Singapore wants to lead the region in accountancy

Optimistically Cautious by ERROL OH

MANY of us tend to get irritated when we're compared to Singapore. So be warned, this article may annoy you. However, it's good to appreciate that we sometimes need to be needled into action. This is probably such a case.

It's about accountancy. At a hotel in Petaling Jaya on Thursday, there will be the signing of a memorandum of understanding (MoU) for an initiative that will involve professional bodies, educational institutions, accounting firms and Talent Corp Malaysia Bhd (TalentCorp).

According to an invitation sent out to journalists on behalf of the Institute of Chartered Accountants in England and Wales (ICAEW), this initiative is called the ICAEW Regional Centre of Accountancy Training Excellence.

It's described as a collaboration between TalentCorp, ICAEW senior members and Sunway-TES, a subsidiary of the Sunway Education Group that delivers professional accounting programmes.

This will start with a pilot programme in which students from Asean countries and China will “undergo the rigorous ACA qualification, administered by ICAEW and taught by Sunway-TES”.

The pioneer batch will be drawn from Sunway University, Taylor's University and Nottingham University, and they will receive the required training at firms in Malaysia such as BDO, Ernst & Young and PwC.

Says the media invitation: “The centre will deliver the highest standards of ICAEW training and development, and contribute to the development of skilled talent to support Malaysia's drive for economic transformation.”

It's understood that the ICAEW Regional Centre of Accountancy Training Excellence is just one component of a larger effort to bring more people into Malaysia to study accountancy and to later serve in the accounting sector here. Other accountancy bodies, firms and schools are expected to be part of similar initiatives that will kick off soon as well.

Building a pipeline

Why is this important? The invitation provides an answer: “A robust pipeline of highly skilled professionals is a key ingredient to sustain Malaysia's economic development and support the nation's aim to achieve high-income status by 2020.”

The references to economic transformation and the high-income status target by 2020 suggest that these initiatives are linked to the Economic Transformation Programme (ETP). And indeed they are.

Business services make up one of the ETP's 12 National Key Economic Areas, and within that, the accountancy sector has been identified as a business opportunity.

The ETP roadmap, launched in October 2010, points out that the sector's growth traditionally rides on the size of the economy, with demand hinging upon domestic reporting requirements and tax regulations.

However, deregulation and the global convergence of financial reporting standards are paving the way for the export of accountancy services.

“To be able to capitalise on those opportunities, Malaysia must increase the quality of its accountants and develop specialised skill sets in areas such as international taxation, forensic accounting and carbon accounting, in line with future growth areas,” says the roadmap.

The ETP incorporates two relevant proposals. The first is to only allow those with recognised professional qualifications to be admitted as chartered accountants in Malaysia. This is to improve the quality of Malaysia's chartered accountants.

“The chartered accountant qualification is currently awarded automatically to Malaysian graduates after three years of experience within the industry. The Malaysian Institute of Accountants (MIA) will introduce the additional requirement to hold a professional qualification to qualify as a chartered accountant by mid-2012,” adds the roadmap.

The second proposal talks about developing Malaysian expertise in specialised areas of accountancy so as to seize export opportunities. The idea is to do so via education and policies on granting visas,

The ETP roadmap recommends that the Higher Education Ministry launches new Masters programmes at local universities in these areas and that the Home Affairs Ministry eases restrictions on the entry of foreigners with specialised skills.

Singapore's vision

On the other hand, Singapore seems to have had a headstart in expanding the economic role of its accountancy sector. With the objective of positioning the island state as “a leading international centre for accountancy services and professionals”, the Government set up the Committee to Develop the Singapore Accountancy Sector (CDAS) in December 2008.

Six months before the release of the ETP roadmap, the committee had issued its 82-page final report on how to transform Singapore into a leading global accountancy hub for the Asia Pacific region by 2020.

Here are excerpts from the report's vision for the Singapore accountancy sector:

“A globally recognised professional accountancy qualification is key to the successful transformation of the Singapore accountancy sector. Singapore will be the place of choice for students in the region wanting to become a qualified accountant.”

“Accountancy graduates from Singapore's three universities will enhance their accountancy careers through this professional qualification. The talent pool of accountants in Singapore will be broadened and strengthened as non-accountancy degree graduates are also attracted to the sector with the opportunity to pursue the professional qualification.”

“Singapore will be the regional centre offering other accountancy qualifications by international professional bodies.”

“Accountants from the region will come to Singapore for their professional development and certification as chief financial officers and internal auditors, and to acquire specialised skills in risk management, tax and valuation.”

It's somewhat different from the ETP objective of exporting accountancy services, but it's clear that both Malaysia and Singapore intend to attract accountancy students from abroad. Who has the edge? What's our game plan?

It looks like Singapore already has an overall strategy to work on. Based on the CDAS' recommendations, the Pro-Tem Singapore Accountancy Council was formed to spearhead the development of the Singapore accountancy sector. Next month, it will become a statutory body called the Singapore Accountancy Commission.

Meanwhile, Malaysia pins its hopes largely on the MIA, which is both a regulator and a professional body. There is yet any move to make it mandatory for chartered accountants to have professional qualifications.

Neither was this directly addressed in the institute's annual report 2012, although in his message, MIA president Datuk Mohamed Nasir Ahmadwrote: “Since the country is being helmed by a reform-minded leadership bent on achieving the goals of the ETP, we must seize this window of opportunity to lobby for reforms in the accounting legislative framework.”

It's encouraging that TalentCorp has teamed up with professional bodies, accounting firms and universities to boost human capital in Malaysia's accountancy sector, but this is surely not enough.

Accountancy is essential, broad-ranging, ever evolving and technically demanding. Piecemeal adjustments and improvements are necessary sometimes, but these can't elevate the sector to the next level. There has to be a holistic and co-ordinated approach in order to achieve something like that.

MIA, of course, has to take a lead in such an effort. But what about the Accountant General's Department? The MIA comes under the Finance Ministry, which is represented by the department in the governance of the institute.

Malaysia's accountancy sector deserves a solid game plan, and the right people should step up to take ownership of such a project and to ensure its proper execution. Otherwise, losing our competitiveness in accountancy will be yet another reason to be irritated with the neighbour across the Causeway.

l Executive editor Errol Oh is waiting for a marketing and branding genius to turn accountancy into an ultra-cool profession.