INTHEBLACK May 2022 - Magazine - Page 29
“THE BENEFITS AND ADVANTAGES RESULTING FROM THE PREENACTED IMPLEMENTATION OF ACCRUAL ACCOUNTING HAVE
BEEN SEEN SIGNIFICANTLY AT THE LEVEL OF DEPARTMENTS,
MINISTRIES AND THE MALAYSIAN GOVERNMENT AS A WHOLE,
ESPECIALLY IN THE ASPECTS OF ASSET AND LIABILITY
MANAGEMENT.”
DATUK DR YACUB MUSTAFA FCPA, ACCOUNTANT GENERAL OF MALAYSIA
a cash-based financial statement to be presented to
parliament,” he says.
“Therefore, relevant amendments to these laws and
regulations are made to enable a set of accrual-based
financial statements to be tabled in parliament.
“The challenges of developing an accounting
system that implements accrual-based transaction
processing and reporting, while meeting cash-based
reporting requirements based on the current legal
framework, are inevitable.”
One such challenge concerns the development
and enhancement of both accountants’ and
administrative skill sets.
About 1000 government employees from across
different ministries have undertaken training
sessions on the new Malaysian accounting policies
and on how to use the government’s accrual
accounting system.
They have then been tasked with training about
73,000 other users throughout Malaysia.
A CLEARER FINANCIAL PICTURE
Until amendments to all relevant acts are approved
by the Malaysian Parliament, accrual-based financial
statements are being categorised as “management
reports”.
“These compulsory accrual-based financial
statements, which have been prepared at the
ministries and federal government levels, have
been used as a reference by the government’s top
management to obtain an overview of Malaysia’s
performance and financial position,” Mustafa says.
“The benefits and advantages resulting from
the pre-enacted implementation of accrual
accounting have been seen significantly at the
level of departments, ministries and the Malaysian
Government as a whole, especially in the aspects
of asset and liability management.”
Mustafa says additional information available
from the accrual accounting system has provided
a broader picture of public financial sustainability
in Malaysia.
“Fiscal aggregate analysis can be performed
from various angles based on the true depiction
of government operations, taking into account the
liquidity of assets, commitments for current and
non-current liabilities as well as the real snapshot of
financial performance and position, measured under
fair value convention.
“The comprehensiveness of financial reporting
under the accrual concept contributes towards
better transparency, which produces improved
decision-making on public policy planning
and resource utilisation, thus supporting the
establishment of good governance and excellent
public service delivery.”
BRIDGING THE ACCOUNTING GAP
The implementation of accrual accounting by the
federal government of Malaysia has bridged the
gap between accounting practices in the private
sector and the public sector, which, according
to Mustafa, has had a positive impact on the
marketability of public sector accountants.
Furthermore, the accounting and financial
reporting approach under MPSAS, which is
similar to the practices under the Malaysia
Financial Reporting Standards (MFRS), offers
additional value to public sector accountants in
providing their services as facilitators to the
private sector.
“In fact, public sector accountants have an
advantage in terms of a large-scale implementation
framework with a variety of forms of transactions
that may not be available in the private sector,”
Mustafa says.
“Thus, there is no doubt that the implementation
of accrual accounting is a very good and strategic
step to elevate the accounting profession in the
public sector.
“The implementation of accrual accounting
has also paved the way for increasing the number
of public sector accountants with professional
qualifications.”
intheblack.cpaaustralia.com.au May 2022 29