPs “use external sources to supplement limited in-house technical resources and they employ a limited number of professional staff”.
In Malaysia, as in most other parts of the world, the Big Four (Deloitte, PwC, EY and KPMG) are way ahead of the next group of accounting firms, which are about 10 or so international mid-tier players such as BDO, Baker Tilly, Crowe Horwath and Grant Thornton. The others are regarded as small firms.
Salihin is founder and managing partner of a network – it bears his name – of separate and independent firms. He’s also president of the Malaysian Accounting Firms Association. Jasani is the country managing partner of Grant Thornton Malaysia.
The SMPs have long complained that they don’t benefit enough from the MIA’s policies and actions. And sometimes, the interests of the Big Four and the rest of the accounting firms in Malaysia aren’t aligned, which leads to allegations that the Big Four enjoy an unfair advantage.
With Salihin and Jasani as president and vice-president, there’s a sense that things will be finally different for the SMPs.
> Why the curious conduct of the Council?
On Aug 24, Salihin ran against Datuk Abdul Rauf Rashid, EY Malaysia’s managing partner.
Abdul Rauf is seen as the continuity candidate who will ensure that the work started under the previous president, Datuk Mohammad Faiz Azmi of PwC, will carry on. It’s apparent that this was what the Government wanted as well because the Finance Ministry appointed Rauf to the Council just days earlier.
The MIA president and vice-president are elected from among the Council members by a simple majority vote. Salihin got through with 16 votes against 10 for Abdul Rauf. Salihin then nominated Jasani for the No. 2 post, which the Council accepted.
The outcome was surprising because there were several unexpected votes for Salihin. To understand that, we need to know the Council’s composition.
Council members can be divided into two categories – those elected by members in the AGMs and those who are Government appointees. These categories can be dissected further.
Of the 10 elected members, seven (including Salihin and Jasani) are from mid-tier firms or SMPs. Two are from KPMG and EY. The 10th is Ng Kean Kok, described in the MIA website as “currently involved in investment management business”.
Most of the Council’s appointed members represent regulators (the Accountant General’s Department, Bank Negara, the Securities Commission and the Companies Commission of Malaysia), the local universities, and professional accountancy bodies such as ACCA, CPA Australia and the Malaysian Institute of Certified Public Accountants.
On Aug 24, the Council meeting was attended by 16 appointed members, including Abdul Rauf.
Ordinarily, it’s reasonable to expect the appointed Council members to toe the line and vote for Abdul Rauf, the candidate nominated by the Government. Also, elected members from the Big Four usually support one of their own rather than an SMP representative.
Based on these factors, Abdul Rauf should have secured up to 18 votes. So what happened?
Of Salihin’s 16 votes, at least eight would have been from the elected Council members. Where did the remaining eight come from and why did they seemingly reject continuity?
That suggests that there’s discontent over where MIA and the profession is heading. This brings us to the implementation of the recommendations made by the Committee to Strengthen the Accountancy Profession (CSAP).
> Will the CSAP goals remain intact?
With members drawn from several regulators, the CSAP produced a report that called for a shake-up that includes carving out the MIA’s regulatory powers and passing them on to a new regulatory body. This is an uncomfortable idea for those who prefer the institute to stay as it is.
The committee also urged for a big shift in recognising who can be called a professional accountant in Malaysia. It recommends that professional accountants should only be those who “have obtained recognised professional accountancy qualifications and remained members of good standing of their professional bodies”.
Trouble by the potential devaluation of their accounting degrees, the local universities have opposed such a move all along and the resentment is felt within the MIA as well.
Faiz, the previous MIA president, is chairman of the CSAP Implementation Committee. Much of his efforts as the institute’s head was aimed at ensuring that the MIA continues to be strong and relevant after the profession’s makeover.
Because of the many different and sometimes conflicting interests among its members and other stakeholders, leading the MIA is a difficult balancing act even in the best of times. It is harder now because the CSAP objectives demand major changes.
The question is, will there be sufficient willpower to push through the initiatives?
On Thursday, the MIA issued a press release to share Salihin’s “vision for the accountancy profession in Malaysia”. He spoke about technology disruption, the MIA setting up a Digital Economy Task Force and the need for accountants to upskill themselves.
There’s no mention of the CSAP’s two high-impact recommendations and the MIA’s 3R Strategy (Repositioning, Rebranding and Recruiting) that Faiz launched.
It’s too soon, of course, to make any conclusions on how Salihin will steer the MIA. But what is clear is that his two-year term will be a tremendous test of leadership, management and acumen.
Executive editor Errol Oh believes the MIA AGM on Sept 30 will have interesting discussions.
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