THE complaint avenue has been a provision in the MIA Disciplinary Rules 2002. Hence, MIA with the objective that the complaint mechanism is exercised rightfully by the public at large as well as to assist members who have been served with the Notice of Complaint (NoC), established the REGISTRAR OFFICE to oversee the due processes involved. This enables MIA to significantly participate in performing its role in regulating the practice of the profession of accountancy in Malaysia. In view of the duties and obligations played by the accountancy profession in our society, the Malaysian Institute of Accountants through Section 10 of the Accountants Act empowers the Council to make By-Laws. These By-Laws are designed inter-alia for the inculcation of sound practice of the accountancy profession, prevention of illegal and dishonourable practices and the promotion of the interest of the profession. With the objective that our members shall exhibit the highest standard of ethics, professionalism and professional conduct that are expected of the profession, MIA shall not preclude any person from lodging a complaint against members arising from any offences or breaches committed in contravention of the MIA By-Laws. Over the years, the Institute has been dealing with a wide range of complainants from all walks of life, be it members of the public, our own members, internal departments of MIA or regulators. The very many complaints that have landed on the desk of the Registrar include amongst others auditors rendering unqualified reports despite discrepancies in financial statements, non-reply to correspondences, breach of confidentiality, breach of practice review and quality assurance, a various range of company secretarial matters, specific cases on liquidation, failure to seek professional clearance, non-compliance of the accounting and auditing standards and various matters confined to breaches of the MIA By-Laws. The Registrar Office also does receive a significant number of enquiries on lodgement of complaints UNDERSTANDING THE SCOPE OF COMPLAINTS THAT CAN BE LODGED WITH MIA’S REGISTRAR’S OFFICE, TO ENABLE THE PUBLIC AND COMPLAINANTS TO EXERCISE THEIR RIGHTS AND TO SUPPORT MEMBERS SERVED WITH COMPLAINT NOTICES. PUBLIC INTEREST Protecting Q BY MIA COMPLAINTS UNIT ACCOUNTABILITY 50 ACCOUNTANTS TODAY | MAY / JUNE 2018
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accountants today June2018 · Dr. Nurmazilah served as session moderator, with panellists Rashidah Hussen, Director, Integrity Division, IRBM, and Eulis Rachmatiah Iskandar, Head
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THE complaint avenue has been a
provision in the MIA Disciplinary Rules
2002. Hence, MIA with the objective that
the complaint mechanism is exercised
rightfully by the public at large as well
as to assist members who have been
served with the Notice of Complaint
(NoC), established the REGISTRAR
OFFICE to oversee the due processes
involved. This enables MIA to
significantly participate in performing
its role in regulating the practice of the
profession of accountancy in Malaysia.
In view of the duties and obligations
played by the accountancy profession
in our society, the Malaysian Institute
of Accountants through Section 10
of the Accountants Act empowers
the Council to make By-Laws. These
By-Laws are designed inter-alia for the
inculcation of sound practice of the
accountancy profession, prevention of
illegal and dishonourable practices and
the promotion of the interest of the
profession.
With the objective that our members
shall exhibit the highest standard of
ethics, professionalism and professional
conduct that are expected of the
profession, MIA shall not preclude any
person from lodging a complaint against
members arising from any offences or
breaches committed in contravention of
the MIA By-Laws.
Over the years, the Institute has
been dealing with a wide range of
complainants from all walks of life,
be it members of the public, our own
members, internal departments of MIA
or regulators.
The very many complaints that have
landed on the desk of the Registrar
include amongst others auditors
rendering unqualified reports despite
discrepancies in financial statements,
non-reply to correspondences, breach of
confidentiality, breach of practice review
and quality assurance, a various range
of company secretarial matters, specific
cases on liquidation, failure to seek
professional clearance, non-compliance
of the accounting and auditing
standards and various matters confined
to breaches of the MIA By-Laws.
The Registrar Office also does
receive a significant number of
enquiries on lodgement of complaints
UNDERSTANDING THE SCOPE OF COMPLAINTS THAT CAN BE
LODGED WITH MIA’S REGISTRAR’S OFFICE, TO ENABLE THE
PUBLIC AND COMPLAINANTS TO EXERCISE THEIR RIGHTS AND
TO SUPPORT MEMBERS SERVED WITH COMPLAINT NOTICES.
PUBLIC INTERESTProtecting
BY MIA COMPLAINTS UNIT
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against tax agents. The span of issues
raised includes timeliness, compilation
and tax engagements. Most of the
complainants’ grievances relate to
unexpected tax penalties. Many of
these complaints remain an enquiry
since the complainants do not have the
necessary documentation in support of
their allegations.
There are also a significant number
of complaints that the Institute has
deliberately declined to accept. The
common levelled matters which are not
in the purview of the Institute include
family matters, partnership dispute,
fees, criminal offences, ongoing
litigation proceedings, fraud and forgery,
commercial crime, employer-employee
dispute, monetary compensation, issues
on court-appointed liquidators where
the issues have yet to be established at
the court, and other irrelevant matters.
Having said that, observing Section
150.1 on Professional Behaviour of
the MIA By-Laws which reads that
the “professional behaviour imposes
an obligation on all professional
accountants to comply with relevant
laws and regulation to avoid any conduct
that the professional accountant
knows or should know may discredit
the profession”, cases that has been
referred by regulators and relevant
To any member, the whole
investigation processes may be a
stressful event until the completion of
the case.
Considering the impact, members
are therefore advised to exercise due
diligence in discharging their duties
in every situation. As a member of the
Institute, mastering the MIA By-Laws
on Professional Ethics, Conduct and
Practice will be useful tool for an
avoidance of unnecessary complaint
that renders in “please explain to the
Investigation Committee”.
Understanding the significant
role owed to the society at large, the
most convenient guidance that can be
obtained by a member is through the
various programmes conducted by the
Institute to upgrade members’ skill
and knowledge. An idea to attend the
Public Practitioners Programme (PPP)
by the Institute from time to time will
be the most simplified version of a
practitioner’s life.
authorities has also been subjected to
the complaint mechanism and the due
processes of the Institute.
The number of complaints stood at
13 cases received from January to April
2018.
All the cases which satisfy the
requirement of Rule 4 of the MIA
Disciplinary Rule (No.2) 2002 results in
an issuance of the Notice of Complaint
to our members. Members are given
the opportunity to render an explanation
via writing or verbal submission to the
Investigation Committee.
Chronologically, from the Registrar,
the case will flow to the Investigation Unit
for proceedings before the Investigation
Committee (IC). Should there be
sufficient evidence, the case will be
referred to the Disciplinary Committee
(DC) for disciplinary proceeding. In
any event, an appeal avenue via the
Disciplinary Appeal Board (DAB) is
made available for members who appeal
on the decision imposed by the DC.
Year 2015 2016 2017
Number of complaints
received by the Registrar Office112 67 54
COMPLAINTS LODGED FROM 2015 TO 2017
*Number of complaints shown above is based on calendar year
COMPLAINT PROCESSES
Complainant
lodge
complaint with
the Registrar
1
If complaint fulfils
requirement of Rule
4 of the MIA
Disciplinary Rules
2002, Registrar
issues Notice of
Complaint (NoC) to
Member
2
Upon receipt of the
explanation from
member/in the
absence of the
reply, complaint will
be transferred to the
Investigation Unit
3
Investigation
Committee (IC)
process
4
Disciplinary
Committee (DC)
process
5
Disciplinary
Appeal Board
(DAB) process
6
PROTECTING PUBLIC INTEREST
MAY / JUNE 2018 | ACCOUNTANTS TODAY 51
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HOW TO BE GOOD
The following are some key
takeaways from the discussion:
ACCOUNTANTS ARE IMPORTANT
GATEKEEPERS OF INTEGRITY
Fostering the strength of the
accounting and finance function
in an organisation can be critical to
protecting governance and integrity,
because accountants are recognised
for their roles as gatekeepers. The
International Federation of Accountants
(IFAC) advocates for the accountancy
profession’s pivotal role in countering
corruption, and this is supported by IFAC’s
most recent issuances developed from
documents at the G-20 Leaders’ Summit
2016. “The world is seeking stronger
governance through higher levels of trust
and integrity in the business and public
sectors, and stronger, more consistent
collaboration in the global regulatory
environment, and accountants are party
to this by virtue of their roles in the global
compliance and economic ecosystems,”
emphasised Dr. Nurmazilah.
Assurance from the accountancy
profession could also be a tool to counter
the negative perceptions of Malaysia in
the Corporate Governance Watch Index.
Low scores in the categories of politics
and regulation are indications of declining
public trust that need to be swiftly
addressed. “Fortunately, auditing and
accounting appear to be our strengths,”
said Dr. Nurmazilah, and these assets help
How can we foster stronger governance in organisations, and in
turn improve perceived and actual integrity and trust? How can
organisations help their employees to always do the right thing and make
the right decision to support integrity and good reputation?
INTEGRITY is doing the right thing
even when no one is watching. BUT
how many can resist the temptation of
sneaking through a red light at 3:00am,
when there’s obviously no oncoming
traffic?” asked Dr. Nurmazilah Dato’
Mahzan, CEO, MIA, in her preamble
to the panel discussion on Stronger
Governance for Integrity and Trust
in Organisations at the recent MIA
Trust & Integrity Conference 2018.
Dr. Nurmazilah served as session
moderator, with panellists Rashidah
Hussen, Director, Integrity Division,
IRBM, and Eulis Rachmatiah Iskandar,
Head of Ethics, Celcom Axiata Berhad
providing public and private sector
perspectives.
52 ACCOUNTANTS TODAY | MAY / JUNE 2018
HOW TO BE GOOD
to succour a positive climate of assurance
and trust.
GOVERNANCE AND ENFORCEMENT
ARE PIVOTAL
Institutional governance, regulation
and enforcement can impose the
necessary rules and standards that
support integrity and trust, thereby
having a direct impact on society, noted
Rashidah. Compliance with regulations
such as Sarbanes-Oxley and the Frank-
Dodd Act have not just helped the
private sector to avoid punitive fines and
penalties, said Eulis, but is a differentiating
factor that can help companies secure
the best talent from around the world.
EVERYBODY HAS A ROLE TO PLAY
Personal responsibility, conscience
and morals differentiate those with
integrity. “We have to behave and have
higher standards than the market around
us. It is up to everyone to do the right
thing,” advised Eulis. “All levels need to
understand their respective roles and
modify (their behaviour) to suit their
objectives,” concurred Rashidah. “Everyone
is a leader in their own environment.”
At the same time, tone from the top
is imperative. It is the Board of Directors’
responsibility to ensure that the right
approach is cascaded down to other
levels of the organisation, said Rashidah.
What happens when the tone at the
top is not what it should be? There will
be consequences: you will lose people.
“People won’t want to work with you,”
Eulis said, adding that employees today
were doing due diligence on their
employers before taking up job offers.
ENSURE ALL SYSTEMS GO,
BACKED BY THE RIGHT CULTURE
A conducive environment for
trust and integrity can be nurtured
by putting in the appropriate policies,
communications, training, risk
assessment, internal controls, and the
proper protocols for managing situations
that test integrity.
But these are soulless and ineffective
in shaping the right behaviour even
when nobody is looking, if organisations
don’t also take steps to perpetuate and
inculcate the right culture. Ultimately,
how individual behaviour and values are
applied when operating in the corporate
environment basically underpins the
creation of an ethical organisational
culture – which will in turn encourage
the right behaviour among staff,
inculcate integrity and develop good
governance. “At the heart of integrity
is making the right decision,” said Dr.
Nurmazilah. Each organisation is an
individual entity; it has to work out the
best way to enable its systems, people
and processes to make the right choices.
INSTITUTIONAL INITIATIVES
FOR INTEGRITY
Institutions too must play their
respective roles to ensure security and
integrity, especially the integrity and
protection of data in an increasingly
digital and connected world where
one decision can have multifarious
consequences. While business drives
economic prosperity by providing jobs
and training, the information it has
access to needs to be appropriately
safeguarded from misuse and abuse.
Non-Governmental Organisations can
play a watchdog role by supporting the
poor, identifying instances of the abuse
of power and exploitation or oppression
of marginalised groups and generally
fostering a sense of community.
The media safeguards the quality
of information that is disseminated,
and correctly educates, informs and
entertains the public in a wholesome,
positive way. In parallel, the government
should prioritise economic prosperity
for its citizens and ensure integrity of its
social mission by guaranteeing equitable
distribution of resources and wealth for
all.
(From left) Dr. Nurmazilah Dato’ Mahzan, Rashidah Hussen and Eulis Rachmatiah
Iskandar
ALL LEVELS NEED TO UNDERSTAND THEIR RESPECTIVE ROLES AND MODIFY (THEIR BEHAVIOUR) TO SUIT THEIR OBJECTIVES.
Rashidah Hussen
Director, Integrity Division, IRBM
MAY / JUNE 2018 | ACCOUNTANTS TODAY 53
REPORTING BY MIA INTEGRATED REPORTING STEERING COMMITTEE
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INTEGRATED REPORTINGTELLING THE VALUE CREATION STORYTaking a page from the best – Winners of the NACRA Integrated
Reporting Awards 2017. This two-part article highlights certain key
areas for improvement and exemplary best practices collated from
the adjudication of the Intergrated Reporting Awards 2017.
PART 1: DIVING INTO THE GUIDING PRINCIPLES
At the heart of integrated reporting
(IR) is the desire to communicate
an organisation’s value creation
story in a manner that engages
its stakeholders. The Integrated
Reporting Framework (Framework)
speaks extensively about how value
creation should be communicated,
taking into consideration the
capitals available to an organisation.
Specifically, the Framework provides
Guiding Principles that underpin
the preparation and presentation
of an integrated report, informing
the content of the report and how
information should be presented.
This article, the first in a two-
part series, focuses on the common
findings arising from the Integrated
Reporting Awards (IR Awards)
adjudication of the National Annual
Corporate Report Awards (NACRA)
2017, analysed by the Guiding
Principles in the Framework.
Before diving in, the Committee
congratulates the IR Award 2017
winners on their well-deserved win.
54 ACCOUNTANTS TODAY | MAY / JUNE 2018
INTEGRATED REPORTING – TELLING THE VALUE CREATION STORY
Sime Darby Berhad clinched the
coveted Platinum Award, setting
the benchmark for excellence in
integrated reporting. The Gold Award
went to Telekom Malaysia Berhad
while Petronas Gas Berhad and
Tenaga Nasional Berhad tied for a
joint Silver Award. We also commend
all participants for their efforts in
producing integrated reports.
AREAS FOR IMPROVEMENT
Accordingly, we wish to highlight
certain key areas for improvement
from the adjudication of the IR Awards
2017. In discussing the observations,
examples of good practices are
featured, making reference to the
annual reports of the IR Awards 2017
winners above.
STRATEGIC FOCUS AND FUTURE
ORIENTATION
Observations
In articulating an organisation’s
value creation strategies, there
could have been clearer linkages
to their resources or capitals (as
referred to in the Framework). The
informational value of the disclosures
could be enhanced if the strategies
were demarcated into short-term,
medium-term or long-term strategies.
In particular, the adjudicators found a
lack of disclosures addressing long-
term strategies.
Exemplary practice
Petronas Gas Berhad Annual
Report 2016 pages 74-78.
Their 3ZERO100 strategy was
communicated well, with clear
progression of strategies up to year
2020. Petronas Gas Berhad’s focus
on strategy is also shown via frequent
referencing throughout the report.
CONNECTIVITY OF INFORMATION
Observations
The value creation processes
should clearly articulate the connection
between inputs, outputs and outcomes.
The interdependencies and trade-offs
between capitals could also be better
articulated.
Exemplary practice:
Tenaga Nasional Berhad Integrated
Annual Report 2016 pages
87-108.
Tenaga Nasional Berhad’s
sustainable value creation story is
linked to the different capitals of the
organisation through the use of icons.
The different capitals are also referenced
throughout the report where applicable.
STAKEHOLDER RELATIONSHIPS
Observations
The key concerns of stakeholders
should be communicated clearly in
the report. Organisations should also
make an effort to show how the
organisations’ strategy addresses the
needs of their stakeholders.
Exemplary practice
Petronas Gas Berhad Annual
Report 2016 pages 224 - 225.
The business model of Petronas
Gas Berhad creates value for their
stakeholders through the depiction of its
integrated value chain. The disclosure
clearly links the inputs, outputs and
outcomes of the business process for
the key stakeholders.
MATERIALITY
Observations
The materiality determination
processes were not clearly articulated.
There was also a lack of disclosure
of how material matters affect the
organisation’s value creation.
Exemplary practice
Telekom Malaysia Berhad
in ed al hain Th di lo
MAY / JUNE 2018 | ACCOUNTANTS TODAY 55
INTEGRATED REPORTING – TELLING THE VALUE CREATION STORY
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Integrated Annual Report pages
54-55.
There was robust discussion
on the identification of Telekom
Malaysia Berhad’s material issues. The
disclosures covered the identification
process, the linkages between the
organisation’s material assessment and
its sustainability strategy. The material
issues were also set out on a materiality
radar for ease of understanding.
CONCISENESS
Observations
Organisations should reduce or
eliminate as much as possible the use
of generic or boilerplate disclosures.
These disclosures add bulk to the
annual report but provide little value
to the user. In achieving conciseness,
organisations should also make greater
use of infographics in place of lengthy
paragraphs.
Exemplary practice
Sime Darby Berhad Annual
Report 2016 pages 16-23.
As a conglomerate with operations
in the plantation, industrial, motors,
property and logistics sector,
Sime Darby Berhad succeeded in
communicating succinctly. The flow
of information is logical and easy to
follow. The organisation also makes
good use of infographics throughout
the report, making it easy for readers to
understand.
RELIABILITY AND
COMPLETENESS
Observations
Disclosures should be more
balanced, with disclosures providing
both positive and negative outcomes.
There was also a lack of disclosure on
the mechanisms that the organisations
employed to ensure the reliability of the
information in the annual report.
Exemplary practice
Tenaga Nasional Berhad
Integrated Annual Report 2016
pages 40-41.
Disclosures were balanced with
Tenaga Nasional Berhad openly
disclosing their “lost time injury
frequencies” and accident rates. In
addressing these challenges, Tenaga
Nasional Berhad also highlighted its
safety and health initiatives.
Telekom Malaysia Berhad
Integrated Annual Report page
(111).
The preamble to Telekom Malaysia
Berhad’s annual report indicated to what
extent assurance had been obtained
over the reliability and completeness of
the information provided in the annual
report.
CONSISTENCY AND
COMPARABILITY
Observations
There was an overall lack of
benchmarking against industry
statistics and other comparable
organisations. Hard key performance
indicators should also be disclosed
to enable users to make informed
assessments. Disclosure of results
from prior periods will also assist
the stakeholders in gauging the
performance of an organisation over
time.
Exemplary practice
Sime Darby Berhad Annual
56 ACCOUNTANTS TODAY | MAY / JUNE 2018
INTEGRATED REPORTING – TELLING THE VALUE CREATION STORY
Report 2016 pages
32-111
Sime Darby Berhad reported
information in a systematic and
consistent manner, enabling
easy comparison against past
performance. Common industry
benchmarks and terminologies
were also used, further aiding
comparability.
The examples of good
practices given above are
to facilitate discussion of the
specific Guiding Principles and are not meant to be treated as the
“perfect” or the “only way” to articulate these principles. Instead, the
key takeaway is to observe how the winners have communicated their
unique value creation story and leave you inspired to craft your own.
The IR Awards adjudicators hope that these key observations will
provide additional guidance to the participants of NACRA and other
organisations looking to embark on their own IR journey.
Established by the Institute in 2014 upon the
recommendation of the Securities Commission
Malaysia, the Integrated Reporting Steering
Committee (IRSC or the Committee) focuses on
creating awareness and promoting IR in Malaysia.
The Integrated Reporting Awards category
was introduced in the National Annual Corporate
Reporting Awards (NACRA) in 2017. The key
observations identified during the review of the
NACRA 2017 submissions have been segmented
using the Guiding Principles from the IR
Framework as a basis for discussion.
To access materials on the Guiding Principles,
the Framework or to learn more about IR, please
visit https://integratedreporting.org/. The second
article in this two-part series, focussing on the
common findings analysed by Content Elements,
will be released in the next issue of Accountants
Today.
*for renewal of Practising Certificate, the PII policy/policies for member firm/s must be valid until 30 June 2019 and min. 20 CPE credit hours for 2017 has been updated in MIA record.
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