Professional Documents
Culture Documents
SESSION I 2018/2019
MBAC 4153
ACCOUNTING THEORY
TITLE :
CHAPTER 8
STANDARD SETTING IN A POLITICAL ENVIRONMENT
PREPARED BY :
ANAS ARIEF BIN ABDUL RAHMAN 15BB04064
MUHAMAD IRFAN BIN MOHD LIZAM 15BB04014
PREPARED FOR :
SIR MOHAMAD SOFUAN BIN MOHAMAD SALEH
TABLE OF CONTENT :
PAGE
INTRODUCTION 1
DEVELOPMENT OF STANDARD SETTING IN MALAYSIA 2
MALAYSIAN ACCOUNTING STANDARDS BOARD (MASB) 3
RESPONSIBILITIES OF FRF 4
AIMS OF THE MASB 5
COMPOSITON OF THE BOARD 6
ISSUES COMMITTEE 7
DUE PROCESS IN THE ISSUANCE OF MASB STANDARDS 8
FUNCTIONS AND POWERS OF MASB 9
FUNCTIONS OF MASB AS FORMULATED IN ITS MISSION STATEMENT 10
OBJECTIVES OF MASB 11
CHALLENGES FOR STANDARD SETTING 12
STANDARD SETTING IN ISLAMIC PERSPECTIVE 13
CONCLUSION 14
REFERENCE 15
INTRODUCTION
1
DEVELOPMENT OF STANDARD SETTING IN MALAYSIA
2
MALAYSIAN ACCOUNTING STANDARDS BOARD (MASB)
The standard setting role by MIA and MACPA was superseded by Malaysian
Accounting Standards Board(MASB) in 1997. MASB is established by under the
Financial Reporting Act 1997. The Act was gazette on 6 March 1997. In addition to
MASB, the Act also created Financial Reporting Foundation (FRF). The overall
responsibility of the FRF is to oversee the operating activities of the MASB.
The FRF comprises of nineteen members who are appointed by the Minister of Finance.
Seven members are ex-officio representing the Minister of Finance, the Central
Bank, the Securities Commission, the Companies Commission of Malaysia, the
Bursa Malaysia Berhad, the MIA and the MASB
Twelve members representing a broad spectrum of interest groups – principal
officers of public listed companies, senior partners of public accounting firms and
persons with other relevant experience and background.
3
RESPONSIBILITIES OF FRF
To provide views to the MASB on matters which the MASB seeks to undertake or
implement with respect to the development and issue of accounting standards
and conceptual framework,
To review the performance of MASB
To be responsible for the financing arrangements and operations of the MASB
To approve MASB budget
To engage or employ persons and determine the conditions of such
appointments as are necessary to assist the FRF and MASB perform their
functions under the Act,
To administer the fund established to finance the ongoing operations of FRF and
MASB including management of funds not expanded on operations during any
period
To maintain proper accounts and prepare an annual statement of accounts of the
FRF
To forward annual statement of accounts and audit report to the Minister of
Finance, and the report on the activities of the FRF and MASB at the end of each
financial year, and
To perform such other function as the Minister of Finance prescribe.
4
AIMS OF THE MASB
5
COMPOSITION OF THE BOARD
The FRA specifies the composition of Board membership. The members of the Board
are appointed by the Minister of Finance as follows:
A Chairman,
The Accountant General; and
Six other members who possess knowledge and experience in matters of
financial accounting and reporting and in one or more of the following fields:
accountancy, law, business and finance. The Act specifies that at least five of
these members should be members of the Malaysian Institute of Accountants.
Three advisors representing the Securities Commission, the Companies
Commission of Malaysia and the Central Bank.
6
ISSUES COMMITTEE
The Committee, hence, is responsible for reviewing accounting issues that have
received or likely to receive divergent views in interpretation and to provide
recommendations to the board for decisions. Currently the Committee comprises 3
representatives from the Big Four,1 from medium practices, 1 from the corporate sector,
1 academic, 1 analyst and 1 solicitor.
7
DUE PROCESS IN THE ISSUANCE OF MASB STANDARDS
STAGE 1: Topics which are likely to become MASB standards are identified by the
MASB either from its own research, from external sources (for example, the IASB) or
from interested parties submissions.
STAGE 3: Once relevant issues have been identified the MASB appoints a working
group to debate on the issues. The working group is chaired by a member of the MASB
and comprises a project manager, representatives from industry, auditors and
regulatory bodies.
STAGE 7: An exposure draft may be amended in the light of feedback resulting from the
exposure period. The MASB provides the latest list of approved accounting standards
on its websites. Exposure draft are also available on the websites: http://masb.org.my/
8
FUNCTIONS AND POWERS OF MASB
9
FUNCTIONS OF MASB AS FORMULATED IN ITS MISSION STATEMENT
To develop and promote high quality accounting and reporting standards that are
consistent with international best practices for the benefit of users, preparers,
auditors and the public in Malaysia
To contribute directly to the international development of financial reporting for
the benefit of users, preparers and auditors of financial reports.
10
OBJECTIVES OF MASB
To develop high quality, clear and enforceable national accountant standards for
financial reporting that benefit users,
To bring about harmonization of national accounting standards with international
accounting standards,
To promote the use and application of those by way of communication with and
education of users, preparers, auditors and the public,
To actively contribute to the development of accounting standards internationally,
including, Islamic-based accounting standards, and
To promote and support research in the area of financial reporting, in particular,
for emerging markets and Islamic markets.
11
CHALLENGES FOR STANDARD SETTING
12
STANDARD SETTING IN ISLAMIC PERSPECTIVE
13
CONCLUSION
14
REFERENCE
15