A tale of two professional Bodies (MIA & MICPA)

Dear students, as promised, here is little something to help you out with your professionalization of Accounting in Malaysia re-write ; )

The following has been extracted and condensed from Dr. Susela Devi’s Chapter (Chapter 5: The Malaysian Accountancy Profession and its Imperial Legacy) in Accounting & Empire edited By Chris Pollaous and Suki Sian.

The important thing to remember here is that, in the beginning, there was MACPA. Formed in the 1950s (1958 to be more exact). It wasn’t the first professional body in Malaysia (ACCA Malaysia chapter was established in 1936) but it was certainly the most influential of its time.

The MACPA (or MICPA as it is known today) was set up primarily by a group of local CAs (ICAEW graduates) who graduated from UK. A CA is essentially a ‘Chartered Accountant’ however, only ICAEW holders have the privilege of calling themselves THE ‘CAs’. How this came about, I’m not sure, but what I am sure of is that from the very beginning, the MACPA had its roots in an elitist tradition of allowing only the highest quality (read: ICAEW) of accounting graduates of the time.

In the 1960s, MACPA dominated the professional accounting scene in Malaysia and a lot of the Big Audit Firms of the time had audit partners from the ranks of the MACPA. Thus MACPA largely dictated the membership of the accounting profession in Malaysia at the time. MACPA had very high and strict standards and did not recognise professional members from the ASA (Australian Society of Accountants) and to a certain extent, even the ACCA (which till today admits students from all walks of life, regardless of qualification, then you have to pass the *HARD* exams).

The issue was mainly that paper ACCAs (ACCA students who have passed the exam but haven’t obtained work experience) were being denied positions in big audit firms because they were deemed ‘unworthy’ in MACPA’s eyes. This unofficial directive was carried out by audit partners in the Big Firms who were MACPA members.

So, for a long time, ACCA graduates had to work in smaller firms or join the corporate sector in order to get their relevant experience, unlike the more privileged and elite MACPA members. The MACPA had notoriously difficult entrance requirements and essentially set the standard as high as ICAEW (not aware of the ICAEW standard? Leave a Q in the comments!).

Then, in 1967, the Accountants Act was passed and the MIA was set up with the purpose of registering accountants. Pursuant to the act, in order to call yourself an accountant, you had to be recognised and registered by the MIA (Malaysian Institute of Accountants). In the beginning MIA was set up as a purely official body, an arm of the Government designed to basically rubber-stamp qualified accountants as well, ‘accountants’.

However, in the 1970s, with the creation of the NEP, there was a greater need for qualified accountants in the industry, but there were very few MACPA members, due to their strict entry requirements and highly elitist nature. The Universities were churning out a lot of accounting graduates at the time so instead of joining the MACPA, many of these graduates, and the paper ACCAs mentioned earlier ended up joining MIA.

In the 1980s, there was an action taken to merge both the MACPA and MIA together in order to streamline the national professional accounting bodies. However this merger failed in 1985 due to resistance from certain parties (Institute of Cooperative Auditors whose 50 members would be de-recognised as accountants as part of the merger). When the merger failed, the MIA was eventually activated as a proper professional body in 1987 and held their first annual general meeting aimed at rooting out ‘bogus accountants’ meaning accountants who were operating without being registered (by the MIA, who else?).

ACCA members, sensing an opportunity to release MACPA’s elitist stranglehold in the accounting profession flooded the MIA with membership from their members and were successful in directing future MIA actions. A lot of the accountants who joined the MIA were largely made up of accountants who were dissatisfied with the elitist ways of MACPA. They wanted a platform where they could get back at MACPA for the perceived injustices against them and they got it through MIA.

One of the MIA’s first actions after activation was the passing of bye-law 6, which stated that all accountants registered in Malaysia could only operate as Public Accountants (PAs) or Registered Accountants (RAs). So this, in effect, took away the ‘CA’ titles that MACPA members were so very proud of and made them as equal as everyone else. This, of course angered the MACPA because it did somewhat diminish their elite status and their ability to price their services higher.

In an attempt to get back at MIA, MACPA tried to takeover MIA membership by encouraging their members to join MIA. However this attempt failed miserably as MACPA has very few members (due to their high entry requirements) and despite their best attempts, could not gain a majority hold in MIA.

MIA and MACPA members alike began pointing out foreign influences in each other’s operations, in an attempt to get the Government on their side. On MACPA’s side, MIA pointed out that they are made up of mostly UK graduates who came back to Malaysia and are, by extension ‘Foreign-agents’. In the MIA however, most of their members are made up of foreign professional members, (ACCA, ASA, etc.) and the argument was that they were the representatives of foreign interests..etc...etc.

The state generally prefers to stay out of their bickering and let the profession sort itself out. Till today, the power struggle continues between the more accommodating MIA and the highly elitist MACPA. In a recent turn of events, the MIA has stated its desire to institute competency assessments for its members in line with their membership in the IFAC (International Federation of Accountants) directive for implementation of competency assessments. This could make the high entry requirements set by MACPA redundant. In response, the MACPA rebranded itself as the MICPA (replacing Association with Institution – thereby making it an ‘institution’ like the MIA) and has begun re-engineering itself in the face of IFAC intiatiives and global competitions. Interestingly, the MICPA has signed an MoU with the ICAA (Institute of Chartered Accountants of Australia) for recognition, examination and membership arrangements.

To End this interesting article, here is a question for all you accounting students, when you graduate, who would you like to join? MIA or MICPA? Answer in the comments below and please provide your reasons, please note that marks will be given for participation!