ers g han c game raising bumiputera - mia.org.my · uitm established ipac on 25 ... •...

n RepoRtING by the accouNtaNts today edItoRIal team

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MyPAC is a Bumiputera affirmative action initiative spearheading professional accountancy education since 2015. The non-

profit organisation aims to churn out one thousand professionally qualified Bumi accountants annually

to increase the talent pool, raise the quality bar for the accountancy profession, and most

importantly, transform the lives of disenfranchised Bumi families.

There are very few Bumiputera professionally qualified accountants in Malaysia. MIA currently has over 33,000 members, out of whom approximately 20,000 hold diverse professional qualifications i.e. ICAEW, ACCA, CPA Australia, CAANZ, or MICPA. Out of these 20,000, only about 8% or 1,658 are Bumiputera.

It’s a gross imbalance, considering that Bumiputeras make up approximately 70% of the Malaysian population, and that MIA’s total membership includes 10,000 Bumiputeras. “On the agenda of diversity, we need to make sure that more Bumiputeras have professional qualifications,” exhorted Dr. Nurmazilah Dato’ Mahzan, CEO, MIA. This in turn will directly raise the calibre of accountancy in the country, and help address

raisinG bumiPutera

representAtion in the AccountAncy proFession

30 accountants today | May / june 2017

RAISING buMIputeRA RepReSeNtAtION IN tHe AccOuNtANcy pROFeSSION

the perpetual shortage of high-quality professional accountants.

To create more Bumiputera Professional Accountants (BPA) who are globally competitive and competent, MIA made a recommendation to the Bumiputera Economic Council in August 2014, and subsequently, the Malaysia Professional Accountancy Centre (MyPAC) - a not-for-profit organisation was formed in January 2015.

MyPAC aims to double the current number of Bumiputera professional accountants registered with MIA. To do this, MyPAC collaborates with several stakeholders – including sponsors, companies and training service providers – and leverages their strengths to promote accountancy education and accelerate the development of BPAs.

MyPAC is the catalyst to produce more high-quality professionally qualified accountants to meet escalating expectations, said MyPAC CEO and MIA Vice-President Datuk Zaiton Mohd Hassan. One, recommendations from the Committee to Strengthen the Accountancy Profession (CSAP) include making amendments to the Accountancy Act to include a Competency Framework. The changes

of a professional body.A core MyPAC partner is Yayasan

Peneraju Pendidikan Bumiputera (Yayasan Peneraju), an agency under the Prime Minister’s Department tasked with strengthening the capacity building of the Bumiputeras through academic and vocational education. MyPAC currently helps with Yayasan Peneraju’s four Professional Accountancy Programmes, which falls under the Peneraju Profesional thrust. According to Yayasan Peneraju’s Chief Executive YM Raja Azura Mahayuddin, since 2015, Yayasan Peneraju has made a commitment to groom a minimum of 1,000 Bumiputeras to become professional accountants every year. There are also other institutions which are driving this agenda, such as UiTM, and Permodalan Nasional Berhad (PNB) has recently launched its own initiative to produce more Bumi qualified accountants in collaboration with Yayasan Peneraju and INTEC Education College (INTEC), explained Raja Azura.

the ChallenGes

Raja Azura admits that certain issues stand in the way of creating

myPaC is the Catalyst to ProduCe more hiGh-quality

Professionally qualified

aCCountants to meet esCalatinG

exPeCtations.

Datuk Zaiton Mohd HassanMyPAC CEO and MIA Vice-President

will require accountants who want to take on certain roles, such as CFO, Audit Committee Chairman or Audit Committee Board member to be professionally qualified. Two, the business environment and profession is becoming ever more complex as new developments and regulations arise, such as the introduction of new MFRSs and Key Audit Matters (KAMs). Professional qualifications mandate that their members log a minimum number of continuing professional development (CPD) hours annually to stay relevant. Hence, it makes sense to become professionally qualified and a member

May / june 2017 | accountants today 31


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more Bumi professional accountants. Yayasan Peneraju’s focus group sessions with a few local universities back in 2012 revealed the perspective that pursuing professional qualifications is tough and somehow not highly encouraged. Accounting graduates from local universities only need to accumulate three years of relevant experience, in order to qualify as MIA Chartered Accountants (CA) under the Accountants Act. “We should recognise that this alternative pathway is put through with relevant improvements and amendments made to the local universities’ syllabus and as this alternative pathway exists, global professional exams such as ICAEW and ACCA are not the high priority pathway for local graduates.”

PartnerinG With inteC

One key partner for MyPAC and Yayasan Peneraju is INTEC. Under INTEC, the International Professional Accountancy Center (IPAC) set up in 2015 offers different pathways to achieving professional accountancy qualifications. As its name denotes,

ACCA affiliates and more are expected to graduate in 2017. A key MyPAC innovation is to convert ACCA “last milers”, such as those who have passed 12 out of the 14 ACCA papers and amazingly, simply quit. These last milers can qualify as full-fledged ACCA members upon passing the last one or two papers since they already have the requisite working experience, said Datuk Zaiton. The 57 also includes local graduates, who took five papers post-degree full-time in IPAC.

While MyPAC does offer part-time routes for graduates who are already working, both Datuk Zaiton and Raja Azura strongly encourage candidates to study for the exams on a full-time basis. In the context of IPAC, ACCA passing rates for full-timers are higher at 74%, versus 47% for working part-timers whose focus and concentration may be diluted and who may not enjoy as much support from employers. CAT which is offered as a full-time programme clocks a 98% passing rate.

iPaC on steroids – a trailblazinG suCCess

UiTM established IPAC on 25 March 2015 as a private entity under UiTM Holdings. In just a short time, IPAC has achieved tremendous passing rates which are up to 46% above the global ACCA passing rate of about 40%, produced several ACCA world-class prize winners, and attained gold status as an ACCA learning partner, and it is targeting platinum status by the end of 2017.

How has IPAC achieved this feat? One, IPAC offers world-class training locally at a fraction of the cost of overseas professional education. MyPAC brought in the venerable BPP

IPAC focuses strictly on professional global exams.

Currently, 1,300 candidates are enrolled in IPAC, and many will emerge as professional accountants in future to meet MyPAC’s commitment to produce 1,000 BPAs annually. Right now, these students are doing the ACCA examinations in various stages. In future, this will be broadened to include other international professional qualifications. IPAC is only the second centre in the country after Sunway to offer the ICAEW Certificate in Finance, Accounting and Business (ICAEW CFAB).

Datuk Zaiton who is an ACCA Council Member and director of several PLCs including Sime Darby Berhad explained that ACCA offers open access

and many flexible pathways for SPM school leavers as well as degree holders to eventually qualify as ACCA affiliates - those who have passed the exams but not logged the requisite three years’ working experience in relevant fields. Local university graduates would take five papers, with exemptions on nine papers, to qualify as ACCA affiliates.

To date, MyPAC has produced 57


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University of UK to train local lecturers on how to teach in a very structured and modular style which boosts the passing rate phenomenally.

Two, MyPAC addresses the prevailing weaknesses handicapping Bumiputera students, such as deficiencies in English and negative attitudes towards professional exams, and strives to create a facilitative

environment which supports high passing rates. MyPAC, Yayasan Peneraju and IPAC go to the grassroots to meet and counsel students, create awareness of their programmes and available aid, and demolish the perception that the exams are too difficult. They market the value and prospects of professional qualifications and inspire students to aim high. Raja Azura notes that it is

important to prepare candidates up to a level where they are able to answer UK-based exams in professional business English. “The exams are difficult but not impossible,” said Datuk Zaiton.

Three, by providing generous financial aid to cover the expensive costs of professional accountancy programmes. Candidates from

PROGRAMMETITLE

PROGRAMMEACRONYM

APPLICATION REQUIREMENTS PROFESSIONAL QUALIFICATION

DURATION MODE OF STUDY

AGE ACADEMIC QUALIFICATION

Peneraju Profesional Akauntan Muda (Kategori A)

ppAM A 19 years old & below

• SpM / O level: Minimum 5A’s including Mathematics & english

• cAt• AccA• Degree in Appiled

Accounting from Oxford brookes university (Obu)

4 years Full-time

Peneraju Profesional Akauntan Muda (Kategori B)

ppAM b 22 years old & below

• Certified Accounting Technician (CAT) with minimum average passing mark of 65% OR

• Diploma in Accounting with a minimum cGpA of 3.00

• AccA• Degree in Appiled

Accounting from Oxford brookes university (Obu)

3 years Full-time

Peneraju Profesional Akauntan Siswazah

ppAS 25 years old & below

• bachelor’s Degree in Accounting with a minimum cGpA of 3.00 (Accredited with full exemption by AccA)

• AccA 2 years Full-time

Peneraju ProfesionalPensijilanPerakaunan

pppp 40 years old & below

• permanent employment • bachelor’s Degree in Accounting, with

minimum of 7 papers exemption by AccA and minimum cGpA of 2.80

• AccA 4 years Max

part-time

YAYASAn PeneRAju PROgRAMMeS

PROGRAMMETITLE

PROGRAMMEACRONYM

APPLICATION REQUIREMENTS PROFESSIONAL QUALIFICATION

DURATION MODE OF STUDY

AGE ACADEMIC QUALIFICATION

MyPAC

AccA last Milers

19 to 49 years old

• permanent employment• Open to those who are left with a maximum

of 3 papers of AccA

AccA 6 Months to 1 1/2 years

part-time

cFAb - IcAeW 19 years old & below

• SpM: Minimum 9A’s including Mathematics & english

cFAb - IcAeW 18 years Full-time

MIcpA - cAANZ

25 years old & below

• bachelor’s Degree in Accounting from Accredited universities

• Minimum cGpA OF 3.00

MIcpA - cAANZ

2 years combination of Full-time and part-time

AccA Accelerate

25 years old • bachelor’s Degree in Accounting (Accelerate)• Minimum cGpA OF 3.00 (Accredited with full

exemption by AccA)• completed at least 1 AccA paper

AccA 2 years Full-time

MyPAC PROgRAMMeS


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Crowe Horwath- MIA MagAd2017-275x210mm-FA-OL.pdf 1 11/04/2017 4:11 PM

households with income of less than RM10,000 per month are fully funded, while those from more affluent households earning between RM10,000 – RM20,000 monthly get tuition and accommodation (Yayasan Peneraju is in discussions with education institutions, in this case, IPAC to co-sponsor by covering the cost for accommodation), but not meal allowances and pocket money. To incentivise them to work hard and discourage slacking off, candidates who fail to pass all papers within a stipulated time period must pay back 20% of the funding provided.

Finally, MyPAC, Yayasan Peneraju and IPAC are not just focused on getting candidates to pass exams, but to nurture wholesome well-rounded and productive individuals who can contribute to society and the nation. Thus, interventionist measures are taken to improve communication skills especially English and to change mindsets, build tenacity, character and spiritual strength, and encourage positive attitudes among other qualities, while ensuring technical excellence. “When they come out as a Yayasan Peneraju/MyPAC product, we want to be proud of them,” said Datuk Zaiton.

ChanGinG lives by meetinG market demand

Although MyPAC welcomes applications from all walks of life including middle income and upper middle income households, priority

is given to the disadvantaged, the children of cab drivers, cleaners, security guards and the rural and urban poor. Candidates are rigorously screened; tests assess aptitude, English and math skills and candidates must pass English interviews. “But English should not be a barrier,” stresses Datuk Zaiton, who always tells the story of a girl who is the sixth of 11 children and whose father is a security guard. She passed the written English test but not the interview. MyPAC sourced zakat funds to provide English lessons and other interventions; today, she will soon qualify as a CAT and is proceeding towards her ACCA exams. “If this girl becomes a professional accountant, she’s going to be the game changer for her family!” enthused Datuk Zaiton.

It looks like IPAC will produce many such game changers. Success stories abound from IPAC’s first batch of 117 CAT graduates in October 2016; they sat the June 2016 CAT exams and achieved 100% passes, a whopping 28% above world passing rates. Syarah Syahirah Sugianto scored 100% in Maintaining Financial Records, the first person in Malaysia and in the world to obtain a perfect score for the paper. Syarah also scored highest in the world for Accounting in Business. Nabila Syuhada Mohd Kamal Azmy scored 96% for Recording Financial Transactions and 98% in Management Information. Mohammed Shafiq Mohammed Yunus scored 96% for Maintaining Cost and Finance, the highest in the world as well. For

ACCA, Nur Fathin Amirrah Mohd Nor ranked first in Malaysia and third in the world for F5 paper (Performance Management) in the December 2016 examination.

The beauty of MyPAC and IPAC is that they are not just creating financial inclusion and catalysts for change among the Bumiputera community, but that other communities are rallying in support in the esprit of Malaysian solidarity. “There is nothing racial or biased about this. The non-Bumis have been very supportive because at the end of the day, everybody needs professional accountants,” said Datuk Zaiton.

oyster, meet World

Prospects aren’t limited to the profession either, since many professional accountants have risen to high positions in business and government, such as former Cabinet Minister Tan Sri Abdul Wahid Omar who is now chairman of Permodalan Nasional Berhad (PNB) and Tan Sri Mohd Bakke Salleh, President of Sime Darby Berhad. Certainly, professional accountants face no unemployment worries, said Datuk Zaiton. She noted that IPAC graduates are being snapped up eagerly by employers such as the Big 5 (PwC, EY, KPMG, Deloitte and BDO) and there is a growing waiting list. “It’s like they’re waiting by the oven for cookies to bake and grabbing them when they’re hot from the oven!” n


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MyPAC Chief Executive Officer Datuk Zaiton Mohd Hassan, Yayasan Peneraju Pendidikan Bumiputera Chief Executive YM Raja Azura Mahayuddin and MIA Chief Executive Officer Dr. Nurmazilah Dato’ Mahzan were speaking at a press conference with selected members of the media to create awareness of MyPAC, Peneraju and IPAC, and attract more applicants from disadvantaged backgrounds.


n by abdul Razak RahmaN

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IT is long overdue. After 14 years and 12 consultation documents, the new Companies Act 2016 was finally implemented effective on 31 January 2017. “The old Act was amended more than 30 times during its lifetime of 50 years. It was time to have a new Act. The new Act has reformed almost all aspects of company law in Malaysia,” remarked Dr. Chan Wai Meng, Associate Professor, Faculty of Business and Accounting, University Malaya, at MIA’s annual Audit Committee Conference 2017.

To get accountants up to speed, the Conference’s session on the new Act focused on three pivotal areas: governance issues; usage of the credit in the share premium account; and the decoupling of the annual return and financial statements.

GovernanCe

What are the key changes under the new Companies Act relating to governance issues?

CoNStitutioNS - The new Act provides that companies incorporated under the Act are not required to have a constitution, unless the companies are limited by guarantee. “However, from my reading of the Act, companies with share capital might find it necessary to have a constitution to modify the pre-emptive rights under Section 85,” said Dr. Chan.

Section 85 provides that subject to the constitution, a company issuing shares which rank equal to existing shares shall first offer those new shares to the holders of the existing shares. Further, a company intending to issue preference shares must also make provisions in its constitution (Section 90). Similarly, a private company may be required to state the restrictions on the transfer of shares in its constitution (Section 106).

SeCtioN 21 aND the oBJeCtS ClauSe - Another area which requires comprehension is Section 21 which gives

unlimited capacity to companies, pointed out Dr. Chan. But is this restricted by the registered nature of business, bearing in mind that a company has to state its nature of business in its application for incorporation and annual return?

Further, Section 35(2) provides that if the company has a constitution and has set out its objects clause in the constitution, it shall be restricted from carrying on any business that is not within those objects. From Section 39, the doctrine of constructive notice (i.e. a person shall be deemed to have notice or knowledge of the contents of the documents registered with the ROC) does not apply anymore except in relation to charges. “What are the risks if a company were to conduct a business outside its objects clause? We no longer have Section 20 of the CA 1965 to fall

What are your obligations under the new Companies Act 2016?

Companies act 2016underSTand yOur ObliGaTiOnS


cOMpANIeS Act 2016 – uNDeRStAND yOuR OblIGAtIONS

Act. Public-listed companies for example are allowed to distribute their annual reports in electronic form, provided that the mode of communication is stated in the constitution and approved by the shareholders,” commented Samantha.

SolVeNCy teStS - The new Act also introduces solvency tests for the redemption of preference shares, reduction of share capital, financial assistance, share buyback as well as payment of dividends. “The underlying principle behind the solvency tests is to ensure that the directors take responsibility in safeguarding the interest of the creditors,” said Brian Wong, Partner, PKF Malaysia.

Solvency tests and solvency statements are both applicable to all capital related transactions prescribed by the new Act except for payment of dividends where only a solvency test is required. There are two categories of solvency test, Cash flow and Balance Sheet. For the Cash flow solvency test, the company must be able to meet its debt obligations for the next 12 months from the date of the transaction, but for the next six months in the case of share buybacks. For the Balance Sheet solvency test, the company’s assets must be higher than its liabilities at the date of the transaction, and higher than the aggregate amount of all shares after buyback in the case of share buybacks. Brian added that the realisable value of the assets under the Balance Sheet solvency test can be based on the carrying values in the last set of financial statements prepared based on approved accounting standards, and liabilities must also include contingent liabilities.

In relation to dividends, in addition to meeting the Cash flow solvency test, dividends can only be distributed out of available profits. Whilst there are

back on,” explained Dr. Chan.“Despite the provision of Section

21 which confers unlimited capacity, companies with objects clause in its constitution may run the risk of conducting a business outside its objects clause if the constitution is not thoroughly reviewed and amended. Companies with objects clause have to be careful, both for internal procedures as well as when dealing with counter-parties. The exclusion of Section 20 of Companies Act 1965, from the new Act, removes the protection that preserves the validity of the transactions with counterparties,” explained Lee Shih of SKRINE.

“Most companies, especially those which require strong governance do not remove the objects clause but review and seek amendments to the clause to provide flexibility,” added Samantha Tai Yit Chin, CEO, Boardroom Corporate Services (KL) Sdn Bhd.

MeMoRaNDuM aND aRtiCleS of aSSoCiatioN - “For companies incorporated under the old Companies Act, it is advisable to review and revise their Memorandum and Articles of Association to ensure compliance to the new Companies Act as well as to take

advantage of the benefits introduced under the new Companies Act,” advised Lee.

He added that from the public- listed companies’ perspective, Bursa Malaysia has been issuing directives to incorporate the changes under the new Companies Act. Furthermore, under the Listing Requirement, public- listed companies must continue to retain a constitution and therefore it is necessary to review their Memorandum or Articles of Association or adopt a new constitution.

Another type of company that should review their Memorandum and Articles of Association are companies with shareholders or joint-venture agreements. These companies have to ensure that all the specific provisions in their unique agreements are clearly reflected in their constitution, otherwise the default provisions under the new Companies Act will prevail.

“For Audit Committee and Board members, it is important that they are adequately briefed on the changes in the new Companies Act to enable them to understand the gap between the existing constitution or the Memorandum and Articles of Association, and the requirements under the new Companies

Left to right: Brian Wong, Yap Weng Seong, Samantha Tai Yit Chin, Dr. Chan Wai Meng and Lee Shih.

May / june 2017 | accountants today 39

cOMpANIeS Act 2016 – uNDeRStAND yOuR OblIGAtIONS

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such as the removal of the requirement for Annual General Meeting for private companies will facilitate the growth of new businesses.

deCouPlinG of annual return and finanCial statements

The Companies Act 2016 has decoupled the Annual Return and the financial statements. The Annual Return, signed by a director or secretary, shall be lodged with the ROC within 30 days from its anniversary date of incorporation (Section 68), whereas the lodgement of the audited financial statements is referenced to the company’s financial year end (Section 259).

“It appears that the director or secretary will have to prepare and sign off the Annual Return, which includes a statement on the company’s indebtedness, without the benefit of referring to the company’s audited accounts,” said Dr. Chan.

Dr. Chan added that in the Directors’ Report attached to the audited financial statements, the directors have the discretion to include a section on the business review of the company. The business review is to provide an understanding of the development and performance or position of the company’s business (Section 253(3) and Part II of the Fifth Schedule).

“From SSM’s perspective, the decoupling of the Annual Return and the Financial Statements will ensure timely submission of the Annual Return and compliance to SSM’s requirements. In the past, the submission of Annual Return was held back because the Financial Statements were not ready,” remarked Weng Seong. n

views that these profits may relate to only current period profits, it is prudent to consider prior year losses in the determination of available profits and for such profits to be realised.

Although certain solvency statements are required to be signed by a majority and not all of the directors, the entire Board would be liable if the company is found to be insolvent later on. Penalties for non-compliance are not only restricted to the directors but also apply to the officers of the company, said Brian.

ShaReholDeRS’ ReMeDieS - Another governance issue relates to shareholders’ remedies under Section 195, whereby the chairperson of the members’ meeting shall allow reasonable opportunity for members to question, discuss, comment and make recommendation on the management of the company. This section also provides for members to pass a resolution to make recommendations to the Board on matters affecting the management of the company.

offiCeRS iNDeMNity - Under Section 289 of the new Act, a company may also indemnify an officer or auditor of the company and with the Board’s approval, may effect insurance for an officer or auditor of the company.

share Premium aCCount & CaPital redemPtion reserves

With the introduction of the no par or nominal value for shares under Section 74 of the new Companies Act, any amount standing to the credit of a company’s Share Premium Account and Capital Redemption Reserves

shall become part of the company’s Share Capital. Section 618(3) also stipulates that a company has 24 months from the commencement of Section 74 to utilise the credits in the Share Premium Account and Capital Redemption Reserves for the purposes mentioned under Section 618(3). Suruhanjaya Syarikat Malaysia (‘SSM’) has issued Practice Note 1/2017 on 8 February 2017 to provide clarification on the utilisation of the credits in the Share Premium Account and Capital Redemption Reserves.

“The new Companies Act 2016 is beneficial to the business community and very timely that it is introduced in one go. The removal of authorised share capital for example, reduces the costs of incorporating a business, hence making it simpler to start businesses in Malaysia,” remarked Yap Weng Seong, Unit Head of Regulatory Development & Services Division, SSM. He then added that under the new Act, amendments to the regulatory matters

The new Companies Act 2016 is beneficial to the business community and very timely that it is introduced in one go. The removal of authorised share capital for example, reduces the costs of incorporating a business, hence making it simpler to start businesses in Malaysia.

Yap Weng SeongUnit Head of Regulatory Development & Services Division, SSM


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