Smaller accounting firms in Malaysia have been urged to merge or form alliances to increase the breadth of services they provide and better equip themselves to meet the challenges of liberalisation and globalisation.
Second Finance Minister Datuk Dr Jamaludin Jarjis said Malaysia had the potential to be “a hub in Asia for the accounting industry” with services exported to the region, but that required local firms to be of a certain size maintaining high standards and offering a wide range of services from auditing to tax and financial planning.
Without the mergers, however, Jamaludin warned of grave consequences for the future of some 1,400 small local accounting practices in the country.
“They will lose out?and we don’t really want that to happen,” he told reporters after opening the National Accountants Conference 2003 in Petaling Jaya yesterday.
He, however, ruled out the suggestion that the government would interfere: “The mergers would be market driven,” he said.
The industry is currently dominated by the so-called “Big Four” accounting firms that have among them the lion’s share of professional work and fees with most listed corporations and multinationals as their clients.
However, the vast majority (over 90%) of firms in Malaysia are small proprietorships and two-partner firms, whose main income sources could be at risk if Malaysia follows countries like Singapore in abolishing the audit requirement for small companies.
Malaysian Institute of Accountants president Datuk Dr Abdul Samad Alias said that in light of global dynamics, change was no longer an option for local accountants.
“You simply cannot survive if you insist on standing still,” he warned his fellow accountants in his address to the conference.
Samad asked smaller firms to specialise and achieve expertise in their core areas.
“Then, when required (they can) make strategic partnerships with other firms offering other services,” he said.
On another matter, Jamaludin said the amount of excise duty to be imposed on imported cars would be known before the end of the year.
Jamaludin, who was responding to reporters’ questions on whether the government might be back-peddling on its decision to reduce import duties and impose excise duties on imported vehicles, confirmed that the Treasury was in meetings with the International Trade and Industry Ministry to determine the excise rate that would be imposed.