Public practice is governed by the Accountants Act 1967, Membership and Council Rules 2001 and MIA By-Laws (On Professional Ethics, Conduct and Practice).
Under the Act, the person must be a member of the Institute, and is prohibited from public practice through a body corporate except where it is allowed by other statutes for limited areas of public practice, such as provision of tax services, corporate secretarial services and even as investment advisors.
A member, in most instances, is allowed to be engaged in public practice as a sole practitioner or in partnership only with another member(s) as the Act and By-Laws prohibits the sharing of profits with non-members. All firms in public practice are described as firms of chartered accountants.
Only members registered as chartered accountants with valid practising certificate can describe and hold themselves out as chartered accountants in public practice and are able to set up firms providing public practice services.
Public Practice services includes:
- auditing including internal auditing;
- accounting and all forms of accounting related consultancy;
- accounting related investigations or due diligence;
- forensic accounting;
- taxation, tax advice and consultancy;
- bookkeeping;
- costing and management accounting;
- insolvency, liquidation and receiverships;
- provision of management information systems and internal controls;
- provision of secretarial services under the Companies Act 2016]; or
- such other services as the Council may from time to time prescribe.
Members also must have their principal or only place of residence in Malaysia to be in public practice in Malaysia.
Members who wish to set up a practice must first obtain the approval of the MIA on the use of the firm’s name. There are 2 types of firms which are audit and non-audit.
Professionals governed under their respective acts are exempted from premise licensing under Section 102 (s) of Local Government Act and Licensing of Trades, Businesses and Industries (Federal Territory of Kuala Lumpur) By-Laws 2016. Hence, audit and non-audit firms of Chartered Accountants under the Accountants Act, 1967 are exempted from premise licence requirements by the local Council. However, the signboard licence is still applicable.
Public Practice Pathways in Malaysia
Attended MIA Public Practice Programme (PPP)
Submit Application for Practising Certificate (PC)
No additional licensing requirements are needed and member can register a non-audit firms.
- Applicant has passed the Final Examination of Part I of the First Schedule of the Accountants Act, 1967; OR admitted as a member of any of the recognised bodies specified in Part II of the First Schedule of the Accountants Act, 1967;
- Applicant must be a member of the MIA and registered as a “Chartered Accountant”;
- Applicant must hold a Malaysian citizenship or fulfil the residency requirements in Malaysia;
- Applicant is not a bankrupt who has not obtained release either in Malaysia or abroad;
- In the 5 years preceding to the application, the applicant has not been convicted of any offence within or outside of Malaysia which involves fraud or dishonesty, which can lead to imprisonment for 3 months or more;
- Applicant has never been denied membership or suspended from any recognised accountancy body;
- There is no pending enforcement or legislative action that has not been resolved against the applicant under Companies Commission of Malaysian Act, 2001 (“CCM Act 2001”) or any provisions or legislation in the First Schedule under the said Act;
- Applicant must hold a valid practising certificate issued by MIA. Please take note that the practising certificate is only valid for 6 months. Therefore, it is advisable to submit the audit licence application immediately after you have obtained the practising certificate;
- First time applicant is required to attend the Public Practice Programme organised by MIA. The certificate of attendance must be valid during the submission of application;
- Applicant must have at least six (6) years of accumulative working experience, on full time basis, which can be either Pre- & Post- MIA membership, but
- At least three (3) years upon being a MIA member or minimum 2 years upon being a MIA member for candidates who work in foreign jurisdictions for at least a (1) year;
- At least five (5) years audit experience where the latest 2 years audit experience must be in Malaysia environment;
- Have carried out at least 7,500 audit hours and 40 engagements of audit of financial statements within five (5) years preceding to the application; and
- Applicant has served at least 1,800 audit hours as an Audit Supervisor. (Audit Supervisor means to have a managerial role in supervising, managing and controlling the involvement in audit of financial statements including audit planning and preparation of auditors reports).
- Applicant must submit a sponsor letter that meets the following requirements:
- The sponsor shall be an approved company auditor and possess a valid approval as a company auditor;
- The sponsor must be a person who has previously worked with the applicant and able to verify the applicant’s audit experience (including audit hours, supervisory hours and level of audit engagement) and his job role as well as being able to assess whether the applicant is a suitable and qualified person (fit and proper);
- The sponsor letter shall be submitted in the prescribed format as provided;
i. Sponsor Letter Format (Malay)
ii. Sponsor Letter Format (English)
- If the current sponsor’s confirmation is unable to meet the minimum hours of audit experience, additional letters from other sponsors that can confirm the applicant’s audit experience should be included; and
- To include any relevant supporting documents that can verify the details in the sponsor letter.
To be a liquidator, a member must be in possession of a liquidator licence granted by the Accountant General’s Office pursuant to the Companies Act 2016.
The requirements for applying for a liquidator licence are as follows:-
- Must be a Malaysian citizen or permanent resident;
- A member of recognised professional body under Section 433(5) on the Companies Act 2016 and hold a valid Practising Certificate;
- Not a bankrupt, not been convicted in the immediate past 5 years whether within or outside Malaysia of any offence involving fraud or dishonesty relating to the promotion, formation or management of any body which punishable on conviction with imprisonment for three months or more;
- Possess sufficient working experience in liquidation practice as follows:
- 5 years of full-time working experience in the field of liquidation;
- Candidates who have left liquidation practice, but still within a 3 years period prior to the application to be approved company liquidators, are still eligible to apply.
- For candidates who have left liquidation practice for more than 3 years, they must work for at least 1 year in insolvency in the Malaysian environment.
- Experience in other countries can also be considered however, candidate must work for at least 1 year in liquidation in the Malaysian environment.
- A sponsor letter from an approved liquidator who has supervised the candidate;
- Must have the capacity in carrying out the duties as a liquidator.
The issuance of a licence to be a tax agent is governed by the Income Tax Act 1967.A licence is only granted after the applicant has passed an interview conducted by the Inland Revenue Board.The practice of taxation may be carried out under a body corporate. However, it has to be established as a separate entity from that of a public practice and may not be referred to as a tax consultant or tax adviser. Only members who hold themselves out as chartered accountants with valid practising certificates may use these descriptions under a sole proprietorship or a partnership. A body corporate cannot be described as chartered accountants and it cannot be registered as a member firm of the Institute.
MIA is one of the recognised bodies under Fourth Schedule of the Companies Act 2016, which qualify its member to become a company secretary. Section 241 of the Companies Act 2016 requires any person who is qualified to act as a secretary and who desires to act as a secretary to register with Suruhanjaya Syarikat Malaysia (SSM) before he can act as a secretary. SSM will issue a practising certificate for company secretary upon satisfaction on the qualification and requirements specified under the Companies Act 2016, regulation and guideline.Requirements to act as company secretary for MIA members:
- a natural person;
- eighteen years of age and above;
- a citizen or permanent resident of Malaysia;
- not disqualified under section 238 of the Companies Act 2016; and
- not have any pending legal action under any provision of the laws specified in the First Schedule of the Companies Commission of Malaysia Act 2001
