HISTORICAL PERSPECTIVE OF FINANCIAL REPORTING

REGULATIONS IN MALAYSIA
1940, 1946, 1956 Companies Ordinances (and amendments) - FIRST DOCUMENTED
FINANCIAL REPORTING REGULATIONS before Malaysia (then Malaya) achieved her
independence on 31 August 1957.
*continued to play an important role in regulating financial reporting after the independence
of Malaysia.
1965 Establishment of the Companies Act repealed Companies Ordianances.
Reporting requirements, rules and regulations on accounting were formally
established.
Contains a schedule (Ninth Schedule) specifies the disclosure requirements in
financial statements of Malaysian companies.
Remained relatively unchanged over the years until
1985 the Companies Act was amended (to incorporate a revised Ninth Schedule).
Ninth Schedule:
1. Remains in force till to date
2. Contains more comprehensive disclosure requirements and
3. Specifically requires that a statement of source and application of funds be an integral
part of financial statements.
Companies Act 1965 financial statements must contain:
1. Profit and loss account
2. Balance sheet
3. Statement of source and application of funds
4. Notes to account
*main concern accounts should be true and fair.
Prior to 1/9/1998 Companies Act did not make reference to the accounting standards issued
by the professional accountancy bodies. Thus, in practice and in the absence of an accepted
accounting framework for financial accounting in Malaysia, companies then tended to use the
Act as the absolute disclosure requirements rather than as min requirements.
*the extent of voluntary disclosure practices among Malaysian companies was very low, even
among listed ones.
It is not suprising that in the past, there were many preparers in Malaysia who believed that
disclosures should be strictly in accordance with those required by the Act ( and approved
accounting standard) and nothing more.
This trend however has changed in recent years when the Malaysian approved accounting
standards were amended to converge with those of the International Financial Reporting
Standards issued by the International Financial Reporting Standards Board (IASB).
*focus provide info that is useful to users in making economic decisions.

1958 Malaysian Institute of Certified Public Accountants (MICPA) was established as a

company limited by guarantee.
MICPA:
1. PRIVATE SECTOR ACCOUNTANCY BODY.
2. Regulates the practices of its members who carry the title of a certified public
accountant (CPA).
3. Issued the first accounting guidance in 1968.
4. Dealt with specimen company accounts.

ITEMS:
Being drawn up so as to comply with the requirements of the 9th
Schedule of the Companies Act 1965.
Were largely influenced by the practices then in UK and Australia
most of its members were either trained in the UK or Australia
@ had professional qualifications from accountancy bodies.

1978 MICPA began adopting IASs (IASs 1 to 4) after being admitted as a member of the
then International Accounting Standard Committee (IASC).
1984 First Malaysian Accounting Standard (MAS 1) on Earnings per share was issued.
*process of the adoption of IASs & development of MASs continued until 1997.
1997 Malaysian Accounting Standards Board (MASB) was established to take over the
role of standard setting in Malaysia.
1967 Malaysian Institute of Accountants (MIA) was established under the Accountants Act
1967.
Operates largely as a private sector accountancy body.
Its regulations cover the practices of the whole accounting profession in Malaysia.
Remained inactive and concentrated mainly on the registration of accountants in
Malaysia after its establishment.
1987 Its operations were elevated to that of a national accountancy body. Also began to
issue accounting standards.