MIA proposes increasing penalty by up to ten times

PETALING JAYA: The Malaysian Institute of Accountants (MIA) wants to increase the penalty for accountants who flout the law by up to 10 times.

Under the present Accountants Act, the law provides for a fine of up to RM5,000 including costs incurred for investigations if any party is found guilty.

MIA chief executive officer Nurmazilah Mahzan said the amount imposed at the moment was too low and proposed that the amount be increased to RM50,000.

“We are proposing an increase in fines to serve as a sound deterrent in the future. The act was drafted in 1967 and to us it is very archaic because of the maximum RM5,000 penalty,” she told StarBiz.

The MIA is a statutory body that was established under the Accountants Act 1967 (Act 94) to regulate the accountancy profession and also provide for the registration of accountants. It has the power to investigate any breach of the law, impose fines, remove, suspend or reprimand its members.

The MIA comes under the Finance Ministry (MoF) and any changes to the law will require the nod from Parliament.

“Under this Accountants Act, we will have to oversee the profession – to regulate and develop the profession. All accountants who serve the public and offer their accountancy services are subject to the Accountants Act,” Nurmazilah said.

The MIA’s executive director for surveillance and enforcement Datuk Muhammad Redzuan Abdullah said a RM5,000 maximum penalty did not make sense presently.

“Some cases don’t really impart a lesson to the members or even the public at large.”

He said that as the MIA is an agent of the MoF, it was taking the matter to the ministry.

“While it is only a RM5,000 penalty, there are other consequences such as being removed, suspended and reprimanded, which the disciplinary committee has imposed before. But the fine is a pittance at the moment. For a start, we propose increasing the fines to RM50,000 for members, but this is still subject to approval,” he added.

The MIA noted that there is presently an increase in the number of companies or firms that are not registered under the MIA.

“They are not registered but yet they offer services like auditing, accountancy and what not. And this is what we call bogus auditors and they are misleading the public. It is clear that whoever provides services such as auditing, accountancy, liquidation services, forensic accounting, taxation and others will have to be registered with the MIA. These people may not have the licence to practice from the Finance Minister,” Nurmazilah said.

The MIA is also proposing for non-members who are not registered with the body to be imposed a custodial sentence if convicted.

“It is going to be drastic. That is the only way to stop the mushrooming of non-members now. It is a very serious issue because it involves our national revenue. The moment you become bogus, you are already taking the nation’s revenue and you are undermining true accounting standards. I don’t think the MIA can compromise on this matter,” Muhammad Redzuan said.