CONTENTS · Page Notice of Annual General Meeting NOTICE IS HEREBY GIVEN that the Forty-eighth Annual General Meeting of the Institute will be held at Bilik Meranti, Level 4, The

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NoticeofMeeting 2

ObjectsandMission 4

Council2005/2006 6

Committees2005/2006 7

President'sStatement 19

ReportoftheCouncil 54

BalanceSheet 56

IncomeStatement 57

StatementofRecognised 58 Gains&Losses

CashFlowStatement 59

NotestotheFinancialStatements 60

StatementbyCouncilMembers 71

StatutoryDeclaration 71

ReportoftheAuditorstoMembers 72

ReportandFinancialStatements 96 ofMACPAEducationalTrustFund

FormofProxy 119

75 LaporanMajlis

77 KunciKira-kira

78 PenyataPendapatan

79 PenyataKeuntungandan KerugianyangDiiktiraf

80 PenyataAliranTunai

81 Nota-notakepadaPenyataKewangan

92 PenyataolehAhli-ahliMajlis

92 AkuanBerkanun

93 LaporanJuruauditkepadaAhli-ahli

108 LaporandanPenyataKewangan TabungAmanahPendidikanMACPA

119 BorangProxy

C O N T E N T SK A N D U N G A N

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Notice of Annual General MeetingNOTICE IS HEREBY GIVEN that the Forty-eighth Annual General Meeting of the Institute will be held at Bilik Meranti, Level 4, The Pan Pacific Hotel, Jalan Putra, Kuala Lumpur on June 24, 2006 at 10:00 a.m. for the following purposes:

1. To receive and adopt the Report of the Council and the Financial Statements of the Institute for the year ended December 31, 2005.

2. To elect the following nominees as Council members:

Abdul Halim bin Md Lassim Datuk Dr Abdul Samad Hj Alias Ahmad Mustapha Ghazali Goh Lee Hwa Lim Tian Huat Mohamed Raslan Abdul Rahman Pushpanathan A/L S A Kanagarayar See Huey Beng Dr Veerinderjeet Singh Dato’ Yeo How

3. To appoint two auditors.

4. Any other business.

By order of the Council

TAN SHOOK KHENG (Ms)Secretary

Kuala LumpurMay 29, 2006

Note:

A member entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy must be a member of the Institute. The instrument appointing the proxy must be deposited at the office of the Institute at No 15, Jalan Medan Tuanku, 50300 Kuala Lumpur, not less than 48 hours before the time set for holding the meeting.

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1. Pursuant to bye-law 91, the following are lists of members nominated for membership of the Council and for appointment as auditors :

i. In accordance with bye-law 5, the following Council members shall retire at the Annual General Meeting:

Datuk Dr Abdul Samad Hj AliasKhor Chin PengLim Tian HuatLim Kian ThiamLim Kok BengMohamed Raslan Abdul RahmanPushpanathan A/L S A KanagarayarDato’ Yeo How

Pursuant to bye-law 6, these Council members are deemed to be nominated for re-election except for the following members who have signified in writing that they do not desire to offer themselves for re-election:

Khor Chin PengLim Kian ThiamLim Kok Beng

ii. The following members who were appointed to fill casual vacancies in the Council shall retire at the Annual General Meeting in accordance with bye-law 13:

Ahmad Mustapha Ghazali (Appointed on 26.6.2004) Dr Veerinderjeet Singh (Appointed on 26.6.2004)

Pursuant to bye-law 6, these Council members are deemed to be nominated for re-election.

iii. The following nomination have been received for election to the Council in accordance with bye-law 7:

Abdul Halim bin Md Lassim Goh Lee Hwa See Huey Beng

iv. In accordance with bye-law 129, the following members shall retire as auditors of the Institute at the Annual General Meeting. Pursuant to bye-law 130, they are deemed to be nominated for re-appointment as auditors for the ensuring year:

Siew Kah Toong Tan Kim Leong, JP

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TheprincipalobjectsoftheInstituteassetoutintheMemorandumandArticlesofAssociationareasfollows:

(a) Toadvancethetheoryandpracticeofaccountancyinallitsaspects.

(b) Torecruit,educate,trainandassessbymeansofexaminationorotherwiseabodyofmembersskilledintheseareas.

(c) Topreserveatalltimestheprofessionalindependenceofaccountantsinwhatevercapacitiestheymaybeserving.

(d) Tomaintainhighstandardsofpracticeandprofessionalconductbyallitsmembers.

(e) Todoallsuchthingsasmayadvancetheprofessionofaccountancyinrelationtopublicpractice,industry,commerce,educationandthepublicservice.

Objects of the Institute

• To enhance the value and distinctiveness of the Certified PublicAccountant (CPA)qualification

• Topromotehighstandardsofprofessionalconductandtechnicalcompetenceofmemberstosafeguardpublicinterest

• Toprovidequalityprofessionaleducationandtrainingtherebycreatingacompetitiveadvantageformembers

The Malaysian Institute of Certified Public Accountants (Institut Akauntan Awam Bertauliah Malaysia) (3246-U) (Company Incorporated in Malaysia Limited by Guarantee)

Our Mission

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Council Members for 2005/2006

Seated - left to right:Dato'AbdulHalimMohyiddin(President)AhmadMustaphaGhazaliStanding - left to right:SukantaKumarDuttDato'AhmadJohanbinMohammadRaslanTehCheeGhee

Left to right:PeterLimThiamKeeDato'NordinBaharuddin(Vice-President)TanGheeKiat

Left to right:MohamedRaslanAbdulRahman

SamSohSiongHoonDrVeerinderjeetSingh

LimTianHuatTanChinHock

Not in photograph: Beh Tok Koay, Abdul Jabbar Abdul Majid, Datuk Dr Abdul Samad Hj Alias, Chin Kwai Fatt, Ho Heng Chuan, Khor Chin Peng, Lim Kian Thiam, Loh Lay Choon, Dato' Hj Maidin Syed Ali, Ng Kim Tuck, Poon Yew Hoe, Venkatramanan Viswanathan, Dato' Yeo How, Datuk Robert Yong Kuen Loke.

Standing - left to right:Pushpanathana/lSAKanagarayar

TanShookKheng(Executive Director)DatinHjhFadzilahbteSaad

LimKokBeng

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MICPA COUNCIL - 2005/2006 Attendanceat CouncilMeetings

President Dato’AbdulHalimMohyiddin (1989) KualaLumpur 6/6

Vice-President Dato’NordinBaharuddin (1987) KualaLumpur 5/5(LOA-1)

Members ● ◆ AbdulJabbarAbdulMajid (1981) KualaLumpur 2/2(LOA-4) ● ◆ DatukDrAbdulSamadHjAlias (1986) KualaLumpur 2/4(LOA-2) Dato’AhmadJohanMohammadRaslan (2003) KualaLumpur 3/5(LOA-1) AhmadMustaphaGhazali (2004) Selangor 1/5(LOA-1) ● BehTokKoay (1989) KualaLumpur 3/3(LOA-3) ◆ ChinKwaiFatt (2004) KualaLumpur 2/4(LOA-2) ◆ DatinHjhFadzilahbteSaad (1987) KualaLumpur 5/5(LOA-1) ◆ HoHengChuan (1987) KualaLumpur 2/6 ◆ KhorChinPeng (1991) KualaLumpur 2/4(LOA-2) ◆ LimKianThiam (1988) Selangor 4/5(LOA-1) LimKokBeng (1982) KualaLumpur 1/5(LOA-1) PeterLimThiamKee (2002) KualaLumpur 3/5(LOA-1) LimTianHuat (1999) KualaLumpur 2/6 LohLayChoon (2004) KualaLumpur 3/6 ◆ Dato’HjMaidinSyedAli (2002) Kedah 2/5(LOA-1) MohamedRaslanAbdulRahman (2002) KualaLumpur 2/6 NgKimTuck (2005) KualaLumpur 2/5(LOA-1) PoonYewHoe (1998) KualaLumpur 2/5(LOA-1) Pushpanathana/lSAKanagarayar (2001) KualaLumpur 4/6 SamSohSiongHoon (1983) Johor 5/6 SukantaDutt (1999) KualaLumpur 4/4(LOA-2) TanChinHock (2002) KualaLumpur 6/6 TanGheeKiat (1989) KualaLumpur 4/5(LOA-1) ◆ TehCheeGhee (2002) Selangor 5/6 DrVeerinderjeetSingh (2004) KualaLumpur 6/6 VenkatramananViswanathan (1986) Melaka 2/6 ◆ Dato’YeoHow (2003) Selangor 4/4(LOA-2) ◆ DatukRobertYongKuenLoke (1998) KualaLumpur 3/5(LOA-1)

Secretary MsTanShookKheng

Registered Office No.15,JalanMedanTuanku 50300KualaLumpur

Auditors SiewKahToong TanKimLeong,JP

Penang District Society c/oJ.Ramachandran P.O.Box325,10200Penang

● Denotes Past President

◆ Denotes member not in practice

( ) Denotes year in which member first joined Council

LOA Leave of absence

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COMMITTEES - 2005/2006

Executive Committee No.ofmeetings:5 Attendance

Dato’AbdulHalimMohyiddin(Chairman) 5Dato’NordinBaharuddin 4AbdulJabbarAbdulMajid 4DatukDrAbdulSamadHjAlias 0(LOA-1)Dato’AhmadJohanMohammadRaslan 3(LOA-1)BehTokKoay 5LimKianThiam 3(LOA-2)TanGheeKiat 4(LOA-1)

Terms of Reference:-

To identify and implement plans of action on specific issues of current concern affecting members, the Institute and the accountancyprofession.

Accounting & Auditing Technical CommitteeNo.ofmeetings:0 Attendance

SukantaKumarDutt(Chairman)DatukDrAbdulSamadHjAliasAhmadMustaphaGhazaliLohLayChoonNgKimTuckVenkatramananViswanathanDato’YeoHow

Co-opted MembersChiaKumChengStephenKhooLeeHinKanOoiCheeKunStephenOong S.Ampalavanar DrSuselaDeviDavidSiewKahToong RobertTanBunPoo

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Bank Negara Malaysia Guidelines Working GroupNo.ofmeetings:0SukantaKumarDutt(Convenor)SeowYooLinSooHooKhoonYeanRobertTanBunPoo

MIA-MICPA Joint Working Group on AuditingNo.ofmeetings:2 AttendanceDato’ Nordin Baharuddin (Co-Chairman) MIA 2Sukanta Kumar Dutt (Co-Chairman) MICPA 1Loh Lay Choon MICPA 2Chia Kum Cheng MICPA 0 JosephineEdward BursaMalaysiaBerhad 1Khairudin Ibrahim MIA 0Margaret Boh MIA 0Ng Mi Li MIA 1S.Ampalavanar MICPA 0Stephen Khoo Siong Kee MIA 0Dato’SiowKimLun SecuritiesCommission 0Thomas A. Scott MIA 0Robert Tan Bun Poo MICPA 2

MIA-MICPA Joint Working Group on Securities GuidelinesNo.ofmeetings:2 AttendanceSukanta Kumar Dutt (Convenor) MICPA 1Loh Lay Choon MICPA 1Ng Kim Tuck MICPA 2Ahmad Shahrul Hj Mohamed MIA 1Chen Voon Hann MIA 2Chia Kum Cheng MICPA 1 Janice Lee Guat Hoe MIA 0Loh Kok Leong MIA 2Ng Mi Li MICPA 1Stephen Oong MICPA 1 S.Ampalavanar MICPA 1David Siew Kah Toong MICPA 0Robert Tan Bun Poo MICPA 2David Tan Lye Chong MIA 0Wong Chee Leong MIA 0

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Malaysian Insurance Accounting Standards Working CommitteeNo.ofmeetings:0

Datuk Dr Abdul Samad Hj Alias (Chairman) (MICPA)Pushpanathan a/l S A Kanagarayar (MICPA)JessicaChewChengLan (BNM)Chia Kum Cheng (MICPA)Maggie Chong Sook Yin (LIAM)Choong Kooi Wah (MICPA)Ezamshah Ismail (LIAM)K.Komalavalli (BNM)Kang Hak Koon (PIAM)Lee Kok Wai (MICPA)Lee Lai Keong (PIAM)Lim Chong Beng (PIAM)Mohd Adib Ariffin (PIAM)Ng Kim Tuck (MICPA)Ng Yoke Ling (MICPA)Robert Tan Bun Poo (MICPA)Tee Choon Yew (PIAM)Tunku Yaacob Tunku Abdullah (LIAM)Yeo Took Keat (LIAM)

Public Sector Accounting Working GroupNo.ofmeetings:0Pushpanathana/lSAKanagarayar(Convenor)

Co-opted MembersAssoProfAzmibHarun Dato’MohammadAididbMohdShariff HjOthmanbinAbdullah Saadatul Nafisah bt Baslir Ahmad TanPohLing,ShirleyWuChihShan


1. To undertake research in contemporary accounting issues and where appropriate, publish the research findings in the formofaccountingresearchbulletins(ARB).

2. ToformulateauditingstandardsandotherauditingstatementsforapprovalbyCouncil.

3. ToprovideinterpretationsandguidancenotesonMASBstandardsintheformoftechnicalreleases(TR).

4. Toprovideguidelinesonandinterpretationofauditingstandardsandotherauditingstatements.

5. Toliaisewithinternationalbodiesoftheaccountancyprofessiononallmattersofatechnicalnature,concerningor affectingaccountingorauditing.

6. Toestablishandsuperviseworkingcommitteesformedtoproducerecommendationsonaccountingguidelinesand auditingstandardsandstatements.

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Administrative & Financial Affairs Committee No.ofmeetings:2 Attendance

Dato’NordinBaharuddin(Chairman) 1AbdulJabbarAbdulMajid 1(LOA-1)HoHengChuan 2LimKianThiam 1(LOA-1)


1. ToberesponsibleforthesmoothrunningoftheSecretariat.

2. To be responsible for the preparation of budgets and financial statements of the Institute.

3. To supervise the staff employed by the Institute.

4. ToorganisetheGeneralMeetings,CouncilMeetingsandAnnualDinner.

5. ToliaisewiththeTrusteesoftheMACPAEducationalTrustFundwithregardtothemaintenanceoftheBuildingandtheadministrationoftheFund.

Commerce & Industry Committee No.ofmeetings:1 Attendance

Dato’YeoHow(Chairman) 1ChinKwaiFatt 1DatinHjhFadzilahbteSaad 1HoHengChuan 0 TehCheeGhee 1DatukRobertYongKuenLoke 1

Co-opted MembersChaiLaiSim 0ChoOiKwan 0VincentSeow 1


1. To ensure that the interests and views of members in commerce and industry are properly reflected in the Institute’s policiesandactivities.

2. To develop, in conjunction with other committees of the Institute, such activities as are of interest to members in commerceandindustry,particularlyinrelationtocontinuingprofessionaleducationinmanagementaccountingand othertopics.

3. TodevelopmanagementaccountingandreportingguidelinesforrecommendationtoCouncil.

4. Toprovideaconsultativemediaformembersincommerceandindustry.

5. Toco-ordinateliaisonwithlocal,regionalandinternationalbodiesonallmattersconcerningmanagementaccounting andreporting.

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Disciplinary Committee No.ofmeetings:0 Attendance

DatukRobertYongKuenLoke(Chairman)AbdulJabbarAbdulMajid AhmadMustaphaGhazaliChinKwaiFattDato’HjMaidinSyedAli SukantaKumarDutt Dato’YeoHow


1. Onreceiptofaformalcomplaint,toinformthecomplaineeoftheCommittee’sintentiontoconsiderthecomplaint.2. TohearthecasereferredtotheCommittee.3. Uponfactsbeingproven,theCommitteeisempoweredtotakeappropriatedisciplinaryactionagainstthecomplaineewhich includeexclusionorsuspensionfrommembershipinthecaseofmembersandexclusionfromtherelevantregistersinthe case of provisional members and registered students, censure, reprimand, admonishment or payment of a fine.4. To give notice of its finding and decision to the complainee.5. To refer the complaint to the Council for a final decision if no unanimity is reached by the Committee.6. ToreportalldecisionstotheCouncilforrecording.

Education & Training Committee No.ofmeetings:1 Attendance

Dato’AbdulHalimMohyiddin(Chairman) 1DatinHjhFadzilahbteSaad 1LohLayChoon 1Pushpanathana/lSAKanagarayar 1TehCheeGhee 1DrVeerinderjeetSingh 1

Co-opted MembersProfHjAbdulManapSaid 0Dr Hafiz Majdi Ab. Rashid 0AssoProfDrArfahSalleh 1Datuk Prof Dr Daing Nasir Ibrahim 0Prof Dr Ibrahim Kamal Abdul Rahman 1MrsJoyceYap 1ProfDrJuhariSamidi 1ProfMadyaDrMahamadBinTayib 0AssoProfSusanThoLaiMooi 0 Prof Dr Takiah Mohd Iskandar 1


1. Toorganiseeducationandtrainingprogrammesforstudents.2. Toplanandadministercontinuingeducationprogrammesformembers.3. To liaise with institutions of higher learning and other local and overseas professional organisations in matters

pertainingtoeducationandtraining.4. To evaluate courses/qualifications referred to the Committee by the Membership Affairs Committee for the purpose of

student registration and/or exemption from the Institute’s examinations.5. To regularly review the Institute’s examination syllabus.6. Todevelopandmaintainalibrarytoprovidereferenceandresearchfacilitiesformembersandstudents.

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Examination CommitteeNo.ofmeetings:4 Attendance

AbdulJabbarAbdulMajid(Chairman) 3BehTokKoay(AlternateChairman) 2(LOA-2)ChinKwaiFatt 1KhorChinPeng 2LimKokBeng 2(LOA-1)PeterLimThiamKee 4MohamedRaslanAbdulRahman 2PoonYewHoe 3SukantaKumarDutt 3(LOA-1)TanGheeKiat 4


1. WithCouncil’sapproval,toissuefromtimetotime,regulationsforthe:-

a) conductoftheexaminations,and

b) eligibilityofstudentstositfortheexaminations.

2. Togivenoticeinwritingtoallstudentswhenentryforexaminationsisopen.

3. WithCouncil’sapproval,toappointandremunerateexaminersandmoderators.

4. TorecommendtoCouncilthefeestobechargedfortheexaminations.

5. Toappointandremunerateinvigilatorsateachexaminationcentre.

6. Toconsiderreportsofexaminersandmoderatorsanddeterminetheexaminationresults.

7. Tonotifystudentsoftheirperformanceattheexaminations.

8. To issue certificates to successful students at each examination.

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Financial Statements Review CommitteeNo.ofmeetings:8 Attendance

Pushpanathana/lSAKanagarayar(Chairman) 8KhorChinPeng 2LohLayChoon 2NgKimTuck 4(LOA-1)TanChinHock 6VenkatramananViswanathan 1

Co-opted MembersChoongMeiLing 4LeeKeenPong 3DavidSiewKahToong 5RobertTanBunPoo 3


1. To enhance the standards of the accountancy profession in Malaysia by assisting members to ensure that theirresponsibilities with regard to financial statements are discharged in compliance with statutory requirements and with the published recommendations and standards promulgated by the Institute from time to time, and with generally accepted accounting principles and auditing practices. This is to be done by a review of financial statements selected atrandombytheCommitteeorreferredbyapersontotheCommitteeandbydrawingtheattentionofthememberresponsiblefortheirpreparation,orforreportingonthem,toanyareasinwhichthepresentationorcontentappearstofallshortofsuchcompliance.

2. To respond appropriately to questions and problems submitted to the Institute by members who may have difficulty incomplyingwiththedirectivesofthisCommittee.

3. As and when appropriate, to refer special items of difficulty or interest to the Council.

4. Where the matter is justified to authorise a member of the Committee to make a complaint to the Investigation CommitteewhereintheopinionoftheFinancialStatementsReviewCommitteedisciplinaryactionshouldbetakenagainst a member or members of the Institute arising out of the work undertaken by the Financial Statements Review Committeewithinitstermsofreference.

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Government Affairs CommitteeNo.ofmeetings:3 Attendance

Dato’AhmadJohanMohammadRaslan(Chairman) 3Dato’AbdulHalimMohyiddin 2DatukDrAbdulSamadHjAlias 1AhmadMustaphaGhazali 1LimTianHuat 1(LOA-1)Dato’HjMaidinSyedAli 0KenPushpanathan 1


1. TocoordinateliaisonwiththeGovernmentonpoliciesoranyothermatterspertainingtoaccountingandtheprofession.

2. ToestablishandsuperviseliaisoncommitteeswiththeGovernment,itsMinistriesoragenciesinrelationtoCorporateLaw.

3. Tocoordinatereviewsoflegislationordraftlegislationasandwhenappropriate.

Insolvency Practice Committee No.ofmeetings:3 Attendance

LimTianHuat(Chairman) 3LimKokBeng 0TanChinHock 2

Co-opted MembersAdamPrimusVarghesebAbdullah 1ChuaSeeHua 2GanAhTee 3GopalSundaram 3JamhirahbteAli 0KhairudinbRosli 0LimSanPeen 3MakKumChoon 2NgChihKaye 3NgPyakYeow 3NitinNadkarni 0Saidatul Ishan bte Abd Rahman 1SSuhendran 0WongCheeLin 3YapWaiFun 1


1. To consider practical problems faced by members relating to receivership or liquidation and make appropriaterecommendationstotherelevantauthorities.

2. Toreviewandclarifyanyanomalyinlaworregulationsaffectinginsolvencypracticeandtoliaisewiththerelevantauthorities.

3. Toprepareguidancenotesonvariousaspectsofinsolvencypractice.

4. Tocoordinateliaisonwithlocal,regionalandinternationalbodiesonallmattersconcerninginsolvencypractice.

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Investigation CommitteeNo.ofmeetings:2 Attendance

HoHengChuan(Chairman) 1LimKokBeng(AlternateChairman) 2Dato’AhmadJohanMohammadRaslan 1(LOA-1)AhmadMustaphaGhazali 1DatinHjhFadzilahbteSaad 2MohamedRaslanAbdulRahman 1(LOA-1)DrVeerinderjeetSingh 2


1. Toconsideranyfactsorcomplaintslaidbeforeitindicatingthatamember,provisionalmemberorregisteredstudentof the Institute has become liable to disciplinary action.

2. WheretheCommitteeisoftheopinionthataprimafaciecasehasbeenmadeout,itshallmakeaformalcomplainttotheDisciplinaryCommittee.

3. TorequestamembertosupporttheformalcomplaintduringahearingbeforetheDisciplinaryCommittee.

4. TorequestamembertosupportthedecisionoftheDisciplinaryCommitteeduringahearingbeforetheAppealCommittee.

Membership Affairs CommitteeNo.ofmeetings:5 Attendance

TanGheeKiat(Chairman) 5DatinHjhFadzilahbteSaad 4KhorChinPeng 1Dato’HjMaidinSyedAli 2TehCheeGhee 4LimTianHuat 0NgKimTuck 1


1. Toconsiderapplicationsformembership.

2. To consider applications for practising certificates.

3. Toconsiderenquiriesofmemberspertainingtomembership.

4. Toconsiderapplicationsfromstudentsforregistrationandexemptionfromexaminations.

5. To recommend to Council fees to be charged for membership and issue of practising certificates.

6. ToprepareguidancenotesonvariousaspectsoftheCodeofProfessionalConductandEthics.

7. Toprovidecounselingservicestomembersonprofessionalconductandethics(inaccordancewiththeaboveCode)and other professional matters where possible, but so as not to infringe on matters within the purview of otherCommittees.

8. TopromotetheprofessiontothepublicinliaisonwithotherrelevantCommittees.

9. TodealwithcorrespondencefrommembersandpublicwherethesubjectmatterdoesnotfallwithintheambitofotherCommittees.

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Public Affairs CommitteeNo.ofmeetings:2 Attendance

LimKianThiam(Chairman) 2DatukRobertYongKuenLoke(Co-Chairman) 1HoHengChuan 1LohLayChoon 0Dato’HjMaidinSyedAli 0Dato’NordinBaharuddin 2SamSohSiongHoon 1TanChinHock 2

Co-opted MembersChiaKumCheng 1EstherTanChoonHwa 1


1. To organise programmes to enhance and project the image of the Institute and the profession.

2. To coordinate and organise all public relations activities of the Institute.

3. Todevelopandmaintaincontactswiththemedia.

4. To foster better understanding, relationship and co-operation between the Institute, the Government and the financial andbusinesscommunities.

5. To be responsible for publication of promotional materials, including the Institute’s journal and press releases.

6. To plan and organise the Institute’s annual and regional conferences hosted by the Institute, and joint conferences with otherprofessionalbodies.

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Public Practice CommitteeNo.ofmeetings:5 Attendance

SamSohSiongHoon(Chairman) 5LimKokBeng 1PeterLimThiamKee 2MohamedRaslanAbdulRahman 2PoonYewHoe 2TanChinHock 3VenkatramananViswanathan 1

Co-opted MembersAbuBakarRajudin 2AhmadShahrulHjMohamad 2HengJiKeng 2(LOA-1)KennethLeeWaiTong 0Dato’RaymondLiew 2MohdNoorAbuBakar 5NgPyakYeow 4DavidSiewKahToong 4TongSiewChoo 5GaryYongYoonShing 1


1. Toidentifytheprofessionaldevelopmentneedsofsmallerpractices.

2. Topromotetheprofessionalstandingofmembersinpractice.

3. Toassistmembersinpracticemanagement.

4. Toprovideaforumforinteractionandconsultationformembersinpractice.

5. Toformulateandprovidetrainingcoursesforstaffofsmallerpractices.

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Tax Practice CommitteeNo.ofmeetings:3 Attendance

BehTokKoay(Chairman) 3PeterLimThiamKee 0PoonYewHoe 1SamSohSiongHoon 0DrVeerinderjeetSingh 3

Co-opted MembersLeeVoonSiong 2LimPohChin 1MJMonteiro 2NgKimLian 2OngLaySeong 3PhoonSowCheng 2SooHukKheong 0TangChinFook 0RobertTeoKengTuan 1TongSiewChoo 3


1. To serve as key liaison between the Institute and Government on taxation matters.

2. ToparticipateinGovernment’sconsultationprocessonthedevelopment,revisionandimplementationoftaxlegislationandregulations.

3. Toconsiderpracticalproblemsfacedbymembersrelatingtotheapplicationoftaxlegislationandcompliancewiththe regulations of the Inland Revenue Board.

4. To be responsible for the Institute’s publications on taxation and related matters.

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PRESIDENT’S

STATEMENT

Dato’ Abdul Halim Mohyiddin

I am pleased to present my second annual report since my appointment as President of the Institute.

The environment in which we operate has become increasingly competitive, and this is one of the major challenges facing the Institute. At the same time, we need to address the challenges arising from market, economic and regulatory developments. We need to integrate the impact of these challenges into our work programme and in the delivery of services to members to support their professional work.

These are our key focus when we develop our Strategic Plan for 2006 – 2008. They are translated into the following strategic themes:

• To provide a widely recognised and respected professional business qualification and to ensure continued membership growth;

• To develop and promote high professional and ethical standards that commend public confidence;

• To provide effective professional support to members to enable them to deliver services with technical excellence;

• To serve as a thought leader for the business community.

Our main area of competition is student education. Today, students are given multiple choice of accounting qualifications; differentiation is therefore essential for future growth. Although the CPA designation is widely recognised as the premier professional business qualification, there is a need to protect and build our brand in order to ensure continued growth in our student intake and membership.

As highlighted in last year’s report, the Institute has appointed a brand consultant to design and implement a brand development programme to reposition MICPA and to enhance the identity and awareness of the CPA designation. Towards this end, a brand assessment, through focus group discussions with key stakeholders, was conducted. The results indicated that the Institute and the CPA designation were well recognised for quality and technical excellence, but only among the larger corporations which were the major clients or employers of CPAs – a phenomenon of “insider popularity”. There was unanimous agreement among the participants that the Institute should be more visible and proactive in promoting the accountancy profession and the CPA brand.

The Institute has set out a long term brand building programme, to enhance the profile of MICPA as a leading body of the profession and position the CPA as “Number

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1 Business Professional”. Several initiatives have been undertaken towards this end.

In June 2005, a new corporate logo was launched. The modern graphic and solid Gill Sans font reflects a new genre of business professionals who are objective, innovative and ready to embrace change. The solid maroon line anchors the intellectual foundation of the CPA professional.

A branding campaign has been initiated, targeting at student, business and the public. For a start, advertising campaigns in newspapers and magazines targeted at students audiences have been undertaken on a modest scale due to budget constraints. New marketing materials including publicity brochure and display panels have been produced for use in public events. With anticipated increase in resources, the Institute will be embarking on a more aggressive advertising campaign and media outreach in the coming year, including media interviews, publication of articles in major newspapers, and providing thought leadership on relevant business issues.

Communicating the value of the CPA qualification to the next generation of accountants forms a core part of our day-to-day activities. With the assistance of the Young CPA Group, the Institute conducts scheduled career talks at schools and institutions of higher education, and participates in career exhibitions across the country.

The Council is conscious that in the light of an increasingly international and competitive marketplace, there is an urgent need to build CPA Malaysia as a global brand. The Institute continues to take proactive steps towards seeking mutual recognition arrangements with the more established professional bodies. As I have highlighted in last year’s report, the Institute has appointed an education consultant to undertake an independent review of the CPA qualification with the aim of achieving recognition by the Chartered Accountants Group (CAG) comprising the Institutes of Chartered Accountants in the U.K., Australia, Canada and New Zealand. The review has been completed and the Institute is taking steps to improve the CPA qualification process as recommended by the consultant. However, submission of the MICPA qualification to the CAG bodies for the recognition has been put on hold as the CAG bodies are in the process of working out joint arrangements for processing applications for reciprocity and mutual recognition, which are anticipated to be finalised by end of the year.

As a professional body, it is our responsibility to ensure that new entrants to the profession are not only equipped with the technical knowledge and skills but also possess a high-level of ethical and professional values. Instilling these qualities and values in our future membership is crucial to maintaining the accountancy profession’s central role in business and in contributing to the country’s economic development and stability.

We meet this responsibility by continually reviewing and improving the CPA programme and the way we prepare prospective members for admission to the profession. In 2002/2003, we introduced a new CPA programme and a new assessment approach for the Advanced Stage Examination. The new curriculum builds on the profession’s traditional strengths while focusing on the needs of business. The new assessment approach, which is based on a combination of interactive workshops, written examinations and case studies, aims to equip potential CPAs not only with technical knowledge but also the skills of analysis, problem solving and the ability to exercise judgement in a business context.

During the year, taking cognisance of the substantial change in the business environment, the Institute undertook a review of the Advanced Stage Examination. Apart from updating the examination syllabus and education programme to take into consideration new accounting, financial reporting and auditing standards and changes in the regulatory framework, the Advanced Stage Examination has been restructured into four modules from the current three modules. The existing Module D, which covers accounting, financial reporting and auditing, is split into two separate modules as the syllabus has become increasingly challenging resulting from the changes in international accounting and auditing standards. The new Module D will focus on advanced topics on accounting and financial reporting and Module E on auditing and assurance. The new examination structure will take effect from the November 2006 examination.

In tandem with the restructuring of the examinations, the Council proposes to introduce a new qualification, which carries the designation Certified Financial Accountant (CFiA). It is intended as an alternative professional qualification for persons who wish to build a career in the business or public sector.

The Certified Financial Accountant (CFiA) designation will be awarded to persons who possess a recognised degree in accountancy who have passed Modules C and D of the Advanced Stage Examination and obtained the relevant practical experience. The CFiA qualification will equip the accounting graduates with the knowledge and competencies expected of a professional accountant in business. They will be well qualified to build a career in accounting, finance and management in both the business and public sectors.

The Institute intends to promote the CFiA qualification to accounting students at both public and private universities. It should serve as an incentive to the universities to offer Modules C and D of the Advanced Stage Examination as external professional courses to students in the final year programme of the Bachelor of Accountancy degree. Currently, students who have completed Modules C and

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D of the Advanced Stage Examination will be awarded a Professional Certificate in Accountancy (PCA) and they are eligible to become an associate member of the Institute. However, they are not entitled to any professional designation. The CFiA will assist these accounting graduates achieve a professional qualification that meets the benchmarks set by the International Federation of Accountants (IFAC), which will enhance their employability in the market.

A CFiA will have the same rights of membership as a member with the CPA status, with the exception of the right to vote at general meetings of the Institute and the right to carry out any duty reserved to CPAs. They will be entitled to access the full range of services provided by the Institute to members. The Council believes that the introduction of the CFiA qualification will help to expand and strengthen the Institute’s membership base.

The proposal will require appropriate amendments to the Institute’s Articles of Association and bye-laws to provide for the admission of members who are entitled to use the designation Certified Financial Accountant (CFiA) and their rights of membership. The proposed amendments will be submitted for members’ consideration at an extraordinary general meeting to be held on June 24, 2006, immediately after the Institute’s 48th Annual General Meeting.

There is no doubt that the accountancy profession plays a key role in protecting the public good, in encouraging corporate transparency, and in achieving economic growth and stability. Each CPA contributes to this role by serving his clients, employer and the community with the highest ethical and technical standards. It is a core function of the Institute to provide members with the guidance and support they need to perform their work with utmost competence and integrity.

A key focus of the Institute’s technical work is to maintain convergence with international accounting, auditing and ethical standards. The Institute provides technical updates and guidance to assist members implement new standards, guidelines and regulatory requirements.

The Institute undertakes the review of all standards and practice guides issued by the International Auditing and Assurance Standards Board (IAASB) of IFAC to determine whether there is any inconsistency with statutory reporting requirements. The standards undergo a formal due process before they are adopted as approved auditing standards for compliance by members. This work is now undertaken in co-operation with MIA, through a joint working group, to ensure consistency in the standards adopted by the two bodies. To date, the Institute has adopted almost all the standards issued by IAASB.

The Institute also takes part in the standard setting process of the Malaysian Accounting Standards Board (MASB). The Institute provides the collective views of members on exposure drafts and discussion documents issued by the MASB during the consultative process, and makes representations on interpretation issues. The Institute also monitors members’ compliance with MASB Standards and provide guidance on the application where necessary.

The MASB adopts the policy of full convergence with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). During the year, the MASB issued a total of 21 new/revised Financial Reporting Standards, which are based on IFRS/IAS. The Institute conducted a series of workshops and seminars to assist members understand the requirements of the new/revised standards and to address application issues.

The Institute also made a submission to the MASB to express the need for simplification of accounting standards for small and medium sized entities (SMEs). The Institute highlighted that much of the complex measurement and disclosure requirements within the new/revised FRS are not relevant for decision by the users of SME financial statements, which means the cost of compliance exceeds benefits. The MASB responded positively to the Institute’s proposal. FRS are now optional for private companies. Such companies are to comply with Private Entity Reporting Standards (PERS), which are essentially MASB Standards issued prior to January 1, 2005. Meanwhile, the MASB has embarked on a more comprehensive review of the reporting needs of private entities in line with the initiative undertaken by the IASB for accounting for SMEs.

The practice of the profession is affected by various Government regulations and legislation. The Institute maintains an effective consultative relationship with Government and the regulatory authorities to enable us to represent the views of members and the community at large during the development stage of new policies and legislation. We take a proactive stance on issues affecting members, the profession or business. It is pleasing to note that many of the proposals submitted by the Institute have been adopted by Government and the regulatory authorities.

The profession’s success rests on its reputation for integrity, competence and objectivity. The Institute demands members’ compliance with the Code of Professional Conduct and Ethics to ensure that members uphold these hallmarks in all their professional work. The Institute has revamped the Code using IFAC’s revised Code of Ethics for Professional Accountants (issued in June 2005) as the basis. The Code sets out the fundamental principles

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Membership Statistics as at December 31, 2005

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of professional ethics for professional accountants and provides a conceptual framework for applying those principles. The proposed new Code has been approved by the Council, which will be issued as an exposure draft for consultation.

Apart from our internal work, the Institute continues to play an active role in the international accounting organisations. Currently, three of our Council members are serving on the IFAC Board and the International Auditing and Assurance Standards Board. We have also contributed to the work of the International Accounting Education Standards Board and the Developing Nations Committee.

As the Institute delivers our strategy for 2006 – 2008, our biggest challenge is to achieve the targeted growth in membership and student enrolment. Promoting the Institute and the CPA brand is key to achieving this strategic goal and the future success of the Institute. At the same time, we will maintain a parallel agenda on providing support to members professionally and technically to meet the market demand for quality service. I believe with the support of members, the Institute will rise to the challenges in the year ahead.

Finance

The Institute experienced a deficit of RM97,200 compared to a surplus of RM161,200 in 2004.

Total income increased by RM161,400 or 5%. This was due to the increase in fee income from student sources by RM59,600 or 18% as a result of an increase in student enrolment. Other activities including CPE, examination workshops and sale of publications also contributed to the rise in total income.

Total expenses increased by RM423,500 or 15% due mainly to two major initiatives undertaken during the year and the increased cost associated with other activities. A professional fee of RM161,700 was incurred in connection with the review of the MICPA qualification by an education

consultant with the aim of achieving recognition by the Chartered Accountants Group, and RM51,500 was incurred in relation to the brand development programme. The cost associated with other activities increased by RM94,800 as a result of a higher volume of activities.

Total assets decreased by RM242,300 or 17%, due mainly to the decrease in fixed deposits and bank balances by RM86,900 and amortization of the development cost of study manuals amounting to RM123,900. Total liability reduced by RM145,100 or 9% resulting mainly from the repayment of the term loan, which was obtained to finance the development cost of study manuals. The Institute has an accumulated deficit of RM206,600 as at December 31, 2005 compared to RM109,400 in the previous years.

A revision of the fees payable by members and students was approved by members at the general meeting held on June 25, 2005. With the new fee structure, which will take effect from the financial year 2006, the Council is planning for a positive financial outcome to enable us to rebuild the Institute’s reserves. The Council also continues to undertake fund raising activities to increase the Institute’s financial resources in order to enable us to invest in the key initiatives set out in the Strategic Plan.

Membership

During the year, a total of 73 new members were admitted. After taking into account members who resigned or were excluded from membership for failure to pay the annual subscriptions/practicing certificate fees, a net increase of 48 members or 2% was recorded.

Of the new admissions, 68 members were admitted from the register of students, having completed the Institute’s examinations and fulfilled the prescribed practical experience requirements. The other new members were admitted on the basis of their professional accountancy qualifications, which are recognised by the Institute. This category of members are required to either pass the

Launch of the CPA brand by YB Tan Sri Nor Mohamed Yakcop, Minister of Finance II

YBhg Tan Sri Lim Leong Seng receiving Anugerah Presiden 2005 from YB Tan Sri Nor Mohamed Yakcop, Minister of Finance II

YBhg Dato’ Abdul Halim Mohyiddin, MICPA President and Ms Tan Shook Kheng listening to matters brought by members at AGM

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Institute’s Admitting Examination, which consists of two papers focusing on taxation law and the regulatory and financial reporting framework of Malaysia, or demonstrate their knowledge at an interview and supported by evidence of relevant work experience in Malaysia.

There has been no significant change in the membership profile. As at December 31, 2005, 47% of the members worked in the public practice firms, of whom 13% were members holding practising certificates. A total of 46% of the members were employed in business and 2% in education and the public sector. Retired members accounted for 5% of the total membership.

During the year, a total of 45 female members were admitted, constituting 62% of the total new admissions. This represented a significant gender shift in the new admissions. However, the overall proportion of female members has only increased by 1% to 34% at the close of 2005.

Services to Members

The membership of MICPA is involved in diverse areas of work. Almost 50% of our members work in all sectors of industry and commerce. The other half of the membership is involved in practices which vary enormously in size and resources, providing a wide range of services including auditing and assurance work, tax advisory services, insolvency administration, strategic and business management and financial planning. A challenge for the Institute is to provide services and support that meet the differing needs of the different segments of membership.

The overriding goal is to ensure that members maintain high professional standards and technical competence in the performance of their work and services. The Institute provides technical updates and guidance on all aspects of CPAs’ work. Continuing professional education (CPE) courses on a broad range of topics are offered to meet the diversified needs of members. The Institute monitors developments in laws and regulations that affect CPAs’ work and makes representations to Government and the regulatory authorities.

The Institute maintains a network of Committees to help identify and deliver services that meet the professional development needs of specific groups. Our Technical Reference Panel provides free advisory services on technical, ethical and practice management matters. We have developed an Audit Guide for Practitioners to assist our practising members, especially those in small and medium sized practices, maintain quality control in audit work.

The Institute continues to improve the communication process with members through the use of the Internet. The MICPA website is constantly being enhanced to improve its service functionality and interactivity. We now send e-circulars to members and students. The Members’ Handbook and other technical publications are accessible from the MICPA website. Members and students have secure access to the registers to update their personal particulars. Registration for examinations, CPE courses and other events can be made on-line. An e-library is also available on the website.

Continuing Professional Education

The Institute delivers CPE courses throughout the year to assist members keep abreast of change. Some of the change was the result of external forces such as economic and legislative reforms. Others were the result of the profession’s initiatives to improve the quality of financial information, to enhance the quality of our work, and to better serve public interest.

The wide range of topics covered by the CPE programmes are intended to meet the needs of different segments of the membership. In the light of the implementation of a large number of new/revised Financial Reporting Standards (FRS) during the year, a series of seminars and workshops were organised to assist members understand the requirements of the FRS and the application issues. Apart from our own programmes, we joined forces with the Malaysian Institute of Accountants (MIA) and three other professional bodies to conduct a series of FRS Awareness Seminar across the country. We also held forums and seminars in specialist areas such as real estate investment trusts, insurance business, property development and insolvency administration. For the benefit of members involved in taxation services, a series of workshops on tax audit and application of the public rulings of the Director General of Inland Revenue were conducted.

A two-day MICPA Business Forum was held in September 2005, featuring the theme “Broadening Business Horizons: Malaysia and Beyond”. YB Dato’ Dr Ng Yen Yen, Deputy Minister of Finance I, delivered the opening keynote address. A panel comprising prominent corporate leaders, senior Government officers, bankers, business

MEMBERSHIP STATISTICS

As at December 31 Net 2005 2004 Increase

In Practice 417 421 (4) Not in Practice 2,665 2,613 52

Total 3,082 3,034 52

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advisors and tax consultants led discussions on a number of topical issues relating to the challenges and strategies for driving business growth in the face of global competition and trade liberation.

The Institute, jointly with the MIA, organised a Forum on International Education Standards for Professional Accountants to deliberate on three key areas in accounting education – competence requirements for audit professionals, ethics education and assessment methods. The Forum was addressed by a panel comprising Mr Henry Saville, Chairman of the International Accounting Education Standards Board (IAESB), Mr David Hunt, a member of IAESB, leading academicians and representatives from training organisations. YBhg Dato’ Prof Dr Hassan Said, a Director General of the Ministry of Higher Education, delivered a keynote address at the opening of the Forum.

Members are encouraged to make a commitment to CPE and to attain a minimum of 40 hours of CPE a year. Currently, attainment of the prescribed quantum of CPE is not a mandatory requirement for continuing membership. The Council has decided to adopt IES 7, which prescribes that member bodies of IFAC should implement mandatory CPE requirements to ensure that all professional accountants, regardless of the sector and size of business in which they operate, develop and maintain competence relevant and appropriate to their work and responsibilities. With effect from January 1, 2007, it will be mandatory for members to complete at least 120 hours of CPE in each rolling cycle of three years, of which 60 hours should be verifiable structured learning activities.

Public Practice

The Public Practice Committee is responsible for identifying and organising activities that will support and promote the interests of members in practice. It also serves as a forum for consultation and discussion, especially among smaller practitioners, on technical and practice management issues.

The project on the development of an audit practice guide has come to fruition. Started in 2002, the draft document underwent several revisions to improve on its content and to incorporate the requirements of new International Standards on Auditing. The practice guide is designed to assist members maintain quality control for audit work. It covers the development of an audit plan, audit programme and audit management. It also contains sample working papers, internal control questionnaire and checklists on disclosure requirements. The practice guide is expected to be ready for publication in June 2006.

The Committee continues to organise regular informal gatherings of members to provide a venue for networking and exchange of information. Such gatherings are normally held in conjunction with an evening talk or forum on a topical issue to provide a focal point for discussion. To assist members gain a deeper understanding of the objectives, procedures and key implementation issues relating to MIA’s practice review process, a Forum cum hi-tea was organised to discuss the subject. A representative from MIA’s Practice Review Committee was invited to address the Forum.

The Committee did not manage to hold a Practitioners Forum in 2005 due to uncontrollable factors. A Practitioners Forum has been scheduled for September 2006, to be held in Beijing, China.

The Committee continues to promote the advisory service provided by the Technical Reference Panel. There has been an increase in the number of enquiries received during the year, relating mainly to the application of the new Financial Reporting Standards issued by the MASB.

Commerce and Industry

The Commerce and Industry Committee continues to focus its attention on identifying the CPE needs of members in business and to recommend areas of interest to the Education & Training Committee for CPE activities to be organised. The Committee also undertakes to oganise evening talks on a quarterly basis to keep members up-to-date with current issues and to serve as a platform for the exchange of views and experiences.

The Committee organised an evening talk on real estate investment trusts (REITs) to assist members gain an understanding of the structure and benefits of REITs, the IPO process for REITs and the Securities Commission’s Guidelines on REITs. The event attracted a fair amount of interest from members as REITs is a relatively new investment vehicle in Malaysia.

The Committee also assisted in the organisation of the MICPA Business Forum 2005. As the Forum was targeted at company directors and senior executives, the Committee was able to provide useful input on the selection of topics and panel members.

In recognition that almost 50% of our members are in business, many of whom holding company directorship and top executive positions, the Committee plans to establish a Corporate Governance Interest Group. The objective is to promote good corporate governance practices and to provide a forum for discussion and exchange of views on corporate governance issues.

The Committee continues to undertake the review of winning articles published by the Professional Accountants in Business (PAIB) Committee of IFAC, resulting from

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an annual competition held by PAIB under the Articles of Merit Award for Distinguished Contribution to Management Accounting. These articles cover topics such as risk management, corporate social responsibility and performance measurement for sustainability. The Committee will recommend the article for publication in The Malaysian Accountant where it is deemed appropriate.

Government Relations

The Institute maintains an effective consultative relationship with Government and the regulatory authorities. This is particularly important at a time when major legislative reforms are taking place in areas relating to governance of companies, operation of the capital market and the income tax system.

During the year, the Institute participated actively in the consultation process and made submissions on proposed amendments to laws and regulations to Government and the relevant regulatory authorities. These included proposed reforms of company law and taxation law, new policies and guidelines issued by the Securities Commission, and proposed changes to the listing rules of Bursa Malaysia. We presented the profession’s views on the proposed amendments, highlighted any unintended consequences on the profession or business, and suggested practical solutions.

The Institute continues to participate actively in dialogue sessions held by Government with the private sector. These include the pre-budget dialogue with the Ministry of Finance, the annual dialogue with the Ministry of Domestic Trade and Consumer Affairs, the Companies Commission of Malaysia annual dialogue, and half yearly meetings of the Customs – Private Sector Consultative Panel. Numerous technical level meetings were also held with the Inland Revenue Board, the Securities Commission and Bursa Malaysia to discuss practical issues relating to their existing rules and regulations or those arising from legislative changes.

The Institute has been supporting the Capital Market Graduate Training Scheme since its implementation by the Securities Commission in 2003. The programme aims to enhance human resources for the Malaysian capital market. It involves one month of intensive courses conducted by the Securities Commission and eleven months of on-the-job training in participating organisations. The Institute helps to place part of the trainees in CPA firms for practical training.

Technical Activities

The Institute undertakes a wide range of technical activities to support members in the performance of their professional work.

Standard setting is a key component of the Institute’s work programme. Standards are necessary to assist members discharge their professional duties with regard to financial reporting competently. More importantly, standards are necessary to ensure the quality, consistency and transparency of financial information, which is used as a basis for making investment decisions.

In the area of auditing standards, the Institute adopts the approach of convergence with the standards issued by the International Auditing and Assurance Standards Board (IAASB) of IFAC. We undertake constant review of International Standards on Auditing, Assurance Engagements and Related Services and adopt the standards for compliance by members through a due process. We also provide guidance to members on the discharge of their reporting responsibilities under the various laws and regulations.

The Institute continues to participate actively in the standard-setting process of MASB. The Institute serves on a number of MASB’s project working groups and its Issues Committee. The Institute provides feedback on proposed new standards and discussion documents during the consultation process and makes representations to MASB on interpretation issues. MASB Standards are

YBhg Dato’ Abdul Halim Mohyiddin and YB Tan Sri Nor Mohamed Yakcop having a chat during the 47th MICPA Annual Dinner

YB Dato’ Dr Ng Yen Yen, Deputy Minister of Finance I, accompanied by MICPA Council Members to the official opening of the MICPA Business Forum 2005

Participants at the MICPA Business Forum 2005

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issued to members for compliance as soon as they are published by MASB.

Many of our members are engaged in specialist areas of practice including taxation, insolvency and corporate advisory services. The Institute monitors changes to legislation and regulations affecting members’ work in these areas. Technical updates and guidance are issued promptly to assist members carry out their work effectively.

The Institute works in close co-operation with MIA in carrying out its technical activities. A Joint Working Group on Auditing (JWGA) is established to undertake the review of new International Standards on Auditing (ISAs) and other pronouncements issued by IAASB, and make recommendations to the Councils of MIA and MICPA on their adoption or otherwise. The JWGA also undertakes the review of exposure drafts and consultation documents issued by IAASB and submits its responses to IAASB. A Joint Working Group on Securities Guidelines is also formed to ensure that the two Institutes adopt a consistent approach in making representations to the capital market regulators and in providing technical guidance to members.

Accounting and Auditing Standards

The Accounting & Auditing Technical Committee (AATC) has overall responsibility for the development and review of accounting, auditing and reporting standards and guidelines. The Committee is supported by the Joint Working Group on Auditing (JWGA), three specialist working groups and ad hoc task forces appointed to undertake specific projects.

During the year, the JWGA reviewed a number of new / revised ISAs issued by IAASB and submitted its comments to IAASB.

Based on the recommendation of the JWGA, the Institute has issued the following IAASB pronouncements during the year as MICPA exposure draft for comment:

(i) ED ISA 300 Planning an Audit of Financial (Revised) Statements

(ii) ED ISA 545 Auditing Fair Value Measurements and Disclosures

(iii) ED ISAE 3000 Assurance Engagements Other Than (Revised) Audits or Reviews of Historical Financial information

(iv) ED IAPS 1004 The Relationship Between Banking Supervisors and Banks’ External Auditors

(v) ED IAPS 1012 Auditing Derivative Financial Instruments

The Council, upon the expiration of the exposure period, has approved ISA 300 (Revised), ISA 545 and ISAE 3000 as approved auditing and assurance standards.

The Joint Working Group on Securities Guidelines (JWGSG) has had another busy year. It made several submissions and representations to the Securities Commission (SC) on proposed amendments to the Prospectus Guidelines and the Securities Industry Act, 1983.

The JWGSG is in the midst of finalising the guidance on the preparation of pro forma financial information for purposes of submission of corporate proposals to the SC. The guidance is expected to be ready for publication by the third quarter of 2006. The JWGSG also undertakes to develop guidance for reporting accountants to assist them in the discharge of their duties in relation to expressing opinion on such information.

A recent amendment to section 49(1) of the Securities Industry Act 1983 (SIA) relating to the auditor’s report for a fund manager and dealer gave rise to an issue of concern. This is a situation where the statutory financial reporting requirements are inconsistent with auditing and assurance standards.

The Institute, jointly with MIA, have made representations to the SC regarding the matter. Pending the resolution of the matter with the SC, the Institute has advised members to comply with the relevant auditing and assurance standards in the performance of their reporting function.

The following projects of the JWGSG are on-going:

• Development of guidance on auditors’ duty to report breaches of securities laws and rules of the exchange to the relevant authorities (whistle blowing role) under the SIA.

• Development of guidance on the reporting accountants’ responsibilities relating to their participation in the due diligence working group in connection with the submission of corporate proposals to the SC.

During the year, the MASB issued 21 new / revised Financial Reporting Standards (FRS), which are based on IFRS/IAS. The standards shall apply to annual periods beginning on or after January 1, 2006 except for the following:

• FRS 117, Leases and FRS 124, Related Party Disclosures, which shall apply to annual periods beginning on or after October 1, 2006.

• FRS 139, Financial Instruments: Recognition and Measurement, which effective date has not been determined.

The Institute has issued a circular to inform members of the implementation of the FRS and facilitated in the purchase of the standards by members.

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The Institute has made a submission to MASB that small and medium-sized entities (SMEs) would encounter great difficulty in complying with the requirements of the new/revised FRS. In addition, much of the complex measurement and disclosure requirements within the new/revised FRS are not relevant for decision making by users of SME financial statements, which means the cost of compliance far exceeds benefits. The Institute also highlighted that the need for simplification of accounting standards for SME is recognised by both the International Accounting Standards Board (IASB) and IFAC, and that the IASB is in the midst of developing accounting standards for SMEs, which are expected to be issued in 2007. The Institute proposed that MASB defer the implementation of the new/revised FRS on SMEs pending the issuance of SME accounting standards by the IASB.

The Institute’s proposal was accepted by the MASB, which decided that FRS are optional for private companies. Such companies are to comply with Private Entity Reporting Standards (PERS), which are essentially MASB Standards issued prior to January 1, 2005. Meanwhile, MASB has embarked on a more comprehensive review of the reporting needs of private entities in line with the initiative undertaken by the IASB on accounting for SMEs.

The MASB has also issued exposure drafts of two proposed MASB Standards and three IC Interpretations for consultation. The AATC has assigned a number of working groups to undertake a review of the exposure drafts and to provide comments to MASB.

At the international level, the Institute contributes to the work of IAASB. Mr Sukanta Dutt is a member of IAASB and heads two of the task forces, one to review ISA 800, The Independent Auditor’s Report on Special Purpose Audit Engagements and the other to develop the proposed ISA 701, The Independent Auditor’s Report on Special Purpose Financial Statements. He also serves on the task to review ISA 620, Using the Work of an Expert.

Company and Securities Law

The Company Law Reform Committee (CLRC), established by the Companies Commission of Malaysia (CCM) to undertake a fundamental review of Malaysia’s corporate law, has issued three consultative documents for public comment. The consultation papers set out proposed reforms to the Companies Act 1965 relating to the capital maintenance rules, the shareholder engagement process and company liquidation. The Institute, jointly with MIA, have undertaken a review of the consultation papers and submitted our comments and proposals to the CLRC

The CCM has also established a Corporate Law Consultative Forum with the aim to providing a platform for professional bodies to provide feedback, views and proposals on the practices, regulations and programmes implemented by CCM pursuant to the Companies Act 1965. The Forum comprises seven professional bodies, including the Institute. We had submitted a list of practical issues and proposals relating to the Companies Act 1965 for discussion by the Forum, which held its inaugural meeting in October 2005.

The Securities Commission (SC) continues to implement development initiatives towards achieving the Capital Market Masterplan’s vision of making Malaysia an internationally competitive market centre. Amendments were made to the SC’s policies and guidelines to create a more facilitative regulatory environment while encouraging the introduction of new products. The Institute maintains an on-going consultative relationship with SC to discuss practical issues relating to the existing regulations and to provide feedback on proposed changes.

Insolvency

The Insolvency Practice Committee consists of representatives from all interest groups including our members in practice, the Bar Council, the Association of

10th MICPA Accountancy Week - Organising Committee for Sports and Games (UM)

YABhg Tun Dr Mahathir Mohamad, Fourth Prime Minister of Malaysia delivering the 47th Anniversary Commemorative Lecture

Winner of the 2005 Most Outstanding CPA Student Award, Ms Kimberley Chong Ling Ling from Ernst & Young

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Banks Malaysia, Bank Negara Malaysia, the Companies Commission of Malaysia and the Insolvency Department Malaysia. The Committee serves as a useful forum for the discussion of practical issues arising from insolvency management and administration.

The Committee held an Insolvency Interest Forum to discuss the benefits of selling non-performing loan (NPL) portfolios, the process involved and the legal and tax implications. The Forum was addressed by a panel comprising an expert in NPL portfolio sales, insolvency practitioner, lawyer, tax consultant and a representative from Danaharta Nasional Berhad, the national asset management company. It attracted interest from a wide cross section of professionals including bankers, lawyers, liquidators and auditors.

The Committee has undertaken a review of the Consultative Document on Company Liquidation issued by the Corporate Law Reform Committee (CLRC). The Committee’s comments would be submitted to the CLRC in due course.

The Committee is in the process of developing Insolvency Guidance Notes on a number of practical issues arising from the application of the Companies Act 1965 including the eligibility of auditors to act as a liquidator of audit clients; effective date of cessation of the office of liquidator; and vacation of the office of liquidator due to death.

The Committee, as a special interest group, continues to be a member of INSOL International, an international organisation of insolvency professionals. The affiliation provides opportunities for members engaged in insolvency practice to keep up-to-date with the global changes and developments in insolvency law and practices. The INSOL journal serves as a useful source of reference on significant insolvency issues and developments.

Taxation

The Tax Practice Committee is responsible for maintaining close liaison with Government on taxation matters, to participate in Government’s consultation process on the development, revision and implementation of tax law and regulations, and to make representations to Government and the revenue authorities on behalf of members.

The Institute continues to work in close co-operation with MIA and the Malaysian Institute of Taxation (MIT) in making submissions to the Inland Revenue Board (IRB) on practical issues encountered by members in the application of the tax legislation, regulations and public rulings issued by the IRB. Several dialogue sessions were held with the Revenue Management Department and Technical Department of the IRB to arrive at practical solutions.

One of the key issues of concern during the year was the new licensing requirements for tax agents issued by the Ministry of Finance. The Institute, jointly with MIA and the Malaysian Institute of Chartered Secretaries and Administrators (MAICSA) submitted a memorandum to the Ministry highlighting our concerns with the requirement for interview of applicants for renewal of tax agent licence; the submission of client information together with applications for renewal of tax agent licence; the inconsistent practical experience requirements for applicants for tax agent licence; and the discriminatory basis for recognition of CPE courses and awarding of CPE points. The Ministry responded positively to the submission and requested the Institutes to submit proposals for its consideration.

The Government has established a Taxation Review Panel to undertake a review of Malaysia’s taxation system. The Institute, jointly with MIA and MIT, have submitted proposals on the tax treatment of the property development and construction industry to the Taxation Review Panel for consideration.

The Tax Practice Committee continues to participate in the IRB’s consultation process relating to the development of Public Rulings, which provide guidance on the interpretation of the Director General of Inland Revenue in respect of a particular provision in the tax law, and the policy and procedures that should be applied. The Public Rulings serve as useful guide to both taxpayers and the IRB officers in the application of the law.

The Institute, jointly with MIA, have submitted proposals for the national budget to the Ministry of Finance. The Institute was also invited by the Ministry to participate in two focus group sessions to deliberate on proposals for enhancing the Government’s services delivery system and rationalisation of tax incentives in Malaysia.

The Committee also represented the Institute at the half-yearly meetings of the Customs-Private Sector Consultative Panel.

The Committee is responsible for the publication of CPA Tax and Investment Review, which contains annual updates on tax laws and regulations, Government policies and guidelines on investment and incentives, and other pertinent information on doing business in Malaysia. It also provides a summary of recent tax cases and an index of current amendments to the Income Tax Act and related legislation. The publication was undertaken with the technical support of five large accounting firms.

The Committee is also responsible for overseeing the publication of the annual budget commentary, which is undertaken on a joint venture basis by the Institute,

Page 31

MIA and MIT. A total of 105,000 copies of 2006 Budget Commentary and Tax Information were printed. A sale of 76,000 copies was achieved while 28,000 copies were sent to members of the three Institutes as part of the membership service and to complimentary recipients. The success of the project was the result of the team work of the three professional bodies and the contributions of the editorial board, consisting of more than 60 members drawn from seven large accounting firms.

Communications and Public Relations

In a highly competitive environment, branding has become a vital corporate strategy for long-term success. The accountancy profession is no exception. The Institute has embarked on a brand development programme to enhance the profile of MICPA as a leading body of the profession and to position the CPA as “Number 1 Business Professional”.

To maintain and grow our position as a leading professional body, we must be able to attract young, bright Malaysians to join the CPA programme. Therefore, our strategic focus is to strengthen the value and visibility of the CPA designation. Towards this end, we have initiated a branding campaign to position the CPA as “Number 1 Business Professional”. A modest scale of advertising campaigns in newspapers and magazines targeted at student audiences have been undertaken due to budget constraints. New marketing materials including publicity brochure, corporate souvenirs and display panels have been produced for use in public events. With anticipated increase in resources, the Institute will embark on a more aggressive advertising campaign and media outreach in the coming year.

With the support of the Young CPA Group, the Institute presented regular career talks at schools, universities and colleges of advanced education. The Institute continues to participate actively in career fairs and exhibitions across the country to promote greater awareness of the CPA brand.

University students are our major source of potential members. To foster close links with the students, the

Institute sponsored a number of students activities including Universiti Sain Malaysia’s Management and Accounting Week 2006, Universiti Tenanga Nasional Magazine titled “Future Accountant 2006” and the Gamma Project of Universiti Malaya.

The Institute maintains constant media relations as they are the most effective channel for outreach to the public. Press releases were issued to keep the media informed of the Institute’s major activities held throughout the year.

The Budget Day provided the Institute with the opportunity to promote our technical excellence. We took part in a special radio programme to highlight the key proposals of the 2006 Budget and answered phone-in enquiries from members of the public. We also participated in media interviews and live commentary on the Budget hosted by the broadcast media.

47th Annual Dinner

The Institute’s 47th Annual Dinner with the theme “Flower Power Nite” was held on June 24, 2005 at the Prince Hotel and Residence Kuala Lumpur. The function, graced by YB Tan Sri Nor Mohamed Yakcop, Minister of Finance II, was attended by over 450 members and invited guests.

The Dinner was also the occasion for the presentation of Anugerah Presiden 2005 to YBhg Tan Sri Lim Leong Seng, a past Council member of the Institute. The award is in recognition of the recipient’s exceptional contribution to the Institute, the accountancy profession and society. YBhg Tan Sri Lim Leong Seng, at the age of 89 years, is one of our most senior members.

Fund-raising for the MACPA Educational Trust Fund (ETF) was also carried out, which included sale of raffle draw tickets and auction of branded goods.

Accountancy Week

The 10th MICPA Accountancy Week, featuring the theme “Accountancy – Your Career Gateway”, was held from September 3-10, 2005. Launched in 1996, the Accountancy Week forms part of the Institute’s programme to promote accountancy as a career and the primacy of the CPA

Volleyball game at the 10th MICPA Accountancy Week10th MICPA Accountancy Week - Organising Committee for Management Simulation Game (UKM & UPM)

YB Datuk Ong Tee Kiat, Deputy Minister of Youth & Sports during the prize presentation ceremony of the 10 MICPA Accountancy Week

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designation to students. It also provides an opportunity for accounting students from all over the country to meet, interact and establish closer relationship.

A wide range of activities were held during the week. These included accounting quiz (AccQuiz) for schools which was open to all upper secondary schools in Semenanjung Malaysia; management simulation game and accounting quiz for students at universities and colleges of advanced education; sports and games competition and career counselling sessions. To foster closer links between the Institute and undergraduate students, some of the events were organised jointly with the accounting clubs of the universities.

It was pleasing to note that the Accountancy Week attracted keen participation from students in secondary schools as well as institutions of higher education.

The Week’s events culminated in the prize presentation ceremony, which was officiated by YB Datuk Ong Tee Keat, the then Deputy Minister of Youth and Sports. The Deputy Minister’s presence added to the significance of the event.

MICPA Excellence Awards

The presentation of the 2005 MICPA Excellence Awards was held on September 24, 2005 at the Pan Pacific Hotel Kuala Lumpur. The function was officiated by YBhg Dato’ Dr Zulkifli Hassan, Deputy Secretary-General of the Ministry of Higher Education on behalf of the Minister of Higher Education, and was witnessed by close to 300 students, their family members, friends and guests of MICPA.

Launched in 1992, the objective of the Excellence Awards is to give honour and public recognition to our young graduates who have achieved all-round excellence in the pursuit of an accountancy qualification. The recipients of the Excellence Awards are not only outstanding in their academic performance, but also in extra-curricular activities and personal development.

A total of seven Excellence Awards for Best Accounting Graduates were presented to the top students from the universities namely IIUM, UKM, UM, UPM, USM,

UiTM and UUM. An excellence award in the name of Most Outstanding CPA Student Award, was presented to a CPA student who has achieved all-round excellence – high distinction in the MICPA examination, exemplary career development and outstanding personal qualities. A Certificate of Meritorious Achievement was presented to all the finalists for the Excellence Awards.

The ceremony was also the occasion for the presentation of Examination Certificates to successful students in the November 2004 and May 2005 MICPA examinations. A total of nine examination prizes in the form of gold medals were presented to the top scorers in the MICPA examinations.

47th Anniversary Commemorative Lecture

In keeping with tradition, the Institute held its 47th Anniversary Commemorative Lecture on December 13, 2006 at The Westin Kuala Lumpur. The Institute was very honoured to have a very distinguished guest, Yang Amat Berbahagia Tun Dr Mahathir Mohamad, the Fourth Prime Minister of Malaysia, to deliver the Commemorative Lecture titled “What it takes to be a Global Leader?”

With his wide knowledge and experience, Tun Dr Mahathir provided a very insightful Lecture. He propagated that ‘leadership is about leading”, and urged Malaysians to think out of the box if we want to be global leaders. He added that “the leader strikes out on his own, and if his lead differs from all who came before him then he is a world leader”.

The event was attended by close to 370 members and guests.

The Malaysian Accountant

The Malaysian Accountant, a bi-monthly publication, serves an important channel of communication between the Institute and members, students and external audiences.

The journal carries articles on a broad range of subjects including accounting, auditing, taxation, financial management, information technology and the national economy, to cater to the interests of different segments of

YBhg Dato’ Dr Zulkifli Hassan, Deputy Secretary General, Ministry of Higher Education, delivering his speech at the 2005 MICPA Excellence Awards Presentation Ceremony

Newly Qualified CPAs YBhg Dato’ Abdul Halim Mohyiddin ushered YABhg Tun Dr Mahathir Mohamad to the 47th Anniversary Commemorative Lecture

Page 33

the membership. It also carries regular columns including updates on MASB, IASB and IFAC activities, reports of case law and global business and professional news provided by our overseas correspondent. Major events of the Institute are also featured to keep members and other readers informed of the Institute’s initiatives and activities.

The Editorial Board has been making a conscientious effort to improve both the design and content of the journal to ensure that it achieves its objectives. In this regard, the Institute has appointed a new publisher for the production of The Malaysian Accountant with the aim to improving the design, content and timeliness of publication.

The MICPA Website

The website serves as an important tool in marketing the CPA brand and establishing links with fellow professional bodies across the world. The Institute continues to increase the use of IT for communication and delivery of products and services to members and students. The website provides a comprehensive range of services and contains an information resource with search facilities. These include the MICPA Members Handbook on approved accounting and auditing standards, companies and securities laws and regulations, and an E-library with self-search and on-line requests and reservation facilities.

Members and students can have secured access to the registers to update their personal particulars, register for CPE events, examinations, as well as make event bookings on-line. An e-mail broadcast functionality has been added which enables the Institute to send e-circulars and alerts to inform members of technical updates, upcoming events and new products.

National Annual Corporate Report Awards

The presentation ceremony for the National Annual Corporate Report Awards (NACRA) 2005 was held on November 29, 2005 at the Palace of the Golden Horses, Kuala Lumpur. Officiated by YB Datuk Hj Mohd Shafie bin Hj Apdal, Minister of Domestic Trade and Consumer Affairs, the presentation ceremony was attended by over 650 guests and NACRA participants.

NACRA strives to promote excellence in annual corporate reporting. It encourages transparency and corporate accountability through the publication of timely, informative, factual and reader friendly annual reports. This is the very cornerstone of NACRA’s theme – Towards Excellence.

A total of 13 awards were presented. The coveted Overall Excellence Award for the Most Outstanding Annual Report of the year was won by Public Bank Berhad for the fourth consecutive year. The Bank also walked away with the Industry Excellence Award for the Finance Sector as well as the Award for Best Annual Report in Bahasa Malaysia, which was jointly won by Kumpulan Guthrie Berhad. The Award for Best Designed Annual Report was bagged by Telekom Malaysia Berhad while the Environmental Reporting Award was won by Shell Refining Company (Federation of Malaysia) Berhad.

Pengurusan Danaharta Nasional Berhad clinched the Special Award for Non-Listed Organisations. A Certificate of Merit was presented to the 14 finalists in recognition of the commendable high quality of their annual report.

An Industry Excellence Award for the MESDAQ Market was introduced in 2004. However, it was disappointing to note that many of the companies listed on the MESDAQ Market were disqualified during the preliminary screening stage as the annual reports did not contain a Bahasa Malaysia version, which was one of the qualifying criteria of NACRA. There was again no winner for the award this year.

The Minister, in his speech stressed that the quality of annual reports is important as it provides valuable information about a company’s financial position and past performance. In addition, it should give investors insights into a company’s operations and its future prospects. The annual report should serve not only as a valuable source of information for minority shareholders and investors but as a useful means of influencing shareholder and public perception.

NACRA is jointly organised by the Malaysian Institute of Accountants (MIA), the Malaysian Institute of Management (MIM) and the Malaysian Institute of Certified Public Accountants (MICPA).

NACRA is open to all companies incorporated or registered in Malaysia as well as public sector and other organisations established in Malaysia. All companies listed on Bursa Malaysia are automatically admitted to the competition while non-listed companies and other organisations are required to submit an entry. The process of adjudication is carried out by an Adjudication Panel consisting of over seventy members drawn from the accountancy profession, commerce and industry, the securities industry and academic institutions.

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Professional Regulation

Financial Statements Review

The Financial Statements Review Committee performs the quality assurance function by monitoring members’ compliance with technical and professional standards.

The Committee carries out a programme of review of published financial statements audited by members. The objective is to determine whether there are any departures from approved accounting standards, listing regulations and statutory financial reporting requirements. Any observations of non-compliance will be communicated to the members responsible to seek explanation. In cases of significant departures, follow-up reviews will be carried out to ensure that these have been rectified.

The thrust of the review process is to assist members maintain high standards in the performance of their work. However, in cases where significant shortcomings are discovered, a complaint may be made to the Investigation Committee.

The Committee is pleased to report that members support this quality assurance process as evidenced by their positive response to the matters raised by the Committee.

Investigation and Disciplinary

During the year under the review, the Investigation Committee considered three cases of complaints, two of which were brought forward from the previous year. The Committee has completed the inquiry into one case and made an order against the member concerned by consent that the member be reprimanded and fined. The remaining two cases were under consideration at the time of this report.

The Disciplinary Committee did not receive any new complaint during the year under review. One case of complaint, which arose from the previous year, was still under consideration.

The Appeal Committee heard two cases of appeals, one by a member and the other by a provisional member, against

the decision of the Disciplinary Committee. In the case of the appeal by the member, the Committee affirmed the finding and order made by the Disciplinary Committee that the member be excluded from membership of the Institute and fined. In the case of the appeal by the provisional member, the Committee affirmed the finding and order made by the Disciplinary Committee that the provisional member be censured and fined.

Pursuant to the recent amendment to the Institute’s bye-laws, two of the members of the Disciplinary Committee shall be lay persons, who are members of a national professional body. This represents a move by the Institute to further enhance the objectivity of the Institute’s disciplinary process.

International Relations

In recognition of the increasingly global nature of business and the accountancy profession itself, the Institute seeks opportunities to participate in international professional organisations and maintains alliances with fellow professional bodies around the world.

The Institute participates actively in the work of IFAC. Two of our Council members are currently serving on the IFAC Board – YBhg Datuk Dr Abdul Samad Hj Alias as a Board member and Mr Beh Tok Koay as a Technical Advisor. We maintain an active involvement in the International Auditing and Assurance Standards Board (IAASB). Mr Sukanta Dutt is a member of the IAASB and currently chairs two of its task forces. YBhg Dato’ Abdul Halim Mohyiddin served a 5-year term on the International Accounting Education Standards Board and Mr Pushpanathan Kanagarayar was a member of the Developing Nations Committee for 2004 – 2005.

The Institute, jointly with MIA, hosted a meeting of the International Accounting Education Standards Board (IAESB) in October 2005 in Kuala Lumpur. The two bodies also jointly organised a Forum on International Education Standards for Professional Accountants. The Forum was addressed by a panel comprising Mr Henry Saville, Chairman of IAESB, Mr David Hunt, then a member of IAESB and leading academicians.

Visitors from the Mongolian Institute of CPAs During a Career FairWinner of the Overall Excellence Award for the Most Outstanding Annual Report of the Year for NACRA 2005 - Public Bank Bhd

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IFAC continues to implement initiatives to strengthen the transparency of its governance structure and standard-setting processes. These include the establishment of the Public Interest Oversight Board (PIOB) to oversee IFAC’s standard-setting and compliance regimes; establishment of a Consultative Advisory Group to each standard-setting board of IFAC to provide public interest input; appointment of public members to the standard-setting boards; and opening of the meetings of the standard-setting boards to the public. These initiatives are aimed at achieving IFAC’s mission to serve the public interest by strengthening the worldwide accountancy profession and contributing to the development of strong international economies. Each member body of IFAC has an important role to play towards the achievement of IFAC’s mission, by ensuring compliance with the international standards promulgated by IFAC at the national level.

In this regard, we have been committed to supporting the objectives of IFAC. We have actively promulgated convergence with international accounting and auditing standards issued by the IASB and IFAC since the first standards were issued in the 1970’s. We have also established a self-regulatory regime to ensure compliance with the standards by our members.

The Institute maintains on-going professional relationships with fellow professional bodies around the world to promote interchange of information and sharing of technical resources.

Registered Students

There has been a significant increase in student enrolment during the year. A total of 303 new students were admitted showing an increase of 85% compared to the previous year. The new intake comprised predominantly accounting graduates from local universities. After taking into account 84 students who were excluded from the register of students for non-payment of annual fees, 20 students who terminated their registration and 53 students who were admitted as members or provisional members, the total number of students stood at 821 at December 31, 2005. This represented an increase in student population by 22% compared to 2004.

Our effort in promoting the CPA qualification to university students has yielded positive results. Of the new student intake, 41% were students in the final year programme of the Bachelor of Accountancy degree. The universities are encouraged to offer Modules C and D of the Advanced Stage Examination as external professional courses to these students. Those who are successful will earn the Professional Certificate in Accountancy (PCA) in addition to the Bachelor of Accountancy degree upon graduation.

The Institute will step up its effort in promoting the CPA programme in accounting firms, business and public sector organisations.

Training Schemes

The Institute provides for the two streams of training.

Stream I is the traditional route of training where a student works in the office of a CPA in public practice under a training contract, and sits for the CPA examination at the same time. This stream of training is targeted at students who plan to build a career in public accounting practice.

Stream II is designed for students who wish to seek a career in commerce, industry or the public sector. The students are not required to enter into a training contract but must maintain a training log book as a record of their practical experience, which must be obtained in an approved training organisation (ATO) under the supervision of a member of the Institute or one of the professional bodies approved by the Institute. The students may undertake the CPA examination prior to the commencement of practical training or during the training period.

The Institute also provides for a special stream of registration for students in the final year programme of an approved degree in accountancy who wish to enroll for the Professional Certificate in Accountancy (PCA) programme.

At December 31, 2005, a total of 607 students were registered under Stream I, 65 students under Stream II and 149 students under Special Stream II. There are over 90 ATOs providing CPA training under Stream II.

Examination

A total of 603 examination entries were received from registered students for the May and November examinations in 2005. This comprised 41 entries for the Professional Stage Examination and 562 entries for the Advanced Stage Examination. In addition, 22 candidates sat for the Admitting Examination which comprises two papers, i.e. Malaysian Taxation and Regulatory & Financial Reporting Framework of Malaysia, for the purpose of gaining admission to membership under bye-law 33(d).

The total number of examination entries increased by 5.6% compared to 2004. The number of students sitting for the Professional Stage Examination continued to be small.

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923

215

714

166

Students’ Stat is t ics

Num

ber o

f Stu

dent

s

2001 2002 2003 2004 2005

571

118

46

527

92

56Stream I

Stream II

Special Stream II

As at December 31, 2005

Qualification Stream Stream Special Total I II Stream II

STPM or Equivalent 1 0 0 1 2

DIA 0 0 0 0 0

Accounting Degrees 363 1 149 513 266

Other Degrees 3 0 0 3 3

Sub-total 367 1 149 517 271

Completed trainingcontract but not 240 64 0 304 404examination

GRAnD ToTAL 607 65 149 821 675

Total as at

December 31, 2004

2005 2004

NumberofregisteredstudentsatJanuary1 675 735

Registrationduringtheyear 303 164

Less:

Admittedtomembership/provisionalmembership, 157 224excludedorterminated

NumberofregisteredstudentsatDecember31 821 675

NetINCReASe/(DeCReASe) 146 (60)

607

6514

9

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Enrolment for MICPA Examinations No. of Candidates

2005 2004

Professional Stage Examination

Module A 17 7

Module B 24 18

Advanced Stage Examination

Module C 280 216

Module D 191 173

Module E 91 123

Bye-law 33(d) candidates 22 55

Education and Training

One of the major tasks of the Education and Training Committee during the year was the review of the Advanced Stage Examination.

Currently, the Advanced Stage Examination comprises three modules – Module C on Advanced Taxation, Module D on Advanced Financial Reporting and Module E on Advanced Business Management and Integrative Case Study. In the light of significant changes taking place in the environment, the Committee undertook a review of the Advanced Stage Examination. Apart from updating the examination syllabus and education programme to take into consideration new accounting, financial reporting and auditing standards and changes in the regulatory framework, the Advanced Stage Examination is structured into four modules. The existing Module D, which covers accounting, financial reporting and auditing, is split into two modules as the syllabus has become increasingly challenging resulting from the changes in international accounting and auditing standards, as well as amendments to statutory financial reporting requirements. The revised Module D will focus on the advanced topics in accounting and financial reporting. The new Module E will focus on competence requirements for auditing professionals, covering the advanced aspects and issues relating to auditing and other assurance engagements, the legal and professional environment, and assessment and advice on corporate governance and business controls.

The Institute has appointed writers to develop new study material. The new examination structure will take effect from the November 2006 examination.

The students register shows that 93% of the students are pursuing the Advanced Stage Examination (consisting of Modules C, D and E). A large majority of these students are accounting graduates who are exempted from the Professional Stage Examination. Only 7% of the students are pursuing the Professional Stage Examination (consisting of Modules A and B).

The Advanced Stage Examination requires students to successfully complete a prescribed quantum of workshops before they are eligible to sit for the final module examination. A student’s performance in a module will be based on two assessment components, which is the combination of his performance in the workshop sessions (30%) and achievement in the final module examination (70%).

A total of 695 students enrolled for the workshop sessions for Modules C, D and E in 2005. This represented an increase in enrolment by 37% compared to the previous year. Based on feedback from students, these interactive workshops were effective in enhancing their communication and research skills, as well as in charting their progress throughout the learning process.

A Professional Certificate in Accountancy (PCA) is awarded to students who have completed Modules C and D of the Advanced Stage Examination, without the requirement for practical experience. The PCA is targeted at students who are currently pursuing the Bachelor of Accountancy degree at approved universities. The PCA has gained increased endorsement by the universities as evidenced by the fact that final year university students accounted for 41% of the total new admission of students in 2005.

The Committee is also responsible for the evaluation of new qualifications for entry to the CPA programme and for possible exemption. During the year, the Committee has carried out an assessment of the Bachelor of Commerce (Hons)(Accountancy) degree from Universiti Tunku Abdul Rahman (UTAR). Based on the Committee’s recommendation, the degree programme has been approved by the Council as an entry qualification to the CPA programme and for exemption from Module A of the Professional Stage Examination.

The Committee is charged with the responsibility for planning and organising CPE programmes for members. As highlighted in the earlier pages of this report, CPE programmes in the form of seminars, workshops and forums, covering a wide range of topics, were held throughout the year. A particular focus of this year’s CPE programmes was on the new/revised Financial Reporting Standards issued by the MASB.

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The Committee also devoted resources to support Malaysia’s representation on the International Accounting Education Standards Board (IAESB) of IFAC. Although Malaysia’s appointment has ended in October 2005, after 5 years of service, the Committee continues to participate actively in IAESB’s consultative process.

MACPA Educational Trust Fund

The MACPA Educational Trust Fund (ETF) was founded in 1981 by the Council of the Institute to promote education and research in accountancy and related fields.

The Trust Fund continues to provide financial assistance to young Malaysians with outstanding academic record but who are financially handicapped to pursue a higher accountancy qualification.

Currently, two students are under the ETF scholarship scheme pursuing the Bachelor of Accountancy degree at public universities. The Trust Fund has also provided two study loans in 2005 to university students for pursuing the Institute’s Professional Certificate in Accountancy (PCA) programme.

In the area of research, the Trust Fund has in 2003 commissioned Universiti Utara Malaysia (UUM) to carry out the project on auditor remuneration. The project is to examine the determinants of audit fees in Malaysia, the impact of non-audit service fees on audit fees, and a comparison of the level of audit fees in Malaysia with that in East Asia economies. The project, jointly sponsored by the Trust Fund and UUM, is currently at the second stage of data collection from target respondents.

There has been a further delay in the project commissioned in 2000, undertaken by the Faculty of Business and Accountancy, Universiti Malaya. The objective of the project is to investigate the perception of auditors, enterprises and regulators on the impact of rotation of auditors on auditor independence and the effectiveness of audit performance.

Acknowledgement

It has been a great privilege and a rewarding experience for me to hold the office of the President of the Institute. I value the opportunity to work with a team of dedicated people and to play a part in building up the Institute and the profession.

I would like to express my gratitude to my fellow Council members for their full support and co-operation throughout my tenure as President. In particular, I would like to record my special thanks to Mr Beh Tok Koay, our immediate past president for his advice, encouragement and sharing of experience. I am also indebted to our Vice President, YBhg Dato’ Nordin Baharuddin, for sharing my presidential load.

In addition, I would like to pay a special tribute to three of our colleagues who will stand down from the Council at the coming annual general meeting after many years of dedicated service. Mr Lim Kok Beng is one of our longest serving Council members, having served on the Council for 24 years. He has contributed to many areas of the Institute’s work, particularly in the examination and disciplinary functions. As Chairman of the Public Affairs Committee, Mr Lim Kian Thiam has played a key role in the development and implementation of the Institute’s communication strategies. Mr Khor Chin Peng has been actively involved in the Institute’s technical and examination work, having served as Chairman of the Financial Statements Review Committee for five years. I have no doubt that the Institute has benefited tremendously from their expertise and guidance.

The Institute has come a long way to its current position as a reputable professional body committed to technical excellence. This is the result of the cumulative effort and contributions of our members. A lot of our activities would not have been possible without the support and input of a large number of members. I would like to thank all these members for their relentless efforts.

It will be remiss for me not to acknowledge the good work done by the Secretariat staff. The past year has been a busy one and it demanded extra hours from the staff. I would like to express my sincere thanks to the Secretariat team, in particular the Executive Director, Ms Tan Shook Kheng, for their hard work and dedication.

We have set our objectives and the strategic plan for the future of the Institute. We will focus on enhancing the value of the CPA as a designation that stands for quality, integrity and expertise, and achieving continued membership growth. We will continue to invest in resources to deliver services that are relevant to members’ needs. Most importantly, I know I can count on members’ support to achieve these goals.

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Technical Pronouncements April 2006A Approved Accounting Standards and Guidelines

Statement of Approved Accounting Standards (Issued 1988)

(a) Financial Reporting Standards (FRS) issued by Malaysian Accounting Standards Board (MASB)*

Extant Accounting MASB Standards Operational Superseded Date

ForewordtoMASBStandardsandOtherTechnicalPronouncements(Revised) Jul.1,1999

FRS1 First-timeadoptionofFinancialReportingStandards Jan.1,2006

FRS2 Share-basedPayment Jan.1,2006

FRS3 BusinessCombinations FRS1222004 Jan.1,2006

FRS5 Non-currentAssetsHeldforSaleandPresentationof FRS1352004 Jan.1,2006 DiscontinuedOperations

FRS101 PresentationofFinancialStatements FRS1012004 Jan.1,2006

FRS102 Inventories FRS1022004 Jan.1,2006

FRS1072004 CashFlowStatements IAS7 Jul.1,1999 (Revised)

FRS108 AccountingPolicies,ChangesinAccountingEstimatesandErrors FRS1082004 Jan.1,2006

FRS110 EventsAftertheBalanceSheetDate FRS1102004 Jan.1,2006

FRS1112004 ConstructionContracts IAS11 Jul.1,1999

FRS1122004 IncomeTaxes IAS12 Jul.1,2002

FRS1142004 SegmentReporting IAS14 Jan.1,2002

FRS116 Property,PlantandEquipment FRS1162004 Jan.1,2006

FRS117 Leases FRS1172004Oct.1,2006

FRS1182004 Revenue IAS18 Jan.1,2000

FRS1192004 EmployeeBenefits IAS19 Jan.1,2003

FRS1202004 AccountingforGovernmentGrantsandDisclosureof IAS20 Jan.1,2004 GovernmentAssistance (Informationonly)

FRS121 TheEffectsofChangesinForeignExchangeRates IAS21 Jan.1,2006

FRS1232004 BorrowingCosts IAS23 Jul.1,2002

FRS124 RelatedPartyDisclosures FRS1242004 Oct.1,2006

FRS1262004 AccountingandReportingbyRetirementBenefitPlans IAS26 Jan.1,2003

FRS127 ConsolidatedandSeparateFinancialStatements FRS1272004 Jan.1,2006

FRS128 InvestmentsinAssociates FRS1282004 Jan.1,2006

FRS1292004 FinancialReportinginHyperinflationaryEconomies IAS29 Jan.1,2003

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Extant Accounting MASB Standards Operational Superseded Date

FRS131 InterestsinJointVentures FRS1312004 Jan.1,2006

FRS132 FinancialInstruments:DisclosureandPresentation FRS1322004 Jan.1,2006

FRS133 EarningsPerShare FRS1332004 Jan.1,2006

FRS1342004 InterimFinancialReporting IAS34 Jul.1,2002

FRS136 ImpairmentofAssets FRS1362004 Jan.1,2006

FRS1372004 Provisions,ContingentLiabilitiesandContingentAssets IAS10 Jul.1,2001

FRS140 InvestmentProperty FRS1252004 Jan.1,2006

FRS2012004 PropertyDevelopmentActivities MAS7 Jan.1,2004

FRS2022004 GeneralInsuranceBusiness MAS3 Jul.1,2001

FRS2032004 LifeInsuranceBusiness MAS4 Jul.1,2001

FRS2042004 AccountingforAquaculture MAS5 Sep.1,1998Note:* FRSareapplicabletoallentitiesotherthanprivateentities FRSxxcorrespondstotheequivalentIFRSissuedbytheIASB. FRSwith100prefixcorrespondstotheequivalentIAS.Hence,FRS112isequivalenttoIAS12. FRSwith200prefixdenoteslocallydevelopedstandardswithnoequivalentinternationalstandard.

(b) Private Entity Reporting Standards (PERS) issued by Malaysian Accounting Standards Board (MASB)** MASBOriginal OperationalDate

MASB1 PresentationofFinancialStatements Jul.1,1999

MASB2 Inventories Jul.1,1999

MASB3 NetProfitorLossforthePeriod,FundamentalErrorsandChangesinAccountingPolicies Jul.1,1999

MASB4 ResearchandDevelopmentCosts Jul.1,1999

MASB5 CashFlowStatements Jul.1,1999

MASB6 TheEffectsofChangesinForeignExchangeRates Jul.1,1999

MASB7 ConstructionContracts Jul.1,1999

MASB9 Revenue Jan.1,2000

MASB10 Leases Jan.1,2000

MASB11 ConsolidatedFinancialStatementsandInvestmentsinSubsidiaries Jan.1,2000

MASB12 InvestmentsinAssociates Jan.1,2000

MASB14 DepreciationAccounting Jul.1,2000

MASB15 Property,PlantandEquipment Jul.1,2000

MASB16 FinancialReportingofInterestsinJointVentures Jul.1,2000

MASB19 EventsaftertheBalanceSheetDate Jul.1,2001

MASB20 Provisions,ContingentLiabilitiesandContingentAssets Jul.1,2001

MASB23 ImpairmentofAssets Jan.1,2002

MASB25 IncomeTaxes Jul.1,2002

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MASBOriginal OperationalDate

MASB27 BorrowingCosts Jul.1,2002

MASB28 DiscontinuingOperations Jan.1,2003

MASB29 EmployeeBenefits Jan.1,2003

MASB30 AccountingandReportingbyRetirementBenefitPlans Jan.1,2003

MASB31 AccountingforGovernmentGrantsandDisclosureofGovernmentAssistance Jan.1,2004

MASB32 PropertyDevelopmentActivities Jan.1,2004

IAS25 AccountingforInvestments Jan.1,1993

IAS29 FinancialReportinginHyperinflationaryEconomies Jan.1,2003

MAS5 AccountingforAquaculture Sep.1,1998

IB-1 PreliminaryandPre-operatingExpenditure Dec.2000

**PERSareapplicabletoprivateentitiesasdefinedbelow:AprivateentityisaprivatecompanyincorporatedundertheCompaniesAct1965that-• isnotitselfrequiredtoprepareorlodgeanyfinancialstatementsunderanylawadministratedbytheSecuritiesCommissionor

BankNegaraMalaysia;and• isnotasubsidiaryorassociateoforjointlycontrolledbyanentitywhichisrequiredtoprepareorlodgeanyfinancialstatements

underanylawadministeredbytheSecuritiesCommissionorBankNegaraMalaysia.PERSareessentiallyMASBStandardsissuedpriortoJanuary1,2005exceptforremovalofcertainStandardsandareeffectiveforannualreportsbeginningonorafterJanuary1,2006.

(c) Malaysian Accounting Standards Board (MASB) Islamic Accounting Standards MASB OperationalDate

FRSi-12004 MASBi-1 PresentationofFinancialStatementsofIslamicFinancialInstitution Jan.1,2003

FRSwithi prefixdenoteslocallydevelopedstandardswithnoequivalentinternationalstandard.

(d) MASB IC Interpretations

MASB OperationalDate

ICInterpretation107 IntroductionoftheEuro Jan.1,2006

ICInterpretation110 GovernmentAssistance-NoSpecificRelationtoOperatingActivities Jan.1,2006

ICInterpretation112 Consolidation-SpecialPurposeEntities Jan.1,2006

ICInterpretation113 JointlyControlledEntities-Non-MonetaryContributionsbyVenturers Jan.1,2006

ICInterpretation115 OperatingLeases-Incentives Jan.1,2006

ICInterpretation121 IncomeTaxes-RecoveryofRevaluedNon-DepreciableAssets Jan.1,2006

ICInterpretation125 IncomeTaxes-ChangesintheTaxStatusofanEntityoritsShareholders Jan.1,2006

ICInterpretation127 EvaluatingtheSubstanceofTransactionsInvolvingtheLegalFormofaLease Jan.1,2006

ICInterpretation129 Disclosure-ServiceConcessionArrangements Jan.1,2006

ICInterpretation131 Revenue-BarterTransactionsInvolvingAdvertisingServices Jan.1,2006

ICInterpretation132 IntangibleAssets-WebSiteCosts Jan.1,2006

ICInterpretation201 PreliminaryandPre-operatingExpenditure Jan.1,2001

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(e) MASB Technical Releases (TR) MASB IssueDate

TR1 ShareBuybacks-AccountingandDisclosures(RevisedApril1999) Jul.1,1999

TR2 TheYear2000Issue:AccountingandDisclosures Jul.31,1998

TRi-1 AccountingforZakatonBusiness Jul.1,2006

TRi-2 Ijarah Jul.1,2006

(f) MASB Statement of Principles (SOP)

SOP1 ExemptEnterprises Jul.2000

SOP2 InterimFinancialReporting [SupersededbyFRS1342004]

(g) International Accounting Standards (IAS) MICPA MASB IASB Operational Operational Operational Date Date Date

IAS25 AccountingforInvestments 1993 1998 1987

(h) Malaysian Accounting Standards (MAS) MICPA MASB Operational Operational Date Date

(i) Issued

MAS1 EarningsPerShare(issuedJan.1984) [SupersededbyFRS133]

MAS2 AccountingforAcquisitionsandMergers(issuedJan.1989) [SupersededbyFRS3]

MAS3 AccountingforGeneralInsuranceBusiness(issuedJan.1992) [SupersededbyFRS2022004]

MAS4 AccountingforLifeInsuranceBusiness(issuedJan.1992) [SupersededbyFRS2032004]

MAS5 AccountingforAquaculture(issuedJan.1992) [SupersededbyFRS2042004]

MAS7 AccountingforPropertyDevelopmentActivities(issuedJan.1994) [SupersededbyFRS201]

MAS8 AccountingforPre-CroppingCosts 1997 –

(ii) Exposure Draft

MAS6 AccountingforGoodwill [SupersededbyFRS3]

(i) MICPA Technical Bulletins (TB) MICPA IssueDate

TB1 AccountingforInvestments(issued1982) (SupersededbyIAS25)

TB2 AccountingforLandHeldforDevelopmentandResale(issued1982) (SupersededbyMAS7)

TB3 AccountingforMalaysianGovernmentSecurities(issued1983) Withdrawn

TB4 ReportinginConnectionwiththeCapitalAdequacyRatioofBanks Apr.1983

TB5 AccountingfortheAcquisitionCostsofAssetsinaSubsidiary(issued1984) (SupersededbyIAS27)

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MICPA IssueDate

TB6 Auditor’sReportsonFinancialStatementsPublishedinthePrintMediaby FinancialInstitutions Apr.1988

TB7 AccountingforBankers’Acceptances Jan.1989

TB8 AccountingforProfitGuaranteeandOtherContingenciesinBusinessAcquisitions Dec.1995

B Approved Auditing and Assurance Standards and Guidelines

StatementofPolicyofCouncil-ApprovedAuditingStandards(issuedJan.2000) IAG/ISA MICPA IFAC Superseded IssueDate IssueDateStructureofPronouncementsIssuedbytheInternational AuditingandAssuranceStandardsBoard – Jan.2006 2004

PrefacetoInternationalStandardsonAuditingandRelatedServices – Jan.2000 Jul.1994

GlossaryofTerms – Jan.2000 Jul.1994

(a) International Standards on Quality Control (ISQC) MICPA IFAC Operational Operational Date Date

ISQC1 QualityControlforFirmsthatPerformAuditsandReviews – Jan.2006 Feb.2004 ofHistoricalFinancialInformation,andOtherAssurance andRelatedServicesEngagements

(b) International Standards on Auditing (ISA)

ISA100 AssuranceEngagements – Dec.2002 Jun.2000

ISA120 FrameworkofInternationalStandardsonAuditing – Jan.2000 Jul.1994

ISA200 ObjectiveandGeneralPrinciplesGoverning IAG1& Jan.2006 Oct.2003 anAuditofFinancialStatements IAG3

ISA210 TermsofAuditEngagements IAG2 Jan.2000 Jul.1994

ISA220 QualityControlforAuditofHistoricalFinancial IAG7 Jan.2006 Feb.2004(Revised) Information

ISA230 Documentation IAG9 Jan.2000 Jul.1994

ISA240 TheAuditor’sResponsibilitytoConsiderFraud IAG11 Jan.2006 Feb.2004(Revised) andErrorinanAuditofFinancialStatements

ISA250 ConsiderationofLawsandRegulations ISA31 Jan.2000 Jul.1994 inanAuditofFinancialStatements

ISA260 CommunicationsofAuditMatterswith – Dec.2002 Jun.1999 ThoseChargedwithGovernance

ISA300 Planning IAG4 Jan.2000 Jul.1994

ISA310 KnowledgeoftheBusiness ISA30 Jan.2000 Jul.1994

ISA315 UnderstandingtheEntityandItsEnvironmentand IAG25 Jan.2006 Oct.2003 AssessingtheRisksofMaterialMisstatement

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IAG MICPA IFAC Superseded Operational IssueDate Date

ISA320 AuditMateriality IAG25 Jan.2000 Jul.1994

ISA330 TheAuditor’sProceduresinResponseto – Jan.2006 Oct.2003 AssessedRisks

ISA402 AuditConsiderationsRelatingtoEntities IAG6 Jan.2000 Jul.1994 UsingServiceOrganisations Addendum2

ISA500 AuditEvidence IAG8 Jan.2006 Oct.2003

ISA501 AuditEvidence-AdditionalConsiderations IAG8 Jan.2000 Jul.1994 forSpecificItems Addenda1&2

ISA505 ExternalConfirmations – Dec.2002 Jun.2000

ISA510 InitialEngagements-OpeningBalances IAG28 Jan.2000 Jul.1994

ISA520 AnalyticalProcedures IAG12 Jan.2000 Jul.1994

ISA530 AuditSamplingandOtherSelective IAG19 Jan.2000 Jul.1994 TestingProcedures

ISA540 AuditofAccountingEstimates IAG26 Jan.2000 Jul.1994

ISA550 RelatedParties IAG17 Jan.2000 Jul.1994

ISA560 SubsequentEvents IAG21 Jan.2000 Jul.1994

ISA570 GoingConcern IAG23 Dec.2002 Jul.2000

ISA580 ManagementRepresentations IAG22 Jan.2000 Jul.1994

ISA600 UsingtheWorkofAnotherAuditor IAG5 Jan.2000 Jul.1994

ISA610 ConsideringtheWorkofInternalAuditing IAG10 Jan.2000 Jul.1994

ISA620 UsingtheWorkofanExpert IAG18 Jan.2000 Jul.1994

ISA700 TheAuditor’sReportonFinancialStatements IAG13 Jan.2000 Jul.1994 MAG1&ATR1

ISA710 Comparatives – Jan.2000 Jul.1997

ISA720 OtherInformationinDocumentsContaining IAG14 Jan.2000 Jul.1994 AuditedFinancialStatements

ISA800 TheAuditor’sReportonSpecialPurpose IAG24 Jan.2000 Jul.1994 AuditEngagements

(c) International Auditing Practice Statements (IAPS) MICPA IFAC IssueDate IssueDate

IAPS1000 Inter-BankConfirmationProcedures Jan.2000 Jul.1994

IAPS1001 ITEnvironments-Stand-AlonePersonalComputers Dec.2002 Jul.2001

IAPS1002 ITEnvironments-On-LineComputerSystems Dec.2002 Jul.2001

IAPS1003 ITEnvironments-DatabaseSystems Dec.2002 Jul.2001

IAPS1004 TheRelationshipbetweenBankingSupervisorsand Aug.2003 Dec.2001 Banks’ExternalAuditors

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MICPA IFAC IssueDate IssueDate

IAPS1005 TheSpecialConsiderationsintheAuditofSmallEntities Dec.2002 Mar.1999

IAPS1006 AuditsoftheFinancialStatementsofBanks Aug.2003 Dec.2001

IAPS1007 CommunicationswithManagement withdrawn withdrawn (Jun.2001)

IAPS1008 RiskAssessmentsandInternalControl Jan.2000 Jul.1994

IAPS1009 Computer-AssistedAuditTechniques Jan.2000 Jul.1994

IAPS1010 TheConsiderationofEnvironmentalMattersintheAuditof Jan.2000 Mar.1998 FinancialStatements

IAPS1011 ImplicationsforManagementandAuditorsoftheYear2000Issue withdrawn withdrawn (Jun.2001)

IAPS1013 ElectronicCommerce–EffectontheAuditofFinancialStatements Aug.2003 Mar.2002

(d) International Standards on Review Engagements (ISREs) IAG MICPA IFAC Superseded IssueDate IssueDate

ISRE2400 EngagementstoReviewFinancialStatements IAG/RS1&2 Jan.2000 Jul.1994 (PreviouslyISA910)

(e) International Standards on Assurance Engagements (ISAEs)

ISAE3400 TheExaminationofProspectiveFinancialInformation IAG27 Jan.2000 Jul.1994 (PreviouslyISA810)

(f) International Standards on Related Services (ISRSs)

ISRS4400 EngagementstoPerformAgreed-uponProcedures IAG/RS3 Jan.2000 Jul.1994 RegardingFinancialInformation (PreviouslyISA920)

ISRS4410 EngagementstoCompileFinancialInformation IAG/RS4 Jan.2000 Jul.1994 (PreviouslyISA930)

(g) Malaysian Auditing Guidelines (MAG) MICPA IssueDate

MAG1 Auditor’sReports:FormsandQualifications(issued1988) (SupersededbyISA700)

(h) MICPA Auditing Technical Releases (ATR)

ATR1 AuditReportExamples(issuedApr.1988) (SupersededbyISA700)

ATR2 StandardLetterofRequestforInformationfromBanks/FinanceCompanies May1990 forAuditPurposes

ATR3 Accountants’ReportforProspectus(issuedJan.1989) (SupersededbyISA810)

ATR4 ReportinginConnectionwithSubmissionofProposalsto (SupersededbyISA810) CapitalIssuesCommittee(issuedMay1990)

ATR5 GuidanceforAuditorsontheReviewofDirectors’StatementonInternalControl Mar.2002

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C MICPA Guidelines for Accounting in Public Sector (GAPS) MICPA IssueDate

PrefacetoGuidelinesforAccountinginPublicSector Jan.1992

GAPS1 PublicSectorAccountingConcepts Jan.1992

D MICPA Insolvency Guidance Notes (IG) MICPA IssueDate

PrefacetoInsolvencyGuidanceNotes Nov.1992

IG1 MinimumStandardsofPracticebyInsolvencyPractitioners Nov.1992

IG2 AReceiver’sResponsibilityfortheBooksandRecordsoftheCompany Jul.1994

IG3 ALiquidator’sInvestigationintotheAffairsofanInsolventCompany Jul.1994

IG4 ProcedureforWindingUpanInsolventCompanyVoluntarily Dec.1997

IG5 Members’VoluntaryWindingUp Dec.1997

IG6 PreparationofStatementofReceiptsandPaymentsbyInsolvencyPractitioners Aug.1998

IG7 ProfessionalConductandEthicsinInsolvencyPractice Aug.1998

IG8 SuggestedReceivershipChecklist Aug.1998 (ForReceiver&ManagerAppointedunderaDebenture)

E Statements on International Management Accounting

MICPAStatementonInternationalManagementAccountingStatements(issuedDec.1992)

(a) Statements on International Management Accounting Practices (MAP)


PrefacetoStatementsonInternationalManagementAccounting Dec.1992 Feb.1987

MAP1 ManagementAccountingConcepts(Revised1998) Aug.1998* Mar.1998

MAP2 TheCapitalExpenditureDecision Dec.1992 Oct.1989

MAP3 ForeignCurrencyExposureandRiskManagement Sep.1993 Jul.1990

MAP4 ManagementControlofProjects Jul.1993 Oct.1991

MAP5 ManagingQualityImprovements Sep.1993 Mar1993

MAP6 PostCompletionReview Nov.1994 Apr.1994

MAP7 StrategicPlanningforInformationResourceManagement Nov.1996* Feb.1996

(b) Statements on International Management Accounting Studies (IMAS) MICPA IFAC IssueDate IssueDate

(i) Issued

IMAS3 AnIntroductiontoStrategicFinancialManagement(Revised1995) Jul.1993 Apr.1988

IMAS4 ReportingTreasuryPerformance-AFrameworkfor Apr.1996* Sep.1995 TheTreasuryPractitioner

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IMAS5 TheRoleofManagementAccountingintheEmergingTeam May1996* Sep.1995 ApproachtoWork

IMAS6 EnvironmentalManagementinOrganisations Aug.1998* Mar.1998 -TheRoleofManagementAccounting

IMAS7 TheMeasurementandManagementofIntellectualCapital Apr.1999* Dec.1998

IMAS8 CodifyingPowerandControl:EthicalCodesinAction Sep.1999* May1999

IMAS9 EnhancingShareholderWealthbyBetterManagingBusinessRisk Sep.1999* Jun.1999

IMAS10 TargetCostingforEffectiveCostManagement Sep.1999* Jun.1999

* Reviewed by MICPA and issued to members on request basis

(ii) Being considered by MICPA for Issuance

IMAS11 AProfessionTransforming:FromAccountingtoManagement – Mar.2001

F MICPA Statements MICPA IssueDate

No.1 RecommendationsonthePresentationsofAccounts(issued1972) (SupersededbyIAS1)

No.2 AuditReportsandQualifications(issued1972) (SupersededbyMAG1)

No.3 Accountants’ReportforProspectuses(issued1976) (SupersededbyATR3)

No.4 Directors’Report(issuedNov.1985) (Withdrawn) ModelHoldingsBerhad-SpecimenFinancialStatements(Revised) Jun.2004

No.5 StatementofSourceandApplicationofFunds(issued1981) (SupersededbyIAS7)

G Status of Other MASB Pronouncements

(a) MASB Exposure Draft MASB IssueDate

ED26 FinancialReportingbyUnitTrusts Jun.2000

ED48 ExplorationforandEvaluationofMineralResources May2005

ED49 AmendmenttoFinancialReportingStandard1192004 Jul.2005 EmployeeBenefits:ActuarialGainsandLosses,GroupPlansandActivities

ED50 Agriculture Jan.2006

ED51 InsuranceContracts Jan.2006

DraftICInterpretation1 ChangesinExistingDecommissioning,RestorationandSimilarLiabilities Feb.2006

DraftICInterpretation2 Members’SharesinCo-operativeEntitiesandSimilarInstruments Feb.2006

DraftICInterpretation5 RightstoInterestsarisingfromDecommissioning,Restorationand Feb.2006 EnvironmentalRehabilitationFunds

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MASB IssueDate

(b) MASB Discussion Paper

DP1 AProposedFrameworkforthePreparationandPresentationofFinancialStatements Jul.1998

H Status of Other International Standards on Auditing (ISA), International Standards on Assurance Engagements (ISAE) and International Standards on Review Engagements (ISRE)

IFAC IssueDate

(a) Issued as MICPA Exposure Draft

ISA300 PlanninganAuditofFinancialStatements Jun.2004(Revised)

ISA545 AuditingFairValuesMeasurementsandDisclosures Jul.2002

ISAE3000 AssuranceEngagementsOtherthanAuditsorReviewsof Dec.2003(Revised) HistoricalFinancialInformation(supersedesISA100)

(b) Being Considered by MICPA for Issuance

PrefacetotheInternationalStandardsonQualityControl,Auditing,AssuranceandRelatedServices Jul.2003

InternationalFrameworkforAssuranceEngagements Dec.2003

ISA230 TheAuditDocumentation Sep.2005(Revised)

ISA260 TheAuditor’sCommunicationwithThoseChargedwithGovernance Mar.2005(Revised)

ISA320 MaterialityintheIdentificationandEvaluationofMisstatements Dec.2004(Revised)

ISA540 AuditingAccountingEstimatesandRelatedDisclosures(OtherthanthoseinvolvingFair Dec.2004(Revised) ValueMeasurementsandDisclosures)

ISA600 TheAuditofGroupFinancialStatements Mar.2005(Revised)

ISA700 TheIndependentAuditor’sReportonaCompleteSetofGeneralPurpose Dec.2004(Revised) FinancialStatements

ISA701 TheIndependentAuditor’sReportonOtherHistoricalFinancialInformation Jun.2005

ISA705 ModificationstotheOpinionintheIndependentAuditor’sReport Mar.2005

ISA706 EmphasisofMatterParagraphsandOtherMattersParagraphsintheIndependent Mar.2005 Auditor’sReport

ISA800 TheIndependentAuditor’sReportonSummaryAuditedFinancialStatements Jun.2005

ISRE2410 ReviewofInterimFinancialInformationPerformedbytheIndependentAuditoroftheEntity Jul.2005

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I Status of Other International Statements on Auditing IFAC IssueDate

(a) Issued as MICPA Exposure DraftIAPS1004 TheRelationshipBetweenBankingSupervisorsandBanks’ExternalAuditors Dec.2001

IAPS1012 AuditingDerivativeFinancialInstruments Mar.2001

IFAC IssueDate

(b) Being Considered by MICPA for Issuance

IAPS1005 TheSpecialConsiderationsintheAuditofSmallEntities(Revised) Oct.2003

IAPS1014 ReportingbyAuditorsonCompliancewithInternationalFinancialReportingStandards Jun.2003

J Status of Other Statements on International Management Accounting

IFAC IssueDate

(a) Not Issued by MICPAStudyNo.1 ControlofComputerApplications Oct.1985

ManagementAccountingConcepts(Revised1998) Mar.1998

K International Public Sector Accounting Standards (IPSAS)

IFAC IssueDate

IntroductiontothePublicSectorCommitteeoftheInternationalFederationofAccountants Jul.1988

PrefacetoInternationalPublicSectorAccountingStandards May2000

(a) Standards

IPSAS1 PresentationofFinancialStatements May2000IPSAS2 CashFlowStatements May2000IPSAS3 NetSurplusorDeficitforthePeriod,FundamentalErrorsandChangesinAccountingPolicies May2000IPSAS4 TheEffectsofChangesinForeignExchangeRates May2000IPSAS5 BorrowingCosts May2000IPSAS6 ConsolidatedFinancialStatementsandAccountingforControlledEntities May2000IPSAS7 AccountingforInvestmentsinAssociates May2000IPSAS8 FinancialReportingofInterestsinJointVentures May2000IPSAS9 RevenuefromExchangeTransactions Jun.2001IPSAS10 FinancialReportinginHyperinflationaryEconomies Jun.2001IPSAS11 ConstructionContracts Jun.2001IPSAS12 Inventories Jun.2001IPSAS13 Leases Dec.2001IPSAS14 EventsAftertheReportingDate Dec.2001IPSAS15 FinancialInstruments:DisclosureandPresentation Dec.2001IPSAS16 InvestmentProperty Dec.2001

Page 50

IFAC IssueDate

IPSAS17 Property,Plant&Equipment Dec.2001

IPSAS18 SegmentReporting Jun.2002

IPSAS19 Provisions,ContingentLiabilitiesandContingentAssets Oct.2002

IPSAS20 RelatedPartyDisclosures Oct.2002

IPSAS21 ImpairmentofNonCash-GeneratingAssets Dec.2004

IPSAS FinancialReportingundertheCashBasisofAccounting Jan.2003CASHBASIS

GlossaryofDefinedTermsIPSAS1toIPSAS18 Jun.2002

(b) GuidelinesNo.1 FinancialReportingbyGovernmentBusinessEnterprises Jul.1989

No.2 ApplicabilityofInternationalStandardsonAuditingtotheAudits ofFinancialStatementsofGovernmentBusinessEnterprises Jul.1990

No.3 ApplicabilityofInternationalStandardsonAuditingtotheAuditsofFinancial StatementsofGovernmentsandOtherNon-BusinessPublicSectorEntities Jan.1992

(c) Studies

Study1 FinancialReportingbyNationalGovernments Mar.1991

Study2 ElementsoftheFinancialStatementsofNationalGovernments Jul.1993

Study3 AuditingforCompliancewithAuthorities-APublicSectorPerspective Oct.1994

Study4 UsingtheWorkofOtherAuditors-APublicSectorPerspective Oct.1994

Study5 DefinitionandRecognitionofAssets Aug.1995

Study6 AccountingforandReportingLiabilities Aug.1995

Study7 PerformanceReportingbyGovernmentBusinessEnterprises Jul.1996

Study8 TheGovernmentFinancialReportingEntity Jul.1996

Study9 DefinitionandRecognitionofRevenue Dec.1996

Study10 DefinitionandRecognitionofExpenses/Expenditure Dec.1996

Study11 GovernmentalFinancialReporting May2000

Study12 PerspectivesonCostAccountingforGovernments Sep.2000

Study13 GovernanceinthePublicSector:AGoverningBodyPerspective Aug.2001

Study14 TransitiontotheAccrualBasisofAccounting: GuidanceforGovernmentsandGovernmentEntities Apr.2002

(d) Other Statements

InvitationtoComment:ImpairmentofAssets Jul.2000

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L International Information Technology Guidelines

IFAC IssueDate

(a) Guidelines

No.1 ManagingSecurityInformation Jan.1998

No.2 ManagingInformationTechnologyPlanningforBusinessImpact Jan.1999

No.3 AcquisitionofInformationTechnology May2000

IFAC IssueDate

No.4 TheImplementationofInformationTechnologySolutions May2000

No.5 ITServiceDeliveryandSupport May2000

No.6 ITMonitoring Apr.2002

(b) Exposure Draft

Outsourcing Dec.2001

M International Education Standards for Professional Accountants

IFAC OperationalDate

FrameworkforInternationalEducationStatements

IES1 EntryRequirementstoaprogramofProfessionalAccountingEducation Jan.1,2005

IES2 ContentofProfessionalAccountingEducationPrograms Jan.1,2005

IES3 ProfessionalSkills Jan.1,2005

IES4 ProfessionalValues,EthicsandAttitudes Jan.1,2005

IES5 PracticalExperienceRequirements Jan.1,2005

IES6 AssessmentofProfessionalCapabilitiesandCompetence Jan.1,2005

IES7 ContinuingProfessionalDevelopment:AProgramofLifelongLearning Jan.1,2006andContinuingDevelopmentofProfessionalCompetence

IFAC IssueDate

N IFAC Code of Ethics for Professional Accountants Nov.2001

IASB IssueDate

O Status of International Financial Reporting Standards

PrefacetoInternationalFinancialReportingStandards Apr.2002

FrameworkforthePreparationandPresentationofFinancialStatements Apr.2001

Page 52

IASB OperationalDate

International Financial Reporting Standards (IFRSs)IFRS1 First-timeAdoptionofInternationalFinancialReportingStandards Jan.1,2004IFRS2 Share-basedPayment Jan.1,2005IFRS3 BusinessCombinations Mar.31,2004IFRS4 InsuranceContracts Jan.1,2005IFRS5 Non-currentAssetsHeldforSaleandDiscontinuedOperations Jan.1,2005IFRS6 ExplorationforandEvaluationofMineralResources Jan.1,2006IFRS7 FinancialInstruments:Disclosures Jan.1,2007

International Accounting Standards (IASs)

IAS1 PresentationofFinancialStatements Jul.1,1998IAS2 Inventories Jan.1,1995IAS7 CashFlowStatements Jan.1,1994IAS8 NetProfitorLossforthePeriod,FundamentalErrorsandChangesinAccountingPolicies Jan.1,1995IAS10 EventsAftertheBalanceSheetDate Jan.1,2000IAS11 ConstructionContracts Jan.1,1995IAS12 IncomeTaxes Jan.1,1998IAS14 SegmentReporting Jul.1,1998IAS16 Property,PlantandEquipment Jul.1,1999IAS17 Leases Jan.1,1999IAS18 Revenue Jan.1,1995IAS19 EmployeeBenefits Jan.1,2003IAS20 AccountingforGovernmentGrantsandDisclosureofGovernmentAssistance Jan.1,1984IAS21 TheEffectsofChangesinForeignExchangeRates Jan.1,1995IAS23 BorrowingCosts Jan.1,1995IAS24 RelatedPartyDisclosures Jan.1,1986IAS26 AccountingandReportingbyRetirementBenefitPlans Jan.1,2003IAS27 ConsolidatedFinancialStatementsandAccountingforInvestmentsinSubsidiaries Jan.1,1990IAS28 AccountingforInvestmentsinAssociates Jan.1,1990IAS29 FinancialReportinginHyperinflationaryEconomies Jan.1,1990IAS31 FinancialReportingofInterestsinJointVentures Jan.1,1992IAS32 FinancialInstruments:DisclosureandPresentation(Revised2003) Jan.1,2005IAS33 EarningsPerShare Jan.1,1998IAS34 InterimFinancialReporting Jan.1,1999IAS36 ImpairmentofAssets(Revised2004) Mar.31,2004IAS37 Provisions,ContingentLiabilitiesandContingentAssets Jul.1,1999IAS38 IntangibleAssets(Revised2004) Mar.31,2004IAS39 FinancialInstruments:RecognitionandMeasurement(Revised2003) Jan.1,2005IAS40 InvestmentProperty Jan.1,2001IAS41 Agriculture Jan.1,2003GlossaryofTerms

Page 53

NOTES :

(1) ApprovedAccountingStandardscomprise:

(a) MASBStandardsissuedbytheMalaysianAccountingStandardsBoard(MASB).

(b) ExtantInternationalFinancialReportingStandards(IFRS)adoptedbytheMICPAand/ortheMASB.

(c) ExtantMalaysianAccountingStandards(MAS)issuedbytheMICPAand/oradoptedbytheMASB.

MASBTechnicalReleases(TR)presenttheMASB’sviewsontheappropriateaccountingtreatmentanddisclosures. TRisanauthoritativestatementthatmaynothavethelegalstandingofaMICPAstandardbutnonetheless,itsapplication wouldbeconsideredmandatory.

TechnicalBulletinsandotherstatementsissuedbytheCounciloftheMICPArelatingtoaccountingaretoberegardedas opinionsonbestcurrentpracticeandthusformpartofgenerallyacceptedaccountingprinciples(GAAP).

(2) ApprovedAuditingStandardscomprise:

(a) InternationalStandardsonAuditing(ISA),InternationalStandardsonAssuranceEngagements(ISAE),International StandardsonReviewEngagements(ISRE)andInternationalStandardsonRelatedServices(ISRS)adoptedbythe MICPA

(b) MalaysianAuditingGuidelines(MAG)issuedbytheMICPA

Toenhancethestatusoftheinternationalauditingpronouncements,InternationalAuditingGuidelines(IAG)hasbeen redesignatedasInternationalStandardsonAuditing(ISA).

AuditingTechnicalReleasesandotherstatementsissuedbytheCouncilof theMICPArelatingtoauditingaretobe regardedasopinionsonthebestcurrentpracticeandthusformpartofgenerallyacceptedauditingstandards(GAAS).

(3) MASBStandardsareissuedbytheMalaysianAccountingStandardsBoard(MASB)establishedundertheFinancial ReportingAct1997.

(4) InternationalFinancialReportingStandards(IFRS)areissuedbytheInternationalAccountingStandardsBoard(IASB)andISA,ISAE,ISRE,ISRSareissuedbytheInternationalAuditingandAssuranceStandardsBoard(IAASB)oftheInternationalFederationofAccountants(IFAC).

IASBisthestandard-settingbodyoftheInternationalAccountingStandardsCommitteeFoundation(IASCF)andhas soleresponsibilityforsettingaccountingstandards.

IAASBisestablishedbytheIFACBoardtodevelopandissue,underitsownauthority,standardsonauditing,assurance andrelatedservicesengagements.

(5) TheMICPAconsidersallMASBStandards,ISA,ISAE,ISRE,ISRSandInternationalAuditingPracticeStatements (IAPS)forcompliancebymembers.IfthoughtappropriatetheyareissuedwithMICPAForewordasalocalexposure draftbeforeformaladoption.

(6) TheoperationaldatereferstofinancialstatementsforperiodsbeginningJanuary1oftheyearspecified.

(7) StatementsonInternationalManagementAccounting(IMAP)areissuedbytheFinancialandManagementAccounting Committee(FMAC)ofIFAC.TheseStatementsareintwoforms:

(a) InternationalManagementAccountingPractices

(b) InternationalManagementAccountingStudies

TheMICPAconsidersallIMAPforissuancetomembersforguidance.

(8) InternationalPublicSectorAccountingStandards,GuidelinesandStudiesareissuedbythePublicSectorCommittee (PSC)ofIFAC.

(9) MICPAGuidelinesforAccountinginPublicSector(GAPS)areissuedbytheCounciloftheMICPAandtheyaretobe regardedasopinionsonbestcurrentpracticerelatingtoaccountinginthepublicsector.

(10) MICPAInsolvencyGuidanceNotes(IG)areissuedbytheCounciloftheMICPAandtheyaretoberegardedasgood practiceinstatedareasofinsolvency.

(11) MICPAtechnicalpronouncementsaregivenanalphabeticalreferenceintheirdraftform(eg.MASC).Ontheirissueas definitivepronouncementsorexposuredrafts,anumericalreferenceisapplied.

(12) Upon its inception in2001, theInternationalAccountingStandardsBoard(IASB)adopted thebodyof International AccountingStandards(IASs)issuedbyitspredecessor,theInternationalAccountingStandardsCommittee(IASC).

Page 54

The Council hereby submit their report and the audited financial statements of the Institute for the financial year ended December 31, 2005.

PRINCIPAL ACTIVITY

The principal activity of the Institute is the advancement of the accountancy profession. There has been no significant change in this activity during the financial year.

RESULTS

RM Net operating deficit for the financial year 97,215

DIVIDENDS

In accordance with the Memorandum of Association, no dividends are payable to the members of the Institute.

RESERVES AND PROVISIONS

There were no material transfers to or from provisions during the financial year. The Institute does not have any reserve accounts.

BAD AND DOUBTFUL DEBTS

Before the income statement and balance sheet of the Institute were made out, the Council took reasonable steps to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and had satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts.

At the date of this report, the Council is not aware of any circumstances which would render the amount written off for bad debts or the amount of the allowance for doubtful debts in the financial statements of the Institute inadequate to any material extent.

CURRENT ASSETS

Before the income statement and balance sheet of the Institute were made out, the Council took reasonable steps to ensure that any current assets which were unlikely to realise in the ordinary course of activities their values as shown in the accounting records of the Institute have been written down to an amount that they might be expected to realise.

At the date of this report, the Council is not aware of any circumstances that would render the values attributed to the current assets in the financial statements of the Institute misleading.

VALUATION METHODS

At the date of this report, the Council is not aware of any circumstances which have arisen which would render adherence to the existing methods of valuation of assets or liabilities in the financial statements of the Institute misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

At the date of this report, there does not exist:-

(i) any charge on the assets of the Institute that has arisen since the end of the financial year which secures the liabilities of any other person; or

(ii) any contingent liability in respect of the Institute that has arisen since the end of the financial year.

No contingent liability or other liability of the Institute has become enforceable, or is likely to become enforceable, within the period of twelve months after the end of the financial year which, in the opinion of the Council, will or may substantially affect the ability of the Institute to meet its obligations as and when they fall due.

CHANGE OF CIRCUMSTANCES

At the date of this report, the Council is not aware of any circumstances, not otherwise dealt with in this report or the financial statements of the Institute, that would render any amount stated in the financial statements misleading.

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Institute for the financial year were not, in the opinion of the Council, substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Council, to affect substantially the results of the operations of the Institute for the financial year in which this report is made.

Report of the Council for the year ended December 31, 2005

Page 55

COUNCIL

The Council members who served since the date of the last report are:-

Dato’ Ab Halim MohyiddinDato’ Nordin Baharuddin Abdul Jabbar Abdul MajidDatuk Dr Abdul Samad Hj AliasDato’ Ahmad Johan bin Mohammad Raslan Ahmad Mustapha GhazaliBeh Tok Koay Chin Kwai FattDatin Hjh Fadzilah bte SaadHo Heng Chuan Khor Chin PengLim Kian ThiamLim Kok BengLim Tian Huat Lim Thiam Kee Loh Lay ChoonDato’ Hj Maidin bin Syed Ali Mohamed Raslan Abdul Rahman Ng Kim Tuck (Appointed on June 25, 2005) Poon Yew HoePushpanathan A/L S A KanagarayarSam Soh Siong HoonSukanta Kumar Dutt Tan Chin Hock Tan Ghee KiatTeh Chee Ghee Dr Veerinderjeet SinghVenkatramanan ViswanathanDato’ Yeo HowDatuk Robert Yong Kuen Loke

In accordance with the bye-laws of the Institute, the following Council members retire at the Annual General Meeting and, being eligible, offer themselves for re-elections:

Pursuant to bye-law 5

Datuk Dr Abdul Samad Hj AliasLim Tian HuatMohamed Raslan Abdul RahmanPushpanathan A/L S A KanagarayarDato’ Yeo How

Pursuant to bye-law 13

Ahmad Mustapha GhazaliDr Veerinderjeet Singh

The following Council members also retire at the Annual General Meeting pursuant to bye-law 5 but do not wish to seek re-election:

Khor Chin Peng Lim Kian Thiam Lim Kok Beng

The following nomination have been received for election to the Council in accordance with bye-law 7:


COUNCIL MEMBERS’ BENEFITS

The Institute is a company limited by guarantee and thus has no shares in which the Council members could have an interest. The Institute has also not issued any debentures.

Since the end of the previous financial year, no Council member of the Institute has received or become entitled to receive any benefit (other than a benefit in terms of examiner’s fee received by a Council member as disclosed in the financial statements) by reason of a contract made by the Institute or a related corporation with the Council member or with a firm of which the Council member is a member, or with a company in which the Council member has a substantial financial interest.

Neither during nor at the end of the financial year, was the Institute a party to any arrangements whose object is to enable the Council members to acquire benefits by means of the acquisition of shares in or debentures of any body corporate.

AUDITORS

Tan Kim Leong, JP and Siew Kah Toong retire as auditors of the Institute at the Annual General Meeting pursuant to bye-law 129 and in accordance with bye-law 130, they are deemed to be nominated for re-appointment as auditors for the ensuing financial year.

On behalf of the Council,

Dato’ Ab Halim Mohyiddin President

Dato’ Nordin Baharuddin Vice-President

Kuala Lumpur May 29, 2006

Page 56

Balance Sheet as at December 31, 2005 2005 2004

Note RM RM

Non-Current Assets

Plant and equipment 6 90,522 84,106 Development costs of study manuals 7 253,814 377,721 Advances to MACPA Educational Trust Fund 8 95,230 128,395

Current Assets

Study manuals, at cost 9,270 15,945 Receivables, prepayments and deposits 9 529,486 527,515 Fixed deposits 10 150,000 255,000 Cash and bank balances 53,615 35,559

742,371 834,019

Current Liabilities

Fees in advance 70,557 168,968 Payables and accruals 11 899,156 836,167 Term loan (secured) 12 110,396 109,744 Tax liabilities 2,707 2,553

1,082,816 1,117,432

Net Current Liabilities (340,445) (283,413)

99,121 306,809

Accumulated Fund/(Deficit)

Balance at January 1 (109,423) (270,650) Net operating (deficit)/surplus for the financial year (97,215) 161,227

Balance at December 31 (206,638) (109,423)

Non-Current Liability

Term loan (secured) 12 305,759 416,232

99,121 306,809

The above Balance Sheet is to be read in conjunction with the notes to the financial statements on pages 60 to 70.

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Income Statement for the financial year ended December 31, 2005 2005 2004

Note RM RM

Income

Members’ annual fees 1,210,937 1,198,937 Examination fees 130,620 119,145 Practising certificate fees 212,200 212,675 Students’ exemption fees 102,000 89,100 Students’ annual fees 76,825 72,125 Members’ admission fees 35,070 46,560 Students’ registration and transfer fees 88,585 58,088 Provisional members’ fees 19,150 20,200

1,875,387 1,816,830

Income from Other Activities 13 1,369,250 1,215,093

Other Income 14 29,142 80,441

3,273,779 3,112,364

Operating Expenses 15 (2,471,625) (2,142,996)

Expenses of Other Activities 13 (863,288) (768,445)

(61,134) 200,923

Finance Cost 16 (35,836) (39,452)

Operating (Deficit)/Surplus Before Tax (96,970) 161,471

Tax Expense 17 (245) (244)

Net Operating (Deficit)/Surplus for the Financial Year (97,215) 161,227

The above Income Statement is to be read in conjunction with the notes to the financial statements on pages 60 to 70.

Page 58

Statement of Recognised Gains and Losses for the financial year ended December 31, 2005

2005 2004 RM RM

Net operating (deficit)/surplus for the financial year (97,215) 161,227

The above Statement of Recognised Gains and Losses is to be read in conjunction with the notes to the financial statements on pages 60 to 70.

Page 59

Cash Flow Statement for the financial year ended December 31, 2005 2005 2004

Note RM RM

Cash Flows from Operating Activities

Cash receipts Subscriptions 1,759,648 1,883,094 Examination fees 131,495 119,145 Journal and publications 16,754 43,889 Seminars 579,838 530,714 Tutorial courses – 10,350 Study manuals 149,822 123,537 Examination workshops 374,542 266,900 Others 156,750 180,517

Cash payments Operating expenses (3,178,783) (2,941,594) Tax paid (91) (153) Fees in advance (16,687) (5,944) Study manuals (22,126) (14,074)

Net cash (used in)/generated from operating activities (48,838) 196,381

Cash Flows from Investing Activities

Development cost of study manuals (6,000) (7,117) Purchase of plant and equipment 6 (36,153) (19,371) Interest received from fixed deposits 11,718 10,141 Advances to MACPA Educational Trust Fund (62,835) (88,041) Repayment from MACPA Educational Trust Fund 96,000 171,000

Net cash generated from investing activities 2,730 66,612

Cash Flows from Financing Activity

Term loan interest paid (35,836) (39,820)

Net cash used in financing activity (35,836) (39,820)

Net (Decrease)/Increase in Cash and Cash Equivalents (81,944) 223,173

Cash and Cash Equivalents at Beginning of the Financial Year 285,559 62,386

Cash and Cash Equivalents at End of the Financial Year 18 203,615 285,559

The above Cash Flow Statement is to be read in conjunction with the notes to the financial statements on pages 60 to 70.

Page 60

Notes to the Financial Statements December 31, 20051. GENERAL INFORMATION

The Institute is a company limited by guarantee, incorporated and domiciled in Malaysia.

The registered office and principal place of business of the Institute is located at No. 15, Jalan Medan Tuanku, 50300 Kuala Lumpur.

The number of employees at the end of the financial year is 21 (2004: 21).

The financial statements are presented in Ringgit Malaysia.

2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The main risks arising from the Institute’s activities are credit risk, liquidity risk and interest rate risk. The Council reviews and agrees policies for managing each of these risks and they are summarised below:

Credit Risk

Receivables and transactions with banking institutions may give rise to credit risk which requires the loss to be recognised if a counter party fails to perform as contracted. The counter parties are licensed banking institutions and professional organisations. It is the policy of the Institute to monitor the financial standing of these counter parties on an ongoing basis to ensure that the Institute is exposed to minimal credit risk.

Liquidity Risk

The Institute practises prudent liquidity risk management to minimise the mismatch of financial assets and liabilities and to maintain sufficient credit facilities for contingent funding requirements of working capital.

Interest Rate Risk

The Institute ensures that it obtains borrowings and places fixed deposits at competitive rates under the most favourable terms and conditions. Currently, the only borrowing is a term loan that bears interest at 1.5% above the bank’s base lending rate per annum on monthly rests.

The Institute is also exposed to interest rate risk in respect of its fixed deposits with a licensed bank.

3. PRINCIPAL ACTIVITY

The Institute is principally engaged in the advancement of the accountancy profession.

There has been no significant change in the nature of this activity during the financial year.

4. BASIS OF PREPARATION

The financial statements have been prepared under the historical cost convention unless otherwise indicated in the significant accounting policies. The financial statements comply with MASB approved accounting standards and the provisions of the Companies Act, 1965.

The preparation of financial statements in conformity with MASB approved accounting standards and the provisions of the Companies Act, 1965 requires the Council to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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5. SIGNIFICANT ACCOUNTING POLICIES

(a) Income and Expense Recognition

Membership and Students Fees

(i) The subscription year of the Institute is January 1 to December 31. Membership and students’ annual fees are payable annually in advance. Only those membership and students’ annual fees which are attributable to the current financial year are recognised as income. Fees relating to periods beyond the current financial year are shown in the balance sheet as Fees in Advance under the heading Current Liabilities.

(ii) Membership admission and students’ registration fees are recognised upon approval of the respective applications.

(iii) Examination and exemption fees are recognised upon approval of the respective applications.

Interest Income

Interest income is recognised on the effective yield basis.

Other Activities

Other activities include providing continuing professional education courses, conducting examination workshops and tutorial courses for students, sale of publications and MICPA study manuals and organising other professional development and students activities.

The policies of the Institute with respect to the recognition of income and expenses on such activities are as follows:-

(i) To the extent that activities are completed on or before the balance sheet date, any surplus or deficit is recognised in the income statement.

(ii) To the extent that activities take place after the end of the financial year, any income received and expense incurred is recognised in the balance sheet.

(iii) Income for sale of publications and MICPA study manuals is recognised when physical control of the materials passes to the purchasers.

(iv) The cost of publications, other than study manuals, is recognised in the income statement in the financial year it is incurred.

Expenses on other activities relate to identifiable direct expenses.

(b) Plant and Equipment and Depreciation

Plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.

Depreciation is calculated on a straight line basis to write off the cost of the plant and equipment over their estimated useful lives. The annual rates of depreciation adopted are as follows:-

Furniture and fittings 10% Security system 10% Office equipment 20% Computers 33%

Plant and equipment which have been fully depreciated are recorded at a nominal value of RM1.00.

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5. SIGNIFICANT ACCOUNTING POLICIES (continued)

The carrying amounts of plant and equipment are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amounts are estimated. The impairment loss is charged to the income statement as soon as foreseeable. Conversely, the impairment loss will be reversed up to the cumulative amount previously charged to the income statement, once the indicator for impairment ceases to exist.

(c) Study Manuals

The costs of development of the MICPA study manuals are capitalised and amortised on a straight line basis over the economic life of the study manuals.

Stocks of study manuals are stated at the lower of cost and net realisable value. Cost is determined on a first-in, first-out basis and consists of printing cost.

(d) Receivables

Receivables are carried at anticipated realisable value. Bad debts are written off when identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance sheet date.

(e) Payables

Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received.

(f) Provisions

Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

(g) Employee Benefits

Short-term employee benefits

Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-monetary benefits are recognised as an expense in the year in which the associated services are rendered by employees of the Institute.

Accumulating compensated absences such as paid annual leave are recognised as an expense when services are rendered by employees that increase their entitlement to future compensated absences. Non-accumulating compensated absences such as sick leave are recognised when the absences occur.

Defined contribution plans

The Institute makes contributions to the Employees Provident Fund (“EPF”). The contributions are recognised as an expense in the year to which they relate.

(h) Income Tax

Income tax on the surplus or deficit for the year comprises current and deferred tax.

Current tax expense is the expected amount of income taxes payable in respect of the taxable surplus for the year and is determined using the tax rates that have been enacted at the balance sheet date.

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5. SIGNIFICANT ACCOUNTING POLICIES (continued)

Deferred tax is provided, using the liability method, on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, using the tax rates enacted or substantively enacted at the balance sheet date.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred tax assets and the deferred tax liabilities relate to the income taxes levied by the same taxation authority.

(i) Foreign Currency Transactions

Transactions in foreign currencies are translated into Ringgit Malaysia at rates of exchange ruling at the date of the transaction and where settlements have not taken place by the financial year end, at the exchange rates ruling at that date. Foreign exchange differences arising from translations are taken to the income statement.

The closing rates used in the translation of foreign currency amounts are as follows:-

2005 2004 RM RM

1 US Dollar (USD) 3.78 3.80 1 Sterling Pound 6.52 7.32 1 Australian Dollar (AUD) 2.77 2.96

(j) Borrowing Cost

Interest relating to a financial instrument, classified as a financial liability, is reported as finance cost in the income statement.

(k) Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, bank balances and short-term, highly liquid investments that are readily convertible to cash and which are subject to an insignificant risk of changes in value.

(l) Financial Instruments

Term loan is recorded at the amount of proceeds received, net of transaction cost.

The accounting policies for other financial instruments are disclosed in the individual policies associated with each item.

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6. PLANT AND EQUIPMENT

Office Furniture Security 2005 equipment and fittings system Computers Total RM RM RM RM RM

Cost

As at January 1 297,008 119,097 5,415 174,559 596,079 Additions 26,580 95 – 9,478 36,153

As at December 31 323,588 119,192 5,415 184,037 632,232

Accumulated depreciation

As at January 1 285,283 58,811 2,998 164,881 511,973 Charge for the financial year 9,372 8,016 302 12,047 29,737

As at December 31 294,655 66,827 3,300 176,928 541,710

Net book value

As at December 31 28,933 52,365 2,115 7,109 90,522

Office Furniture Security 2004 equipment and fittings system Computers Total RM RM RM RM RM

Cost

As at January 1 283,678 114,551 5,415 173,064 576,708 Additions 13,330 4,546 – 1,495 19,371

As at December 31 297,008 119,097 5,415 174,559 596,079


As at January 1 278,584 50,683 2,696 152,258 484,221 Charge for the financial year 6,699 8,128 302 12,623 27,752

As at December 31 285,283 58,811 2,998 164,881 511,973

Net book value

As at December 31 11,725 60,286 2,417 9,678 84,106

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7. DEVELOPMENT COSTS OF STUDY MANUALS

2005 2004 RM RM

Development costs 617,024 614,024 Accumulated amortisation (363,210) (236,303)

253,814 377,721

8. ADVANCES TO MACPA EDUCATIONAL TRUST FUND

The amount represents advances made by the Institute which are unsecured, interest free and have no fixed terms of repayment. There is no intention to demand for full repayment within the next twelve months.

9. RECEIVABLES, PREPAYMENTS AND DEPOSITS

2005 2004 RM RM

Receivable from Budget Commentary 2006/2005 108,621 99,976 Receivable from NACRA competition 2,944 26,300 Subscriptions receivable 305,468 201,978 Other receivables 103,750 107,641 Tax recoverable 2,416 2,416 Advance payment to education consultant for review of MICPA qualification – 93,660 Other prepayments 16,687 5,944 Deposits 7,350 7,350

547,236 545,265 Allowance for doubtful debts (17,750) (17,750)

529,486 527,515

The credit terms of subscriptions receivables are 30 days.

10. FIXED DEPOSITS

2005 2004 RM RM

Deposit with licensed bank (Note 18) – 5,000 Fixed deposits with a licensed bank 150,000 – Fixed deposits with a licensed finance company – 250,000

150,000 255,000

The deposit of RM5,000 is held on lien by a licensed bank to secure a bank guarantee for postal facilities in the previous financial year.

The weighted average interest rate during the financial year for fixed deposits with a licensed bank is 3% (2004: 3%) per annum.

The fixed deposits have an average maturity of 90 days (2004: 90 days).

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11. PAYABLES AND ACCRUALS

2005 2004 RM RM

Advances for study manuals 198,885 198,885 Due to students societies 143,923 127,510 Other payables 125,583 177,612 Accruals 430,765 332,160

899,156 836,167

12. TERM LOAN - SECURED

Repayable as follows:-

2005 2004 RM RM

Current - Within one year 110,396 109,744

Non-current - More than one year but less than five years 305,759 416,232

416,155 525,976

The term loan bears interest at 1.5% above the bank’s base lending rate per annum. The term loan is fully drawndown in December 2004 and is repayable by sixty monthly instalments of RM12,138 each, commencing from January 2005. The weighted average interest rate during the financial year is 7.5% (2004: 7.5%) per annum.

The repayable amount of term loan within one year totalling RM110,396 relates to the principal sum only.

The term loan is secured by:-

(i) Negative pledge over the assets of MICPA.

(ii) Lienholder’s caveat over the property of MACPA Educational Trust Fund situated at No. 15, Jalan Medan Tuanku, 50300 Kuala Lumpur.

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13. OTHER ACTIVITIES Surplus/

Income Expenses (Deficit) 2005 RM RM RM

Accountancy week 23,755 35,998 (12,243) Examination workshops 375,167 279,415 95,752 Continuing professional education 333,855 157,730 176,125 Annual dinner 75,790 80,731 (4,941) Commemorative lecture and luncheon 30,120 37,786 (7,666) MICPA excellence awards 10,360 22,288 (11,928) Journal and publications 11,554 4,255 7,299 Informal gatherings 2,350 2,275 75 MICPA study manuals 149,822 155,708 (5,886) Business forum 245,983 85,925 160,058

1,258,756 862,111 396,645

Joint activities with other bodies: NACRA Competition – 1,177 (1,177)

Budget Commentary 2006 102,200 – 102,200 Joint seminars 5,598 – 5,598 Forum on International Education Standards 2,696 – 2,696

110,494 1,177 109,317

1,369,250 863,288 505,962

Surplus/ Income Expenses (Deficit) 2004 RM RM RM

Examination workshops 266,900 189,721 77,179 Continuing professional education 305,214 153,866 151,348 Tutorial courses 10,350 2,400 7,950 Annual dinner 63,470 75,535 (12,065) Commemorative lecture and luncheon 33,680 50,435 (16,755) MICPA excellence awards 11,090 23,290 (12,200) Journal and publications 8,689 5,612 3,077 Informal gatherings 10,875 8,341 2,534 MICPA study manuals 123,537 136,256 (12,719) Business forum 225,500 64,473 161,027 MICPA golf tournament 49,858 50,515 (657)

1,109,163 760,444 348,719

Joint activities with other bodies: NACRA Competition – 5,147 (5,147)

Budget Commentary 2005 102,200 – 102,200 Joint seminars 3,730 – 3,730 Forum on International Education Standards – 2,854 (2,854)

105,930 8,001 97,929

1,215,093 768,445 446,648

Expenses on the above activities relate to identifiable direct expenses only and do not include overhead expenses.

The expenses for MICPA study manuals include the amortisation of the development costs for the study manuals amounting to RM126,907 (2004: RM129,907).

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14. OTHER INCOME 2005 2004

RM RM

Contribution by members – 69,575 Advertisements in MICPA website – 500 Interest on fixed deposits 12,329 7,201 Fines received from disciplinary proceedings 12,375 1,080 Sale of mailing labels 1,838 1,950 Others 2,600 135

29,142 80,441

15. OPERATING EXPENSES 2005 2004

RM RM

Advertisement expenses 11,325 4,205 AGM and Council meeting expenses 4,966 4,830 Auditors’ remuneration 6,300 6,300 Bad debts written off 35,955 40,543 Bank charges 3,611 1,986 Brand development programme 51,500 – Depreciation 29,736 27,752 Direct examination expenses 88,287 93,935 Electricity and water 26,038 22,436 General expenses 7,547 9,068 Insurance 6,402 5,623 Journal and technical pronouncements 135,155 145,086 Legal and professional fees 10,590 23,448 Maintenance 17,079 7,710 Medical expenses 4,302 4,482 Office rental 96,000 96,000 Periodicals and library stock 4,338 6,756 Postage and telephone 111,332 79,259 Printing and stationery 64,877 82,133 Professional development expenses 158,844 155,661 Publication of students’ course materials 9,300 8,382 Review of MICPA qualification 161,701 18,812 Staff costs - Employees’ Provident Fund and SOCSO 190,006 172,680 - Salaries and bonus 1,187,345 1,046,788 Staff recreation fund 3,000 5,941 Subscriptions to international accountancy bodies 22,452 51,223 Travelling expenses 23,637 21,957

2,471,625 2,142,996

The direct examination expenses include an amount of RM2,147 (2004: RM2,243) in respect of examiners fee paid to a Council member.

16. FINANCE COST 2005 2004

RM RM

Term loan interest 35,836 39,452

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17. TAX EXPENSE

For tax purposes, the Institute is treated as a “Trade Association” under section 53(3) of the Income Tax Act, 1967 under which its income is taxed at scale rates.

2005 2004 RM RM

Current tax expense 245 91 Underprovision in prior year – 153

245 244

Taxation has been provided for the interest income earned by the Institute.

The numerical reconciliation between the effective tax rate and the applicable tax rate of the Institute is as follows:

2005 2004 % %

Applicable tax rate (28.00) 28.00

Tax effect in respect of: Non taxable income – (0.02) Utilisation of unabsorbed capital allowances and tax losses (4.16) (26.79) Non allowable expenses 35.71 0.01 Reduction in statutory tax rate (3.30) (1.15)

0.25 0.05

Income tax – prior year – 0.09

Effective tax rate 0.25 0.14

Deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:-

2005 2004 RM RM

Unused tax losses 263,330 166,784 Unabsorbed capital allowances – 9,080

263,330 175,864

The unused tax losses and unabsorbed capital allowances are available indefinitely for offset against future taxable profits of the Institute subject to agreement of the Inland Revenue Board. Deferred tax assets have not been recognised in respect of these items as it is not probable that future taxable profits will be available against which the deductible temporary differences can be utilised.

Page 70

18. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash in hand and balances with banks and fixed deposits. Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts:-

2005 2004 RM RM

Fixed deposits 150,000 255,000 Cash and balances with banks 53,615 35,559

203,615 290,559 Less: Deposit with licensed bank under lien (Note 10) – (5,000)

203,615 285,559

19. FINANCIAL INSTRUMENTS

Credit Risk

As at December 31, 2005, the Institute has subscriptions receivable of RM305,468 which have been outstanding for more than 30 days and bank balances and deposits of RM202,615 with some major licensed banking institutions in Malaysia. Other than as mentioned, the Institute has no significant concentration of credit risk. The maximum exposures to credit risk are represented by the carrying amounts of the financial assets in the balance sheet.

Fair Values

The carrying amounts of the financial instruments of the Institute as at December 31, 2005 approximate their fair values due to the relatively short term maturity of these financial instruments.

20. COMPARATIVE FIGURES

Certain comparative figures have been reclassified to conform with current year’s presentation.

21. AUTHORISATION FOR ISSUE OF FINANCIAL STATEMENTS

These financial statements were authorised for issue by the Council on May 29, 2006.

Page 71

Statement by Council MembersIn the opinion of the Council Members, the financial statements set out on pages 56 to 70 have been drawn up in accordance with MASB approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Institute as at December 31, 2005 and of its results and cash flows for the financial year ended on that date.

On behalf of the Council Members,

Dato’ Ab Halim Mohyiddin President

Dato’ Nordin Baharuddin Vice-President


Statutory DeclarationI, Tan Shook Kheng, being the officer primarily responsible for the financial management of The Malaysian Institute of Certified Public Accountants, do solemnly and sincerely declare that the financial statements set out on pages 56 to 70 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed ) Tan Shook Kheng ) at Kuala Lumpur this ) 29th day of May, 2006

Before me:-

Page 72

Report of the Auditors to the Members of The Malaysian Institute of Certified Public Accountants (3246-U) (Institut Akauntan Awam Bertauliah Malaysia)

We have audited the financial statements set out on pages 56 to 70.

These financial statements are the responsibility of the Council.

It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility towards any other person for the content of this report.

We conducted our audit in accordance with approved standards on auditing in Malaysia. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Council, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion:-

(a) the financial statements have been properly drawn up in accordance with MASB approved accounting standards and the Companies Act, 1965 so as to give a true and fair view of:-

(i) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of the Institute; and

(ii) the state of affairs of the Institute as at December 31, 2005 and of its results and cash flows for the financial year then ended; and

(b) the accounting and other records and the registers required by the Act to be kept by the Institute have been properly kept in accordance with the provisions of the said Act.

Tan Kim Leong, JP 235/06/07 (J/PH) Chartered Accountant

Siew Kah Toong 1045/03/08 (J) Chartered Accountant


Page 73

Penyata Kewangan 2005

Page 75

Majlis dengan sukacitanya membentangkan laporan dan penyata kewangan teraudit Institut bagi tahun kewangan berakhir 31 Disember 2005.

KEGIATAN UTAMA

Kegiatan utama Institut ialah memajukan profesion perakaunan. Dalam tahun kewangan, tidak berlaku sebarang perubahan yang ketara dalam kegiatan ini.

KEPUTUSAN KEWANGAN

RM Defisit kendalian bersih bagi tahun kewangan 97,215

DIVIDEN

Menurut Memorandum Pertubuhan, tiada dividen akan dibayar kepada ahli-ahli Institut.

REZAB DAN PERUNTUKAN

Sepanjang tahun ini, tiada sebarang pindahan penting kepada atau daripada peruntukan. Institut tidak mempunyai sebarang akaun rezab.

HUTANG LAPUK DAN HUTANG RAGU

Sebelum penyata pendapatan dan kunci kira-kira Institut disediakan, Majlis telah mengambil langkah yang wajar untuk menentukan bahawa tindakan sepatutnya berhubung dengan penghapuskiraan hutang lapuk telah diambil dan elaun hutang ragu dibuat dan mereka berpuashati bahawa kesemua hutang lapuk yang diketahui telah dihapuskira dan elaun yang mencuckupi telah diberikan untuk hutang ragu.

Pada tarikh laporan ini, Majlis tidak mengetahui adanya sebarang keadaan yang boleh menyebabkan jumlah hutang lapuk yang dihapuskirakan atau jumlah elaun hutang ragu yang diperuntukkan dalam penyata kewangan Institut tidak mencukupi secara bermakna.

ASET SEMASA

Sebelum penyata pendapatan dan kunci kira-kira Institut disediakan, Majlis telah mengambil langkah yang munasabah untuk menentukan bahawa aset semasa yang mungkin tidak dapat menghasilkan nilainya dalam perjalanan aktiviti biasa, sepertimana dinyata dalam rekod perakaunan Institut telahpun dikurangkan nilainya kepada amaun yang dijangka dapat dihasilkan.

Pada tarikh laporan ini, Majlis tidak mengetahui adanya sebarang keadaan yang boleh menyebabkan nilai bagi aset semasa dalam penyata kewangan Inst i tut mengelirukan.

KAEDAH PENILAIAN

Pada tarikh laporan ini, Majlis tidak mengetahui adanya sebarang keadaan yang timbul yang boleh mengakibatkan pematuhan kepada kaedah yang sedia ada bagi penilaian aset atau liabiliti dalam penyata kewangan Institut mengelirukan atau tidak sesuai.

LIABILITI LUAR JANGKA DAN LIABILITI LAIN

Pada tarikh laporan ini, tidak terdapat :-

(i) sebarang gadaian ke atas aset Institut yang telah diwujudkan semenjak akhir tahun kewangan yang mencagarkan liabiliti mana-mana perseorangan lain, atau

(ii) sebarang liabiliti luar jangka berhubung dengan Institut yang timbul semenjak akhir tahun kewangan.

Tidak ada liabiliti luar jangka atau liabiliti lain Institut yang akan berkuatkuasa atau mungkin dikuatkuasakan dalam tempoh dua belas bulan berikutan akhir tahun kewangan ini yang, pada pendapat Majlis, akan atau mungkin memberi kesan yang bermakna terhadap keupayaan Institut untuk menyelesaikan tanggungan-tanggungannya apabila tiba masanya.

PERUBAHAN KEADAAN

Pada tarikh laporan ini, Majlis tidak mengetahui adanya sebarang keadaan yang tidak ditangani dalam laporan ini atau dalam penyata kewangan Institut, yang akan menyebabkan mana-mana amaun yang dinyatakan dalam penyata kewangan mengelirukan.

BUTIRAN LUARBIASA

Pada pendapat Majlis, hasil kendalian Institut bagi tahun kewangan tidak dipengaruhi secara bermakna oleh sebarang butiran, urus niaga atau kejadian penting dan luarbiasa.

Dalam jangka masa di antara akhir tahun kewangan dan tarikh laporan ini, tiada timbul sebarang butiran, urusniaga atau kejadian penting dan luarbiasa yang, pada pendapat Majlis, akan memberi kesan bermakna ke atas hasil kendalian Institut bagi tahun kewangan dalam mana laporan ini dibuat.

Laporan Majlis bagi tahun berakhir 31 Disember 2005

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MAJLIS

Ahli-ahli Majlis yang berkhidmat sejak tarikh laporan terakhir ialah:-

Dato’ Ab Halim bin MohyiddinDato’ Nordin Baharuddin Abdul Jabbar Abdul MajidDatuk Dr Abdul Samad Hj AliasDato’ Ahmad Johan bin Mohammad Raslan Ahmad Mustapha GhazaliBeh Tok Koay Chin Kwai FattDatin Hjh Fadzilah bte SaadHo Heng Chuan Khor Chin PengLim Kian ThiamLim Kok BengLim Tian Huat Lim Thiam Kee Loh Lay ChoonDato’ Hj Maidin bin Syed Ali Mohamed Raslan Abdul Rahman Ng Kim Tuck (Dilantik pada 25 Jun 2005) Poon Yew HoePushpanathan A/L S A KanagarayarSam Soh Siong HoonSukanta Kumar Dutt Tan Chin Hock Tan Ghee KiatTeh Chee Ghee Dr Veerinderjeet SinghVenkatramanan ViswanathanDato’ Yeo HowDatuk Robert Yong Kuen Loke

Menurut undang-undang kecil Institut, ahli-ahli Majlis berikut bersara pada Mesyuarat Agung Tahunan dan layak menawarkan diri mereka untuk dipilih semula:

Menurut undang-undang kecil 5

Datuk Dr Abdul Samad Hj AliasLim Tian HuatMohamed Raslan Abdul RahmanPushpanathan A/L S A KanagarayarDato’ Yeo How

Menurut undang-undang kecil 13

Ahmad Mustapha GhazaliDr Veerinderjeet Singh

Ahli-ahli Majlis berikut juga bersara pada Mesyuarat Agung Tahunan menurut undang-undang kecil 5 tetapi tidak ingin dipilih semula:

Khor Chin Peng Lim Kian Thiam Lim Kok Beng

Berikut adalah pencalonan yang telah diterima untuk dipilih ke Majlis mengikut undang-undang kecil 7:


MANFAAT AHLI-AHLI MAJLIS

Institut ini adalah sebuah syarikat berhad dengan jaminan dan oleh itu tidak mempunyai syer dalam mana ahli-ahli Majlis boleh mempunyai kepentingan. Institut juga tidak mengeluarkan sebarang debentur.

Sejak akhir tahun kewangan yang lepas, tiada seorang ahli Majlis Institut telah menerima atau berhak menerima sebarang manfaat (selain daripada manfaat dalam bentuk bayaran perkhidmatan pemeriksa yang diterima oleh seorang ahli Majlis seperti yang dinyatakan dalam penyata kewangan) akibat dari perjanjian yang dibuat oleh Institut atau syarikat berkaitan dengan ahli Majlis atau dengan firma di mana ahli Majlis adalah seorang ahli, atau dengan syarikat di mana ahli Majlis mempunyai kepentingan kewangan yang ketara.

Institut sama ada dalam tahun atau pada akhir tahun tidak mengambil bahagian dalam sebarang peraturan yang bertujuan untuk membolehkan ahli-ahli Majlis mendapat faedah melalui perolehan syer atau debentur dalam sebarang badan korporat.

JURUAUDIT

Tan Kim Leong, JP dan Siew Kah Toong akan bersara sebagai juruaudit Institut pada Mesyuarat Agung Tahunan menurut undang-undang kecil 129 dan mengikut undang-undang kecil 130, mereka dengan ini dicalonkan untuk perlantikan semula sebagai juruaudit untuk tahun yang berikutnya.

Bagi pihak Majlis,

Dato’ Ab Halim Mohyiddin Presiden

Dato’ Nordin Baharuddin Naib Presiden

Kuala Lumpur 29 Mei 2006

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Kunci Kira-kira pada 31 Disember 2005 2005 2004

Nota RM RM

Aset Bukan Semasa

Loji dan peralatan 6 90,522 84,106 Kos pembangunan buku panduan belajar 7 253,814 377,721 Pendahuluan kepada Tabung Amanah Pendidikan MACPA 8 95,230 128,395

Aset Semasa

Buku panduan belajar, pada kos 9,270 15,945 Penerimaan, prabayaran dan deposit 9 529,486 527,515 Simpanan tetap 10 150,000 255,000 Wang tunai dan baki di bank 53,615 35,559

742,371 834,019

Liabiliti Semasa

Yuran pendahuluan 70,557 168,968 Pemiutang dan akruan 11 899,156 836,167 Pinjaman berjangka (dijamin) 12 110,396 109,744 Cukai tanggungan 2,707 2,553

1,082,816 1,117,432

Liabiliti Semasa Bersih (340,445) (283,413)

99,121 306,809

Dana/(Defisit) Terkumpul

Baki pada 1 Januari (109,423) (270,650) (Defisit) / lebihan kendalian bersih bagi tahun kewangan (97,215) 161,227

Baki pada 31 Disember (206,638) (109,423)

Liabiliti Bukan Semasa

Pinjaman berjangka (dijamin) 12 305,759 416,232

99,121 306,809

Kunci Kira-kira di atas hendaklah dibaca bersama dengan nota kepada penyata kewangan di mukasurat 81 hingga 91.

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Penyata Pendapatan bagi tahun kewangan berakhir 31 Disember 2005 2005 2004

Nota RM RM

Pendapatan

Yuran tahunan ahli 1,210,937 1,198,937 Yuran peperiksaan 130,620 119,145 Yuran sijil pengamalan 212,200 212,675 Yuran pengecualian pelajar 102,000 89,100 Yuran tahunan pelajar 76,825 72,125 Yuran kemasukan ahli 35,070 46,560 Yuran pendaftaran dan pemindahan pelajar 88,585 58,088 Yuran ahli sementara 19,150 20,200

1,875,387 1,816,830

Pendapatan daripada Aktiviti Lain 13 1,369,250 1,215,093

Pendapatan Lain 14 29,142 80,441

3,273,779 3,112,364

Belanja Kendalian 15 (2,471,625) (2,142,996)

Belanja Aktiviti Lain 13 (863,288) (768,445)

(61,134) 200,923

Kos Kewangan 16 (35,836) (39,452)

(Defisit)/Lebihan Kendalian Sebelum Cukai (96,970) 161,471

Belanja Cukai 17 (245) (244)

(Defisit)/Lebihan Kendalian Bersih bagi Tahun Kewangan (97,215) 161,227

Penyata Pendapatan di atas hendaklah dibaca bersama dengan nota kepada penyata kewangan di mukasurat 81 hingga 91.

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Penyata Keungtungan dan Kerugian yang diiktiraf bagi tahun kewangan berakhir 31 Disember 2005 2005 2004

RM RM

(Defisit)/Lebihan kendalian bersih bagi tahun kewangan (97,215) 161,227

Penyata Keuntungan dan Kerugian yang diiktiraf di atas hendaklah dibaca bersama dengan nota kepada penyata kewangan di mukasurat 81 hingga 91.

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Penyata Aliran Tunai bagi tahun kewangan berakhir 31 Disember 2005 2005 2004

Nota RM RM

Aliran Tunai daripada Aktiviti Kendalian

Penerimaan tunai Yuran 1,759,648 1,883,094 Yuran peperiksaan 131,495 119,145 Jurnal dan penerbitan 16,754 43,889 Seminar 579,838 530,714 Kursus bimbingan – 10,350 Buku panduan belajar 149,822 123,537 Bengkel peperiksaan 374,542 266,900 Lain-lain 156,750 180,517

Bayaran Tunai Belanja kendalian (3,178,783) (2,941,594) Cukai dibayar (91) (153) Yuran pendahuluan (16,687) (5,944) Buku panduan belajar (22,126) (14,074)

Tunai bersih (diguna dalam)/terjana daripada aktiviti kendalian (48,838) 196,381

Aliran Tunai daripada Aktiviti Pelaburan

Kos pembangunan buku panduan belajar (6,000) (7,117) Pembelian loji dan peralatan 6 (36,153) (19,371) Faedah diterima daripada simpanan tetap 11,718 10,141 Pendahuluan kepada Tabung Amanah Pendidikan MACPA (62,835) (88,041) Pembayaran balik daripada Tabung Amanah Pendidikan MACPA 96,000 171,000

Tunai bersih terjana daripada aktiviti pelaburan 2,730 66,612

Aliran Tunai daripada Aktiviti Pembiayaan

Bayaran faedah untuk pinjaman berjangka (35,836) (39,820)

Tunai bersih diguna dalam aktiviti pembiayaan (35,836) (39,820)

(Kurangan)/Lebihan Bersih dalam Tunai dan Kesetaraan Tunai (81,944) 223,173

Tunai dan Kesetaraan Tunai pada Awal Tahun Kewangan 285,559 62,386

Tunai dan Kesetaraan Tunai pada Akhir Tahun Kewangan 18 203,615 285,559

Penyata Aliran Tunai di atas hendaklah dibaca bersama dengan nota kepada penyata kewangan di mukasurat 81 hingga 91.

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Nota Kepada Penyata Kewangan 31 Disember 20051. MAKLUMAT AM

Institut ini adalah sebuah syarikat berhad dengan jaminan, diperbadankan dan berdomisil di Malaysia.

Pejabat berdaftar dan tempat utama perniagaan Institut terletak di No. 15, Jalan Medan Tuanku, 50300 Kuala Lumpur.

Jumlah pekerja pada akhir tahun kewangan adalah 21 (2004: 21).

Penyata kewangan telah dibentangkan dalam Ringgit Malaysia.

2. OBJEKTIF DAN DASAR PENGURUSAN RISIKO KEWANGAN

Risiko utama yang timbul dari aktiviti Institut ialah risiko kredit, risiko mudah cair dan risiko kadar faedah. Majlis menyemak semula dan mempersetujukan dasar untuk pengurusan setiap risiko tersebut dan diringkaskan seperti berikut:

Risiko Kredit

Penghutang dan urus niaga dengan institusi perbankan mungkin menimbulkan risiko kredit yang memerlukan kerugian diiktirafkan sekiranya pihak peniaga balas gagal melaksanakan urusan mengikut kontrak. Pihak peniaga balas adalah institusi perbankan berlesen dan organisasi profesional. Adalah menjadi dasar Institut untuk memantau kedudukan kewangan pihak peniaga balas secara berterusan untuk memastikan bahawa pendedahan Institut terhadap risiko kredit adalah minimum.

Risiko Mudah Tunai

Institut mengamalkan pengurusan risiko mudah tunai yang hemat untuk meminimumkan ketidakpadanan antara aset dan liabiliti kewangan dan mengekalkan kemudahan kredit yang mencukupi untuk keperluan pembiayaan kontingen modal kerja.

Risiko Kadar Faedah

Institut memastikan bahawa ia mendapatkan pinjaman dan meletakkan simpanan tetap pada kadar faedah yang kompetitif di bawah syarat-syarat yang menguntungkan. Pada masa kini, pinjaman yang dipunyainya adalah pinjaman berjangka yang dikenakan faedah pada 1.5% lebih daripada kadar pinjaman asas (BLR) setahun dikira setiap bulan.

Institut juga terdedah kepada risiko kadar faedah yang berkaitan dengan pelaburan simpanan tetapnya dengan sebuah syarikat kewangan yang berlesen.

3. KEGIATAN UTAMA

Kegiatan utama Institut ialah memajukan profesion perakaunan.

Dalam tahun kewangan, tidak berlaku perubahan yang ketara dalam kegiatan ini.

4. ASAS PENYEDIAAN

Penyata kewangan telah disediakan berasaskan konvensyen kos sejarah kecuali sepertimana yang dinyatakan sebaliknya dalam dasar perakaunan penting. Penyata kewangan mematuhi piawaian perakaunan yang diluluskan oleh MASB dan peruntukan Akta Syarikat, 1965.

Penyediaan penyata kewangan menurut piawaian perakaunan yang diluluskan oleh MASB dan peruntukan Akta Syarikat, 1965 memerlukan Majlis membuat anggaran dan andaian yang memberi kesan ke atas jumlah aset dan liabiliti dilaporkan dan pendedahan aset dan liabiliti luar jangka pada tarikh penyata kewangan dan jumlah pendapatan dan belanja dilaporkan dalam tempoh pelaporan. Keputusan sebenar boleh berlainan daripada anggaran.

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5. DASAR-DASAR PERAKAUNAN PENTING

(a) Pengiktirafan Pendapatan dan Belanja

Yuran ahli dan pelajar

(i) Tahun yuran Institut ialah 1 Januari hingga 31 Disember. Yuran tahunan ahli dan pelajar kena dibayar terdahulu setiap tahun. Hanya yuran tahunan ahli dan pelajar yang berpunca dari tahun kewangan semasa diiktiraf sebagai pendapatan. Yuran berhubung dengan tempoh selepas tahun kewangan semasa ditunjukkan dalam kunci kira-kira sebagai Yuran Pendahuluan di bawah tajuk Liabiliti Semasa.

(ii) Yuran kemasukan ahli dan yuran pendaftaran pelajar diiktiraf apabila permohonan masing-masing diluluskan.

(iii) Yuran peperiksaan dan pengecualian diiktiraf apabila permohonan masing-masing diluluskan.

Pendapatan faedah

Pendapatan faedah diiktiraf berasaskan kadar hasil yang efektif.

Aktiviti lain

Aktiviti lain termasuk penyediaan kursus pendidikan profesional berterusan, mengendalikan bengkel peperiksaan dan kursus bimbingan untuk pelajar, jualan penerbitan dan buku panduan belajar MICPA dan pengelolaan aktiviti pembangunan profesional dan aktiviti pelajar lain.

Dasar Institut mengenai pengiktirafan pendapatan dan belanja bagi aktiviti sebegini adalah seperti berikut:-

(i) Setakat aktiviti disempurnakan pada atau sebelum tarikh kunci kira-kira, sebarang lebihan atau kurangan diiktiraf dalam penyata pendapatan.

(ii) Setakat aktiviti dilaksanakan selepas akhir tahun kewangan, sebarang pendapatan diterima dan belanja dilakukan diiktiraf dalam kunci kira-kira.

(iii) Pendapatan daripada jualan penerbitan dan buku panduan belajar MICPA diiktiraf apabila kawalan fizikal barangan dipindah kepada pembeli.

(iv) Kos penerbitan, selain daripada buku panduan belajar, diiktiraf dalam penyata pendapatan dalam tahun kewangan ia berlaku.

Belanja aktiviti lain berhubung dengan belanja langsung yang boleh dikenalpasti.

(b) Loji dan Peralatan dan Susut Nilai

Loji dan peralatan dicatat pada kos, tolak susut nilai terkumpul dan kerugian kemerosotan nilai terkumpul, jika ada.

Susut nilai dikira supaya menghapuskira kos loji dan peralatan mengikut asas garis lurus ke atas hayat bergunanya yang dijangkakan. Kadar susut nilai tahunan yang dipakai adalah seperti berikut :-

Perabot dan lengkapan 10% Sistem kawalan 10% Peralatan pejabat 20% Komputer 33%

Loji dan peralatan yang telah disusut nilai sepenuhnya dicatat pada nilai nominal RM1.00.

Nilai buku loji dan peralatan disemak semula pada setiap tarikh kunci kira-kira untuk menentukan sama ada berwujud tanda-tanda kemerosotan nilai. Sekiranya tanda-tanda tersebut wujud, jumlah yang boleh didapati kembali dianggarkan. Kerugian kemerosotan nilai diiktiraf dalam penyata pendapatan sebaik sahaja didapati akan berlaku pada masa hadapan berjangka. Sebaliknya, kerugian kemerosotan nilai diambilkira balik hingga jumlah terkumpul yang diiktiraf dalam penyata pendapatan sebelum ini, pada ketika tanda kemerosotan nilai tidak wujud lagi.

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5. DASAR-DASAR PERAKAUNAN PENTING (sambungan)

(c) Buku Panduan Belajar

Kos pembangunan buku panduan belajar MICPA dipermodalkan dan dilunaskan mengikut asas garis lurus ke atas hayat ekonomi buku panduan belajar.

Stok buku panduan belajar dicatat pada nilai terendah antara kos sejarah dan nilai boleh direalis bersih. Kos ditentukan mengikut asas masuk-dulu, keluar-dulu dan terdiri daripada kos percetakan.

(d) Penghutang

Penghutang dinyatakan pada nilai jangkaan yang boleh direalis. Hutang lapuk dihapuskira apabila dikenal pasti. Anggaran dibuat untuk hutang ragu yang berasaskan semak semula semua amaun yang belum bayar pada tarikh kunci kira-kira.

(e) Pemiutang

Pemiutang dinyatakan pada kos iaitu nilai saksama balasan yang akan dibayar pada masa hadapan bagi barang-barang dan perkhidmatan yang diterima.

(f) Peruntukan

Peruntukan diiktiraf apabila terdapat obligasi semasa, sama ada sah di sisi undang-undang atau konstruktif, yang diakibatkan oleh peristiwa lepas, apabila terdapatnya kemungkinan bahawa aliran keluar sumber melibatkan manfaat ekonomi akan diperlukan untuk menyelesaikan obligasi tersebut dan anggaran yang boleh dipercayai dapat dibuat bagi amaun obligasi.

(g) Manfaat Kakitangan

Manfaat Kakitangan Jangka Pendek

Upah, gaji, caruman keselamatan sosial, cuti tahunan berbayar, cuti sakit berbayar, bonus dan faedah bukan kewangan diiktiraf sebagai belanja pada tahun yang mana perkhidmatan berkaitan diberikan oleh kakitangan Institut.

Ketidakhadiran terimbuh terkumpul seperti cuti tahunan berbayar adalah diiktiraf sebagai belanja apabila perkhidmatan diberikan oleh kakitangan meningkatkan hak mereka bagi ketidakhadiran terimbuh masa depan. Ketidakhadiran terimbuh tak terkumpul seperti cuti sakit adalah diiktiraf apabila berlakunya ketidakhadiran itu.

Rancangan Caruman Tetap

Institut membuat caruman kepada Kumpulan Wang Simpanan Pekerja (“ KWSP”). Caruman diiktiraf sebagai belanja dalam tahun ianya berlaku.

(h) Cukai Pendapatan

Cukai pendapatan ke atas lebihan atau defisit bagi tahun kewangan terdiri daripada cukai semasa dan cukai tertunda.

Belanja cukai semasa merupakan amaun cukai pendapatan yang dijangkakan perlu dibayar ke atas lebihan bercukai bagi tahun dan ditentukan mengikut kadar cukai yang dikuatkuasakan pada tarikh kunci kira-kira.

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5. DASAR-DASAR PERAKAUNAN PENTING (sambungan)

Cukai tertunda adalah diperuntukkan, mengikut kaedah liabiliti, ke atas perbezaan sementara pada tarikh kunci kira-kira antara asas cukai aset dan liabiliti dan nilai bukunya dalam penyata kewangan. Pada prinsipnya, liabiliti cukai tertunda diiktiraf bagi semua perbezaan sementara yang boleh dikenakan cukai dan aset cukai tertunda diiktiraf bagi semua perbezaan sementara yang boleh diberikan potongan, kerugian cukai belum diserap dan kredit cukai belum guna setakat terdapat kemungkinan keuntungan bercukai akan berlaku terhadapnya perbezaaan sementara yang boleh diberikan potongan, kerugian cukai belum diserap dan kredit cukai belum guna boleh dipakai.

Cukai tertunda ditetapkan pada kadar cukai yang dijangka terpakai dalam tempoh aset direalis atau liabiliti diselesaikan dengan menggunakan kadar cukai yang dikuatkuasakan atau hampir dikuatkuasakan pada tarikh kunci kira-kira.

Aset dan liabiliti cukai tertunda diimbang balas sekiranya terdapat hak yang sah untuk mengimbang balas aset cukai semasa dengan liabiliti cukai semasa dan juga aset cukai tertunda dan liabiliti cukai tertunda adalah berkaitan dengan cukai pendapatan yang dikenakan oleh pihak berkuasa cukai yang sama.

(i) Urus Niaga Matawang Asing

Urus niaga dalam matawang asing diterjemahkan kepada Ringgit Malaysia pada kadar pertukaran yang terpakai pada tarikh urus niaga berlaku dan di mana penyelesaian belum berlaku pada akhir tahun kewangan, pada kadar semasa yang terpakai pada tarikh tersebut. Perbezaan pertukaran asing yang wujud dari penterjemahan dibawa ke penyata pendapatan.

Kadar penutup yang digunakan untuk terjemahan amaun dalam matawang asing adalah seperti berikut:-

2005 2004 RM RM

1 US Dollar (USD) 3.78 3.80 1 Sterling Pound 6.52 7.32

1 Australian Dollar (AUD) 2.77 2.96

(j) Kos Peminjaman

Faedah berkaitan dengan instrumen kewangan, terkelas sebagai liabiliti kewangan, dilaporkan sebagai kos kewangan di dalam penyata pendapatan.

(k) Tunai dan Kesetaraan Tunai

Tunai dan kesetaraan tunai terdiri daripada tunai dalam tangan, baki bank dan pelaburan jangka pendek yang amat mudah cair yang boleh ditukar dengan mudah kepada tunai dan tertakluk kepada risiko perubahan nilai yang tidak ketara.

(l) Instrumen Kewangan

Pinjaman berjangka dicatat pada amaun yang diterima selepas menolak kos urus niaga.

Dasar perakaunan untuk instrumen kewangan lain adalah dinyatakan dalam dasar individu yang berkaitan dengan tiap-tiap instrumen.

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6. LOJI DAN PERALATAN

Peralatan Perabot dan Sistem 2005 pejabat lengkapan Kawalan Komputer Jumlah RM RM RM RM RM

Kos

Pada 1 Januari 297,008 119,097 5,415 174,559 596,079 Tambahan 26,580 95 – 9,478 36,153

Pada 31 Disember 323,588 119,192 5,415 184,037 632,232

Susut nilai terkumpul

Pada 1 Januari 285,283 58,811 2,998 164,881 511,973 Susut nilai bagi tahun kewangan 9,372 8,016 302 12,047 29,737

Pada 31 Disember 294,655 66,827 3,300 176,928 541,710

Nilai buku bersih

Pada 31 Disember 28,933 52,365 2,115 7,109 90,522

Peralatan Perabot dan Sistem 2004 pejabat lengkapan Kawalan Komputer Jumlah RM RM RM RM RM

Kos

Pada 1 Januari 283,678 114,551 5,415 173,064 576,708 Tambahan 13,330 4,546 – 1,495 19,371

Pada 31 Disember 297,008 119,097 5,415 174,559 596,079


Pada 1 Januari 278,584 50,683 2,696 152,258 484,221 Susut nilai bagi tahun kewangan 6,699 8,128 302 12,623 27,752

Pada 31 Disember 285,283 58,811 2,998 164,881 511,973

Nilai buku bersih

Pada 31 Disember 11,725 60,286 2,417 9,678 84,106

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7. KOS PEMBANGUNAN BUKU PANDUAN BELAJAR

2005 2004 RM RM

Kos pembangunan 617,024 614,024 Pelunasan terkumpul (363,210) (236,303)

253,814 377,721

8. PENDAHULUAN KEPADA TABUNG AMANAH PENDIDIKAN MACPA

Amaun ini merupakan pendahuluan yang dibuat oleh Institut yang tidak bercagar, tanpa faedah dan tidak mempunyai syarat pembayaran balik yang tetap. Institut tidak berniat untuk menuntut pembayaran balik sepenuhnya dalam tempoh dua belas bulan berikutnya.

9. PENGHUTANG, PRABAYARAN DAN DEPOSIT

2005 2004 RM RM

Hutang dari Ulasan Belanjawan 2006/2005 108,621 99,976 Hutang dari pertandingan NACRA 2,944 26,300 Yuran belum diterima 305,468 201,978 Pelbagai penghutang 103,750 107,641 Cukai yang dapat diperolehi semula 2,416 2,416 Bayaran pendahuluan kepada penasihat pendidikan untuk semakan semula kelayakan MICPA – 93,660 Bayaran terdahulu lain 16,687 5,944 Deposit 7,350 7,350

547,236 545,265 Elaun untuk hutang ragu (17,750) (17,750)

529,486 527,515

Tempoh kredit bagi yuran belum diterima adalah 30 hari.

10. SIMPANAN TETAP

2005 2004 RM RM

Simpanan dengan bank berlesen (Nota 18) – 5,000 Simpanan tetap dengan sebuah bank berlesen 150,000 – Simpanan tetap dengan sebuah syarikat kewangan berlesen – 250,000

150,000 255,000

Simpanan sebanyak RM5,000 adalah dipegang oleh sebuah bank berlesen sebagai lien untuk mendapatkan jaminan bank bagi kemudahan pos pada tahun kewangan sebelumnya.

Kadar faedah purata berwajaran pada tahun kewangan untuk simpanan tetap dengan sebuah syarikat kewangan berlesen adalah 3% (2004: 3%) setahun.

Simpanan tetap tersebut mempunyai jangka matang purata selama 90 hari (2004: 90 hari).

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11. PEMIUTANG DAN AKRUAN

2005 2004 RM RM

Pendahuluan untuk buku panduan belajar 198,885 198,885 Hutang kepada persatuan pelajar 143,923 127,510 Pemiutang lain 125,583 177,612 Akruan 430,765 332,160

899,156 836,167

12. PINJAMAN BERJANGKA BERCAGAR

Bayaran balik bagi pinjaman adalah seperti berikut:-

2005 2004 RM RM

Semasa - Dalam masa satu tahun 110,396 109,744

Bukan Semasa - Lebih dari satu tahun tetapi kurang dari lima tahun 305,759 416,232

416,155 525,976

Pinjaman berjangka dikenakan faedah pada 1.5% lebih daripada kadar pinjaman asas (BLR) setahun. Pinjaman berjangka tersebut dikeluar guna sepenuhnya pada Disember 2004 dan kena dibayar balik dengan enam-puluh ansuran bulanan sebanyak RM12,138 setiap satu bermula dari Januari 2005. Kadar faedah purata berwajaran pada tahun kewangan adalah 7.5% (2004: 7.5%) setahun.

Amaun bayaran balik pinjaman berjangka dalam masa satu tahun berjumlah RM110,396 merupakan bayaran balik pokok sahaja.

Pinjaman berjangka bercagar secara:-

(i) “Negative pledge” ke atas aset MICPA.

(ii) “Lienholder’s caveat” ke atas hartanah Tabung Amanah Pendidikan MACPA yang terletak di No. 15, Jalan Medan Tuanku, 50300 Kuala Lumpur.

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13. AKTIVITI LAIN Lebihan/

Pendapatan Belanja (Defisit) 2005 RM RM RM

Minggu perakaunan 23,755 35,998 (12,243) Bengkel peperiksaan 375,167 279,415 95,752 Pendidikan profesional berterusan 333,855 157,730 176,125 Majlis jamuan tahunan 75,790 80,731 (4,941) Syarahan kenangan dan jamuan 30,120 37,786 (7,666) Anugerah kecemerlangan MICPA 10,360 22,288 (11,928) Jurnal dan penerbitan 11,554 4,255 7,299 Perhimpunan tidak formal ahli-ahli 2,350 2,275 75 Buku panduan belajar MICPA 149,822 155,708 (5,886) Forum perniagaan 245,983 85,925 160,058

1,258,756 862,111 396,645 Aktiviti yang dikelolakan

bersama pertubuhan lain: Pertandingan NACRA – 1,177 (1,177)

Ulasan belanjawan 2006 102,200 – 102,200 Seminar dianjurkan bersama 5,598 – 5,598 Forum “International Education Standards” 2,696 – 2,696

110,494 1,177 109,317 1,369,250 863,288 505,962

Lebihan/ Pendapatan Belanja (Defisit) 2004 RM RM RM

Bengkel peperiksaan 266,900 189,721 77,179 Pendidikan profesional berterusan 305,214 153,866 151,348 Kursus bimbingan 10,350 2,400 7,950 Majlis jamuan tahunan 63,470 75,535 (12,065) Syarahan kenangan dan jamuan 33,680 50,435 (16,755) Anugerah kecemerlangan MICPA 11,090 23,290 (12,200) Jurnal dan penerbitan 8,689 5,612 3,077 Perhimpunan tidak formal ahli-ahli 10,875 8,341 2,534 Buku panduan belajar MICPA 123,537 136,256 (12,719) Forum perniagaan 225,500 64,473 161,027 Pertandingan golf MICPA 49,858 50,515 (657)

1,109,163 760,444 348,719 Aktiviti yang dikelolakan

bersama pertubuhan lain: Pertandingan NACRA – 5,147 (5,147)

Ulasan belanjawan 2005 102,200 – 102,200 Seminar dianjurkan bersama 3,730 – 3,730 Forum “International Education Standards” – 2,854 (2,854)

105,930 8,001 97,929 1,215,093 768,445 446,648

Belanja bagi aktiviti di atas merupakan belanja langsung yang dapat dikenalpasti sahaja dan tidak termasuk belanja overhed.

Belanja untuk buku panduan belajar MICPA termasuk perlunasan kos pembangunan buku panduan belajar berjumlah RM126,907 (2004: RM129,907).

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14. PENDAPATAN LAIN 2005 2004

RM RM

Sumbangan dari ahli – 69,575 Pengiklanan di laman web MICPA – 500 Faedah simpanan tetap 12,329 7,201 Denda diterima yang timbul dari tindakan disiplin 12,375 1,080 Jualan label pengiriman 1,838 1,950 Lain-lain 2,600 135

29,142 80,441

15. BELANJA KENDALIAN 2005 2004

RM RM

Belanja pengiklanan 11,325 4,205 Belanja mesyuarat agung tahunan dan mesyuarat Majlis 4,966 4,830 Ganjaran juruaudit 6,300 6,300 Hutang lapuk dihapuskira 35,955 40,543 Bayaran bank 3,611 1,986 Program pemajuan jenama 51,500 – Susut nilai 29,736 27,752 Belanja langsung peperiksaan 88,287 93,935 Elektrik dan air 26,038 22,436 Belanja am 7,547 9,068 Insurans 6,402 5,623 Jurnal dan pernyataan teknikal 135,155 145,086 Bayaran perundangan dan profesional 10,590 23,448 Penyelenggaraan 17,079 7,710 Belanja perubatan 4,302 4,482 Sewa pejabat 96,000 96,000 Majalah dan stok perpustakaan 4,338 6,756 Pos dan telefon 111,332 79,259 Percetakan dan alatulis 64,877 82,133 Belanja pembangunan profesional 158,844 155,661 Penerbitan bahan kursus pelajar 9,300 8,382 Semakan semula kelayakan MICPA 161,701 18,812 Kos pekerja - Kumpulan Wang Simpanan Pekerja dan SOCSO 190,006 172,680 - Gaji dan bonus 1,187,345 1,046,788 Dana rekreasi pekerja 3,000 5,941 Yuran kepada badan perakaunan antarabangsa 22,452 51,223 Belanja perjalanan 23,637 21,957

2,471,625 2,142,996

Belanja langsung peperiksaan termasuk sejumlah RM2,147 (2004: RM2,243) yang dibayar kepada seorang ahli Majlis sebagai bayaran perkhidmatan pemeriksa.

16. KOS KEWANGAN 2005 2004

RM RM

Faedah pinjaman berjangka 35,836 39,452

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17. BELANJA CUKAI

Bagi tujuan cukai, Institut ditaksirkan sebagai “Persatuan Dagangan” di bawah seksyen 53(3) Akta Cukai Pendapatan, 1967. Oleh itu pendapatannya dikenakan cukai mengikut kadar skala.

2005 2004 RM RM

Belanja cukai semasa 245 91 Kurangan peruntukan pada tahun terdahulu – 153

245 244

Cukai telah diperuntukkan bagi pendapatan faedah yang diperolehi oleh Institut.

Penyelarasan berangka antara kadar cukai efektif dan kadar cukai yang dikenakan bagi Institut adalah seperti berikut:

2005 2004 % %

Kadar cukai dikenakan (28.00) 28.00

Kesan cukai berkaitan dengan: Pendapatan tidak dikena cukai – (0.02) Penggunaan elaun modal belum diserap dan kerugian cukai (4.16) (26.79) Belanja tidak dibenar potongan 35.71 0.01 Pengurangan kadar cukai berkanun (3.30) (1.15)

0.25 0.05

Cukai pendapatan - tahun terdahulu – 0.09

Kadar cukai efektif 0.25 0.14

Aset cukai tertunda

Aset cukai tertunda tidak diiktiraf bagi butiran yang berikut:-

2005 2004 RM RM

Kerugian cukai belum guna 263,330 166,784 Elaun modal belum diserap – 9,080

263,330 175,864

Kerugian cukai belum guna dan elaun modal belum diserap boleh digunakan pada tempoh masa yang tidak berbatas untuk mengimbang balas keuntungan bercukai Institut pada masa depan, tertakluk kepada persetujuan Jabatan Hasil Dalam Negeri. Aset cukai tertunda tidak diiktiraf bagi butiran di atas oleh kerana tidak berkemungkinan keuntungan bercukai pada masa depan akan berlaku terhadapnya perbezaan sementara boleh diberikan potongan boleh dipakai.

Page 91

18. TUNAI DAN KESETARAAN TUNAI

Tunai dan kesetaraan tunai terdiri daripada tunai dalam tangan dan baki di bank dan simpanan tetap. Tunai dan kesetaraan tunai termasuk dalam penyata aliran tunai terdiri daripada amaun kunci kira-kira yang berikut:-

2005 2004 RM RM

Simpanan tetap 150,000 255,000 Tunai dan baki di bank 53,615 35,559

203,615 290,559 Tolak: Simpanan dengan bank berlesen di bawah lien (Nota 10) – (5,000)

203,615 285,559

19. INSTRUMEN KEWANGAN

Risiko kredit

Pada 31 Disember 2005, Institut mempunyai penghutang punca yuran tahunan berjumlah RM305,468 yang belum diterima bagi tempoh melebihi 30 hari dan baki bank dan simpanan sebanyak RM202,615 dengan beberapa buah institusi perbankan berlesen utama di Malaysia. Selain daripada yang tersebut, Institut tidak mempunyai tumpuan risiko kredit yang ketara. Pendedahan kepada risiko kredit maksimum adalah diwakili oleh nilai buku aset kewangan dalam kunci kira-kira.

Nilai saksama

Nilai buku instrumen kewangan Institut pada 31 Disember 2005 menghampiri nilai saksamanya oleh kerana tempoh matang instrumen kewangan tersebut agak pendek.

20. ANGKA PERBANDINGAN

Angka-angka perbandingan tertentu telah dikelaskan semula supaya selaras dengan pembentangan tahun semasa.

21. KEBENARAN UNTUK PENERBITAN PENYATA KEWANGAN

Penyata kewangan dibenarkan untuk penerbitan oleh Majlis pada 29 Mei 2006.

Page 92

Penyata oleh Ahli-ahli MajlisMenurut pendapat ahli-ahli Majlis, penyata kewangan pada mukasurat 77 hingga 91 telah disediakan mengikut piawaian perakaunan yang diluluskan oleh MASB dan peruntukan Akta Syarikat, 1965 supaya memberi gambaran yang benar dan saksama mengenai kedudukan Institut pada 31 Disember 2005 dan keputusannya serta aliran tunainya bagi tahun kewangan berakhir pada tarikh tersebut.

Bagi pihak Ahli-ahli Majlis,

Dato’ Ab Halim MohyiddinPresiden

Dato’ Nordin BaharuddinNaib Presiden


Akuan BerkanunSaya, Tan Shook Kheng, selaku pegawai yang terutama bertanggungjawab ke atas pengurusan kewangan Institut Akauntan Awam Bertauliah Malaysia, dengan sesungguhnya dan tulus ikhlas mengaku bahawa penyata kewangan yang dibentangkan pada mukasurat 77 hingga 91 adalah sebaik-baik pengetahuan dan kepercayaan saya adalah betul, dan saya membuat pengakuan ini dengan penuh kepercayaan bahawa perkara-perkara tersebut adalah benar serta menurut Akta Akuan Berkanun, 1960.

Ditandatangani dan diakui oleh penama di atasTAN SHOOK KHENGdi Kuala Lumpurpada 29 Mei 2006

Di hadapan saya :-

Page 93

Laporan Juruaudit Kepada Ahli-ahli The Malaysian Institute of Certified Public Accountants (3246-U) (Institut Akauntan Awam Bertauliah Malaysia)

Kami telah mengaudit penyata kewangan yang dibentangkan pada mukasurat 77 hingga 91.

Penyata kewangan tersebut adalah tanggungjawab Majlis.

Adalah menjadi tanggungjawab kami untuk membuat pendapat bebas kami ke atas penyata kewangan tersebut berdasarkan audit kami dan untuk melaporkan pendapat kami kepada anda, sebagai suatu badan, menurut Seksyen 174, Akta Syarikat, 1965 dan bukan untuk tujuan-tujuan lain. Kami tidak menerima tanggungjawab terhadap mana-mana pihak lain tentang kandungan laporan ini.

Kami telah menjalankan audit kami mengikut piawaian pengauditan yang diluluskan di Malaysia. Piawaian tersebut memerlukan kami merancang dan melaksanakan audit untuk mendapat keyakinan yang munasabah tentang sama ada penyata kewangan tersebut bebas dari sebarang salahnyata yang ketara. Sesuatu audit merangkumi pemeriksaan, berasaskan ujian, bukti yang menyokong jumlah dan pendedahan dalam penyata kewangan. Sesuatu audit juga termasuk penaksiran prinsip-prinsip perakaunan yang digunakan dan anggaran-anggaran penting yang dibuat oleh Majlis, serta penilaian pembentangan penyata kewangan secara keseluruhannya. Kami percaya bahawa audit kami memberikan asas yang munasabah bagi pendapat kami.

Pada pendapat kami:

(a) penyata kewangan telah disediakan dengan sewajarnya menurut piawaian perakaunan yang diluluskan oleh MASB dan peruntukan Akta Syarikat, 1965 untuk memberi gambaran yang benar dan saksama mengenai:-

(i) perkara-perkara yang dikehendaki oleh Seksyen 169 Akta Syarikat, 1965 untuk diambilkira dalam penyata kewangan Institut; dan

(ii) kedudukan kewangan Institut pada 31 Disember 2005 dan hasil urusan serta aliran tunainya bagi tahun kewangan berakhir pada tarikh tersebut; dan

(b) rekod-rekod perakaunan dan rekod-rekod lain serta daftar-daftar yang dikehendaki oleh Akta untuk disimpan oleh Institut telah disimpan dengan sempurna menurut peruntukan-peruntukan Akta tersebut.

Tan Kim Leong, JP235/06/07 (J/PH)Akauntan Bertauliah

Siew Kah Toong1045/03/08 (J)Akauntan Bertauliah


Page 95


Report & Financial Statements December 31, 2005


Page 96


TRUSTEES: Datuk Abu Hassan Kendut Larry Seow Thiam Fatt Dato’ Hj. Megat Abdul Rahman Megat Ahmad Dr. Nawawi Mat Awin Subimal Sen Gupta Dato’ Hj. Zainal Abidin Putih

AUDITORS: Tan Kim Leong, JP Siew Kah Toong

PRINCIPAL PLACE OF BUSINESS: No. 15, Jalan Medan Tuanku 50300 Kuala Lumpur

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RePoRt of the tRustees foR the fINANCIAL YeAR eNDeD DeCeMBeR 31, 2005

The principal objects of the MACPA Educational Trust Fund (“Trust Fund”) are the promotion and advancement of education and dissemination of knowledge in accountancy and related subjects.

In furtherance of its objects, the Trust Fund offers grants to assist academic staff of local universities in carrying out research and study in accountancy and related disciplines.

With the aim to ensure that research activities are carried out on a well co-ordinated basis and in areas pertinent to the accountancy profession and society, the Trust Fund has established a Research Board charged with the responsibility to formulate the Trust Fund’s research objectives, to plan and monitor its research programme, and to undertake publication of research findings.

To further promote education in accountancy, the Trust Fund awards scholarships and study loans for pursuing an accountancy qualification. The scholarships are intended to provide financial assistance to those school leavers who possess good academic record but who are financially handicapped to achieve a tertiary or professional qualification in accountancy.

The Trustees of the Trust Fund have pleasure in submitting the financial statements of the Trust Fund for the financial year ended December 31, 2005.

On behalf of the Trustees,

……………………………………………………. Dato’ hj. Megat Abdul Rahman Megat Ahmad Trustee

……………………………………………………. Datuk Abu hassan Kendut Trustee

Kuala LumpurJune 5, 2006

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BALANCe sheet As At DeCeMBeR 31, 2005 2005 2004

Note RM RM

Non-Current Assets Property and equipment 6 1,735,121 1,765,168

Current Assets Tax recoverable 7 43,466 43,466 Sundry receivables 8 12,000 8,160 Fixed deposit with a licensed bank 39,593 38,427

Bank balance 15,549 1,798

110,608 91,851

Current Liability

Accruals 5,275 2,100

5,275 2,100

Net Current Assets 105,333 89,751

1,840,454 1,854,919

Accumulated funds

Balance as at January 1 1,726,524 1,661,412 Net surplus for the financial year 18,700 65,112

Balance as at December 31 1,745,224 1,726,524

Advances from MICPA 9 95,230 128,395

1,840,454 1,854,919

The above Balance Sheet is to be read in conjunction with the notes to the financial statements on pages 102 to 105.

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INCoMe stAteMeNt foR the fINANCIAL YeAR eNDeD DeCeMBeR 31, 2005 2005 2004

Note RM RM

Income Rental 96,000 96,000

Donations 13,750 70,358 Fixed deposit interest 1,166 1,135

110,916 167,493

expenses Assessment and quit rent 16,153 16,153

Auditors’ remuneration - current year 2,000 2,100 - overprovision in prior year (100) – Depreciation 30,047 31,759 Insurance 599 599 Legal and professional fee 5,146 2,622 Printing and stationery 234 245 Repairs and maintenance 700 2,350 54,779 55,828 Scholarships, research grants and expenses 37,437 46,553

(92,216) (102,381)

surplus Before tax 18,700 65,112

tax expense 7 – –

Net surplus for the financial Year 18,700 65,112

The above Income Statement is to be read in conjunction with the notes to the financial statements on pages 102 to 105.

Page 100


stAteMeNt of ReCogNIseD gAINs AND Losses foR the fINANCIAL YeAR eNDeD DeCeMBeR 31, 2005 2005 2004

RM RM

Net surplus for the financial year 18,700 65,112

The above Statement of Recognised Gains and Losses is to be read in conjunction with the notes to the financial statements on pages 102 to 105.

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CAsh fLow stAteMeNt foR the fINANCIAL YeAR eNDeD DeCeMBeR 31, 2005 2005 2004

Note RM RM

Cash flows from operating Activities

Cash receipts Proceeds from rental 96,000 96,000 Donations 13,750 70,358

Cash payments Operating expenses (25,397) (33,579) Scholarships, study loans, research grants and expenses (37,437) (46,553)

Net cash generated from operating activities 46,916 86,226

Cash flows from Investing Activities

Additions to property and equipment – (6,450) Fixed deposit interest received 1,166 1,135

Net cash from/(used in) investing activities 1,166 (5,315)

Cash flows from financing Activities

Advances from MICPA 62,835 88,041 Repayment of advances from MICPA (96,000) (171,000)

Net cash used in financing activities (33,165) (82,959)

Net Increase/(Decrease) in Cash and Cash equivalents 14,917 (2,048)

Cash and Cash equivalents at Beginning of the financial Year 40,225 42,273

Cash and Cash equivalents at end of the financial Year 10 55,142 40,225

The above Cash Flow Statement is to be read in conjunction with the notes to the financial statements on pages 102 to 105.

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Notes to the fINANCIAL stAteMeNts DeCeMBeR 31, 2005

1. geNeRAL INfoRMAtIoN

The Trust Fund is a non-profit organisation, incorporated and domiciled in Malaysia.

The registered office and principal place of business of the Trust Fund is located at No. 15, Jalan Medan Tuanku, 50300 Kuala Lumpur.

The financial statements are presented in Ringgit Malaysia.

2. fINANCIAL RIsK MANAgeMeNt oBJeCtIVes AND PoLICIes

The main risks arising from the Trust Fund’s financial instruments are liquidity risk and credit risk. The Trustees review and agree policies for managing each of these risks and they are summarised below.

Liquidity Risk

The Trust Fund receives its funds from The Malaysian Institute of Certified Public Accountants (“MICPA”). The funds are considered to be interest-free, unsecured and have no fixed terms of repayment. As such, the financial stability of the Trust Fund is directly related to that of MICPA.

Credit Risk

Transactions with banking institutions may give rise to credit risk which require the loss to be recognised if a counter party fails to perform as contracted. The counter party is a licensed banking institution. It is the policy of the Trust Fund to monitor the financial standing of this counter party on an ongoing basis to ensure that the Trust Fund is exposed to minimal credit risk.

3. PRINCIPAL oBJeCts

The principal objects of the MACPA Educational Trust Fund (“Trust Fund”) are the promotion and advancement of education and dissemination of knowledge in accountancy and related subjects.

4. BAsIs of PRePARAtIoN of fINANCIAL stAteMeNts

The financial statements have been prepared under the historical cost convention unless otherwise indicated in the significant accounting policies. The financial statements comply with MASB approved accounting standards.

The preparation of financial statements in conformity with MASB approved accounting standards requires that the Trustees make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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5. sIgNIfICANt ACCouNtINg PoLICIes

(a) Income Recognition

(i) Rental income is recognised on an accrual basis.

(ii) Donations are recognised when received.

(iii) Interest income is recognised on the effective yield basis.

(b) Property and equipment and Depreciation

Property and equipment are stated at cost less accumulated depreciation and impairment losses, if any.

The acquisition cost of freehold land and building was apportioned based on a professional valuer’s report for purposes of calculating the depreciable amount of the building.

Freehold land is not depreciated. For other property and equipment, depreciation is calculated to write off the cost of the property and equipment on a straight line basis over their estimated useful lives. The annual depreciation rates used are as follows:-

Building 2% Fixtures and fittings 20% Renovation 10%

Property and equipment which are fully depreciated are recorded at a nominal value of RM1.00.

The carrying amounts of property and equipment are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amounts are estimated. The impairment loss is charged to the income statement as soon as foreseeable. Conversely, the impairment loss will be reversed up to the cumulative amount previously charged to the income statement, once the indicator for impairment ceases to exist.

(c) Provisions

Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

(d) Cash and Cash equivalents

Cash and cash equivalents comprise cash in hand, bank balances and short term, highly liquid investments that are readily convertible to cash and which are subject to an insignificant risk of changes in value.

(e) financial Instruments

The accounting policies for financial instruments are disclosed in the individual policies associated with each item.

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6. PRoPeRtY AND eQuIPMeNt fixtures

freehold and 2005 land Building fittings Total RM RM RM RM

Cost

As at January 1/December 31 1,134,000 865,784 171,161 2,170,945


As at January 1 – 274,099 131,678 405,777 Charge for the financial year – 17,316 12,731 30,047

As at December 31 – 291,415 144,409 435,824

Net book value

As at December 31 1,134,000 574,369 26,752 1,735,121

fixtures freehold and 2004 land Building fittings Renovation Total RM RM RM RM RM

Cost

As at January 1 1,134,000 824,348 164,711 41,436 2,164,495 Additions – – 6,450 – 6,450 Reclassification – 41,436 – (41,436) –

As at December 31 1,134,000 865,784 171,161 – 2,170,945


As at January 1 – 252,639 117,235 4,144 374,018 Charge for the financial year – 17,316 14,443 – 31,759 Reclassification – 4,144 – (4,144) –

As at December 31 – 274,099 131,678 – 405,777

Net book value

As at December 31 1,134,000 591,685 39,483 – 1,765,168

A lienholder’s caveat has been executed over the freehold land and building in favour of a licensed bank for a term loan amounting to RM600,000 to MICPA to finance the production of study manuals, of which RM416,155 (2004: RM525,965) has been outstanding as at the balance sheet date.

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7. tAX eXPeNse/tAX ReCoVeRABLe

The income of the Trust Fund for the years 2001 to 2005 is tax exempt under paragraph 13, Schedule 6 to the Income Tax Act, 1967.

The tax authorities has accepted the appeal for exemption of tax on the income for the years of assessment 1994 to 2000 of the Trust Fund. The tax recoverable which is the over-payment of tax amounting to RM43,466 in previous years will be refunded.

8. suNDRY ReCeIVABLes

Sundry receivables include study loans provided to students for pursuing the MICPA qualification. The study loans are interest free and are repayable over a period of 15 months.

9. ADVANCes fRoM MICPA

The amount represents advances from The Malaysian Institute of Certified Public Accountants (“MICPA”) which are unsecured, interest-free and have no fixed terms of repayment. The MICPA has indicated that it will not demand full payment within the next twelve months.

10. CAsh AND CAsh eQuIVALeNts

Cash and cash equivalents comprise the following balance sheet amounts:-

2005 2004 RM RM

Bank balance 15,549 1,798 Fixed deposit with a licensed bank 39,593 38,427

55,142 40,225

The weighted average interest rate during the financial year for fixed deposit with a licensed bank is 3% (2004: 3%) per annum.

The fixed deposit has a maturity of 90 days (2004: 90 days).

11. fINANCIAL INstRuMeNts

Credit Risk

As at December 31, 2005, the Trust Fund has bank balance and fixed deposit of RM55,142 with a major licensed banking institution in Malaysia. The Trust Fund has no significant concentration of credit risk. The maximum exposures to credit risk are represented by the carrying amounts of the financial assets in the balance sheet.

fair Values

The carrying amounts of the financial instruments of the Trust Fund as at December 31, 2005 approximate their fair values due to the relatively short term maturity of these financial instruments.

12. AuthoRIsAtIoN foR Issue of fINANCIAL stAteMeNts

These financial statements were authorised for issue by the Trustees on June 5, 2006.

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stAteMeNt BY tRustees

In the opinion of the Trustees, the financial statements set out on pages 98 to 105 have been drawn up in accordance with MASB approved accounting standards so as to give a true and fair view of the state of affairs of the MACPA Educational Trust Fund as at December 31, 2005 and of its results and cash flows for the financial year then ended.

On behalf of the Trustees,

…………………………………………………… Dato’ hj. Megat Abdul Rahman Megat Ahmad Trustee

………………………………….…… Datuk Abu hassan Kendut Trustee

Kuala Lumpur June 5, 2006

stAtutoRY DeCLARAtIoN

I, Tan Shook Kheng, being the person primarily responsible for the financial management of the MACPA Educational Trust Fund, do solemnly and sincerely declare that the financial statements set out on pages 98 to 105 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed ) Tan Shook Kheng ) at Kuala Lumpur this ) 5th June, 2006 day of )

Before me:-

Page 107


RePoRt of the AuDItoRsto the tRustees of MACPA eDuCAtIoNAL tRust fuND

We have audited the financial statements as set out on pages 98 to 105.

These financial statements are the responsibility of the Trustees.

It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our opinion to you, as a body, and for no other purpose. We do not assume responsibility towards any other person for the content of this report.

We conducted our audit in accordance with approved standards on auditing in Malaysia. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Trustees, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion:-

(a) the financial statements have been properly drawn up in accordance with MASB approved accounting standards so as to give a true and fair view of the financial position of the MACPA Educational Trust Fund as at December 31, 2005 and of its results and cash flows for the financial year then ended; and

(b) the accounting and other records of the MACPA Educational Trust Fund examined by us have been properly kept.

tan Kim Leong, JP 235/06/07 (J/PH) Chartered Accountant

siew Kah toong 1045/03/08 (J) Chartered Accountant

Kuala LumpurJune 5, 2006

Page 108

Tabung Amanah Pendidikan MACPA

LAPORAN PEMEGANG-PEMEGANG AMANAH BAGI TAHUN BERAKHIR 31 DISEMBER 2005

Matlamat utama Tabung Amanah Pendidikan MACPA (TAP) adalah penggalakan dan kemajuan pendidikan serta penyebaran pengetahuan perakaunan dan bidang-bidang lain yang berkaitan.

Untuk mencapai matlamat tersebut, TAP menawarkan bantuan kewangan kepada kakitangan akademik universiti-universiti tempatan untuk menjalankan penyelidikan dan kajian dalam bidang perakaunan dan disiplin-disiplin yang berkaitan.

Dengan tujuan untuk mempastikan bahawa kegiatan penyelidikan dijalankan pada asas yang lebih berkordinasi dan dalam bidang yang berhubung dengan profesion perakaunan dan masyarakat, TAP telah melantik suatu Lembaga Penyelidikan. Tanggungjawab Lembaga tersebut adalah merumus objektif penyelidikan TAP, merancang dan mengawasi program penyelidikan, dan menerbitkan hasil penyelidikan.

Untuk menggalakkan lagi pendidikan dalam bidang perakaunan, TAP menghadiahkan biasiswa dan pinjaman pelajaran untuk mencapai kelayakan perakaunan. Tujuannya adalah untuk memberi bantuan kewangan kepada lepasan sekolah yang mempunyai prestasi akademik yang baik tetapi menghadapi rintangan kewangan untuk mencapai kelayakan lanjutan atau profesional dalam bidang perakaunan.

Pemegang-pemegang Amanah dengan sukacitanya mengemukakan penyata kewangan TAP bagi tahun kewangan berakhir 31 Disember 2005.

Bagi pihak Pemegang-Pemegang Amanah,

……………………………………………………. Dato’ Hj. Megat Abdul Rahman Megat Ahmad Pemegang Amanah

……………………………………………………. Datuk Abu Hassan Kendut Pemegang Amanah

Kuala Lumpur 5 Jun 2006

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KUNcI KIRA-KIRA PADA 31 DEcEMBER 2005 2005 2004

Nota RM RM

Aset Bukan Semasa Hartanah dan peralatan 6 1,735,121 1,765,168

Aset Semasa Cukai yang boleh didapatkan kembali 7 43,466 43,466 Pelbagai penghutang 8 12,000 8,160 Simpanan tetap dengan bank berlesen 39,593 38,427

Baki di bank 15,549 1,798

110,608 91,851

Liabiliti Semasa

Akruan 5,275 2,100

5,275 2,100

Aset Semasa Bersih 105,333 89,751

1,840,454 1,854,919

Dana Terkumpul

Baki pada 1 Januari 1,726,524 1,661,412 Lebihan bersih bagi tahun kewangan 18,700 65,112

Baki pada 31 Disember 1,745,224 1,726,524

Pendahuluan daripada MIcPA 9 95,230 128,395

1,840,454 1,854,919

Kunci Kira-kira di atas hendaklah dibaca bersama dengan nota kepada penyata kewangan di mukasurat 113 hingga 116.

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PENyATA PENDAPATAN BAGI TAHUN KEwANGAN BERAKHIR 31 DISEMBER 2005 2005 2004

Nota RM RM

Pendapatan Sewa 96,000 96,000

Derma 13,750 70,358 Faedah simpanan tetap 1,166 1,135

110,916 167,493

Belanja Taksiran dan cukai tanah 16,153 16,153

Ganjaran juruaudit - tahun semasa 2,000 2,100 - terlebih peruntukan pada tahun terdahulu (100) – Susut nilai 30,047 31,759 Insurans 599 599 Bayaran profesional dan perundangan 5,146 2,622 Percetakan dan alatulis 234 245 Pembaikan dan penyelenggaraan 700 2,350

54,779 55,828 Biasiswa, bantuan dan belanja penyelidikan 37,437 46,553

(92,216) (102,381)

Lebihan Sebelum cukai 18,700 65,112

Belanja cukai 7 – –

Lebihan Bersih bagi Tahun Kewangan 18,700 65,112

Penyata Pendapatan di atas hendaklah dibaca bersama dengan nota kepada penyata kewangan di mukasurat 113 hingga 116.

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PENyATA KEUNTUNGAN DAN KERUGIAN yANG DIIKTIRAf BAGI TAHUN KEwANGAN BERAKHIR 31 DISEMBER 2005 2005 2004

RM RM

Lebihan bersih bagi tahun kewangan 18,700 65,112

Penyata Keuntungan dan Kerugian yang Diiktiraf di atas hendaklah dibaca dengan nota kepada penyata kewangan di mukasurat 113 hingga 116.

Page 112


PENyATA ALIRAN TUNAI BAGI TAHUN KEwANGAN BERAKHIR 31 DISEMBER 2005 2005 2004

Nota RM RM

Aliran Tunai daripada Aktiviti Kendalian

Penerimaan tunai Hasil daripada sewa 96,000 96,000 Derma 13,750 70,358

Bayaran tunai Belanja kendalian (25,397) (33,579) Biasiswa, pinjaman pelajaran, bantuan dan belanja kendalian (37,437) (46,553)

Tunai bersih daripada aktiviti kendalian 46,916 86,226

Aliran Tunai daripada Aktiviti Pelaburan

Tambahan kepada hartanah dan peralatan – (6,450) Faedah simpanan tetap diterima 1,166 1,135

Tunai bersih daripada/(diguna dalam) aktiviti pelaburan 1,166 (5,315)

Aliran Tunai daripada Aktiviti Pembiayaan

Pendahuluan daripada MICPA 62,835 88,041 Pembayaran balik pendahuluan daripada MICPA (96,000) (171,000)

Tunai bersih diguna dalam aktiviti pembiayaan (33,165) (82,959)

Lebihan/(Kurangan) Bersih dalam Tunai dan Kesetaraan Tunai 14,917 (2,048)

Tunai dan Kesetaraan Tunai pada Awal Tahun Kewangan 40,225 42,273

Tunai dan Kesetaraan Tunai pada Akhir Tahun Kewangan 10 55,142 40,225

Penyata Aliran Tunai di atas hendaklah dibaca bersama dengan nota kepada penyata kewangan di mukasurat 113 hingga 116.

Page 113


NOTA KEPADA PENyATA KEwANGAN 31 DISEMBER 2005

1. MAKLUMAT AM

Tabung Amanah Pendidikan adalah sebuah organisasi tidak bertujuan mendatangkan keuntungan yang diperbadankan dan berdomisil di Malaysia.

Pejabat berdaftar dan tempat utama perniagaan Tabung Amanah terletak di No. 15, Jalan Medan Tuanku, 50300 Kuala Lumpur.

Penyata kewangan Tabung Amanah telah dibentangkan dalam Ringgit Malaysia.

2. DASAR DAN OBJEKTIf PENGURUSAN RISIKO KEwANGAN

Risiko utama yang timbul dari instrumen penyata kewangan Tabung Amanah ialah risiko mudah tunai dan risiko kredit. Pemegang Amanah menyemak semula dan mempersetujukan dasar untuk pengurusan tiap-tiap risiko tersebut yang diringkaskan seperti berikut:

Risiko Mudah Tunai

TabungAmanahmenerimatabungdaripadaTheMalaysianInstituteofCertifiedPublicAccountants(MICPA).Tabungtersebut dianggap tanpa faedah, tidak bercagar dan tidak mempunyai syarat pembayaran balik yang tetap. Oleh yang demikian, kestabilan kewangan Tabung Amanah berkait langsung dengan kestabilan kewangan MICPA.

Risiko Kredit

Urus niaga dengan institusi perbankan mungkin menimbulkan risiko kredit yang memerlukan kerugian diiktirafkan sekiranya pihak peniaga balas gagal melaksanakan urusan mengikut kontrak. Pihak peniaga balas adalah sebuah institusi perbankan berlesen. Adalah menjadi dasar Tabung Amanah untuk memantau kedudukan kewangan pihak peniaga balas secara berterusan untuk memastikan bahawa pendedahan Tabung Amanah terhadap risiko kredit adalah minimum.

3. MATLAMAT UTAMA

Matlamat utama Tabung Amanah Pendidikan MACPA (TAP) adalah penggalakan dan kemajuan pendidikan serta penyebaran pengetahuan perakaunan dan bidang-bidang lain yang berkaitan.

4. ASAS PENyEDIAAN PENyATA KEwANGAN

Penyata kewangan telah disediakan berasaskan konvensyen kos sejarah kecuali sepertimana yang dinyatakan sebaliknya dalam dasar perakaunan penting. Penyata kewangan mematuhi piawaian perakaunan yang diluluskan oleh MASB.

Penyediaan penyata kewangan menurut piawaian perakaunan yang diluluskan oleh MASB memerlukan Pemegang Amanah membuat anggaran dan andaian yang memberi kesan ke atas jumlah aset dan liabiliti dilaporkan serta pendedahan aset dan liabiliti luar jangka pada tarikh penyata kewangan dan jumlah pendapatan dan belanja dilaporkan dalam tempoh pelaporan. Keputusan sebenar boleh berlainan daripada anggaran.

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5. DASAR-DASAR PERAKAUNAN yANG PENTING

(a) Pengiktirafan Pendapatan

(i) Pendapatan sewa diiktiraf pada asas akruan.

(ii) Derma diiktiraf apabila diterima.

(iii) Pendapatan faedah diiktiraf berasaskan kadar hasil yang efektif.

(b) Hartanah dan Peralatan dan Susut Nilai

Hartanah dan peralatan dicatat pada kos tolak susut nilai terkumpul dan kerugian kemerosotan nilai terkumpul, jika ada.

Kos perolehan tanah milik bebas dan bangunan telah dibahagikan berdasarkan laporan penilai profesional bagi tujuan mengira nilai bangunan yang boleh disusutnilaikan.

Tanah milik bebas tidak disusutnilaikan. Bagi hartanah dan peralatan lain, susut nilai telah dikira supaya menghapuskirakan kos harta dan peralatan mengikut asas garis lurus ke atas hayat berguna yang dijangkakan bagi aset berkenaan. Kadar susut nilai tahunan ialah:-

Bangunan 2% Lekapan dan lengkapan 20% Pembaikan 10%

Hartanah dan peralatan yang telah disusut nilai sepenuhnya dicatat pada nilai nominal RM1.00.

Nilai buku hartanah dan peralatan disemak semula pada setiap tarikh kunci kira-kira untuk menentukan sama ada berwujud tanda-tanda kemerosotan nilai. Sekiranya tanda-tanda tersebut wujud, jumlah yang boleh didapati kembali dianggarkan. Kerugian kemerosotan nilai diiktiraf dalam penyata pendapatan sebaik sahaja didapati akan berlaku pada masa hadapan berjangka. Sebaliknya, kerugian kemerosotan nilai diambilkira balik hingga jumlah terkumpul yang diiktiraf dalam penyata pendapatan sebelum ini, pada ketika tanda kemerosotan nilai tidak wujud lagi.

(c) Peruntukan

Peruntukan adalah diiktiraf apabila terdapat obligasi semasa, sama ada sah di sisi undang-undang atau konstruktif, yang diakibatkan oleh peristiwa lepas, apabila terdapatnya kemungkinan bahawa aliran keluar sumber melibatkan manfaat ekonomi akan diperlukan untuk menyelesaikan obligasi tersebut dan anggaran yang boleh dipercayai dapat dibuat bagi amaun obligasi.

(d) Tunai dan Kesetaraan Tunai

Tunai dan kesetaraan tunai terdiri daripada tunai dalam tangan, baki bank dan pelaburan jangka pendek yang amat mudah cair yang boleh ditukar dengan mudah kepada tunai dan tertakluk kepada risiko perubahan nilai yang tidak ketara.

(e) Instrumen Kewangan

Dasar perakaunan untuk instrumen kewangan adalah dinyatakan dalam dasar individu yang berkaitan dengan tiap-tiap instrumen.

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6. LOJI DAN PERALATAN Lekapan

Tanah dan 2005 milik bebas Bangunan lengkapan Jumlah RM RM RM RM

Kos

Pada 1 Januari/31 Disember 1,134,000 865,784 171,161 2,170,945


Pada 1 Januari – 274,099 131,678 405,777 Susut nilai bagi tahun kewangan – 17,316 12,731 30,047

Pada 31 Disember – 291,415 144,409 435,824

Nilai buku bersih

Pada 31 Disember 1,134,000 574,369 26,752 1,735,121

Lekapan Tanah dan 2004 milik bebas Bangunan lengkapan Pembaikan Jumlah RM RM RM RM RM

Kos

Pada 1 Januari 1,134,000 824,348 164,711 41,436 2,164,495 Tambahan – – 6,450 – 6,450 Pengelasan semula – 41,436 – (41,436) –

Pada 31 Disember 1,134,000 865,784 171,161 – 2,170,945


Pada 1 Januari – 252,639 117,235 4,144 374,018 Susut nilai bagi tahun kewangan – 17,316 14,443 – 31,759 Pengelasan semula – 4,144 – (4,144) –

Pada 31 Disember – 274,099 131,678 – 405,777

Nilai buku bersih

Pada 31 Disember 1,134,000 591,685 39,483 – 1,765,168

“Lienholder’s caveat” telah dikuatkuasakan ke atas tanah milik bebas dan bangunan atas nama sebuah bank berlesen untuk memberikan pinjaman berjangka berjumlah RM600,000 kepada MICPA bagi tujuan membiayai kos pembangunan buku panduan belajar yang mana sebanyak RM416,155 (2004: RM525,965) yang belum bayar pada tarikh kunci kira-kira.

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7. BELANJA cUKAI/cUKAI yANG DAPAT DIPEROLEHI SEMULA

Pendapatan Tabung Amanah untuk tahun 2001 hingga 2005 dikecualikan cukai menurut perenggan 13, Jadual 6, Akta Cukai Pendapatan, 1967.

Pihak berkuasa cukai telah meluluskan rayuan untuk pengecualian cukai ke atas pendapatan Tabung Amanah bagi tahun taksiran 1994 hingga 2000. Cukai yang dapat diperolehi semula akibat bayaran cukai terlebih bagi tahun-tahun sebelumnya berjumlah RM43,466 akan dikembalikan.

8. PELBAGAI PENGHUTANG

Pelbagai penghutang termasuk pinjaman pelajaran yang ditawarkan kepada pelajar-pelajar untuk mengikuti kursus MICPA. Pinjaman pelajaran tersebut adalah tanpa faedah dan perlu dibayar balik dalam tempoh 15 bulan.

9. PENDAHULUAN DARIPADA MIcPA

AmauninimerupakanpendahuluandaripadaTheMalaysianInstituteofCertifiedPublicAccountants(MICPA)yangtidak bercagar, tanpa faedah dan tidak mempunyai syarat pembayaran balik yang tetap. MICPA telah menyatakan bahawa pembayaran balik sepenuhnya tidak akan dituntut dalam tempoh dua belas bulan berikutnya.

10. TUNAI DAN KESETARAAN TUNAI

Tunai dan kesetaraan tunai terdiri daripada amaun kunci kira-kira yang berikut:-

2005 2004 RM RM

Baki di bank 15,549 1,798 Simpanan tetap dengan bank berlesen 39,593 38,427

55,142 40,225

Kadar faedah purata berwajaran pada tahun kewangan untuk simpanan tetap dengan sebuah bank berlesen ialah 3% (2004: 3%) setahun.

Tempoh matang simpanan tetap ialah 90 hari (2004: 90 hari).

11. INSTRUMEN KEwANGAN

Risiko Kredit

Pada 31 Disember 2005, Tabung Amanah mempunyai baki bank dan simpanan tetap sebanyak RM55,142 dengan sebuah institusi perbankan berlesen utama di Malaysia. Tabung Amanah tidak mempunyai tumpuan risiko kredit yang ketara. Pendedahan kepada risiko kredit maksimum adalah diwakili oleh nilai buku aset kewangan dalam kunci kira-kira.

Nilai Saksama

Nilai buku instrumen kewangan Tabung Amanah pada 31 Disember 2005 menghampiri nilai saksamanya oleh kerana tempoh matang instrumen kewangan agak pendek.

12. KEBENARAN UNTUK PENERBITAN PENyATA KEwANGAN

Penyata kewangan dibenarkan untuk penerbitan oleh Pemegang Amanah pada 5 Jun 2006.

Page 117


PENyATA OLEH PEMEGANG-PEMEGANG AMANAH

Menurut pendapat Pemegang-pemegang Amanah, penyata kewangan yang dibentangkan pada mukasurat 109 hingga 116 telah disediakan menurut piawaian perakaunan yang diluluskan oleh MASB supaya memberi gambaran yang benar dan saksama mengenai kedudukan Tabung Amanah Pendidikan MACPA pada 31 Disember 2005 dan keputusannya serta aliran tunainya bagi tahun kewangan berakhir pada tarikh tersebut.

Bagi pihak Pemegang-pemegang Amanah,

………………………………….………………… Dato’ Hj. Megat Abdul Rahman Megat Ahmad Pemegang Amanah

………………………………….………………… Datuk Abu Hassan Kendut Pemegang Amanah


AKUAN BERKANUN

Saya, Tan Shook Kheng, selaku pegawai yang terutama bertanggungjawab ke atas pengurusan kewangan Tabung Amanah Pendidikan MACPA, dengan sesungguhnya dan dengan tulus ikhlas mengaku bahawa penyata kewangan yang dibentangkan pada mukasurat 109 hingga 116 sebaik-baik pengetahuan dan kepercayaan saya adalah betul, dan saya membuat pengakuan ini dengan penuh kepercayaan bahawa perkara-perkara tersebut adalah benar serta menurut peruntukan Akta Akuan Berkanun, 1960.

Ditandatangani dan diakui oleh penama di atas ) TAN SHOOK KHeNG ) di Kuala Lumpur ) pada 5 Jun 2006 )

Di hadapan saya:-

Page 118


LAPORAN JURUAUDIT KEPADA PEMEGANG-PEMEGANG TABUNG AMANAH PENDIDIKAN

Kami telah mengaudit penyata kewangan yang dibentangkan pada mukasurat 109 hingga 116.

Penyata kewangan tersebut adalah tanggungjawab Pemegang-pemegang Amanah.

Adalah menjadi tanggungjawab kami untuk membuat pendapat bebas kami ke atas penyata kewangan tersebut berdasarkan audit kami dan untuk melaporkan pendapat kami kepada anda, sebagai suatu badan, dan bukan untuk tujuan-tujuan lain. Kami tidak menerima tanggungjawab terhadap mana-mana pihak lain tentang kandungan laporan ini.

Kami telah menjalankan audit kami mengikut piawaian pengauditan yang diluluskan di Malaysia. Piawaian tersebut memerlukan kami merancang dan melaksanakan audit untuk mendapat keyakinan yang munasabah tentang sama ada penyata kewangan tersebut bebas dari sebarang salahnyata yang ketara. Sesuatu audit merangkumi pemeriksaan, berasaskan ujian, bukti yang menyokong jumlah dan pendedahan dalam penyata kewangan. Sesuatu audit juga termasuk penaksiran prinsip-prinsip perakaunan yang digunakan dan anggaran-anggaran penting yang dibuat oleh Pemegang-pemegang Amanah, serta penilaian pembentangan penyata kewangan secara keseluruhannya. Kami percaya bahawa audit kami memberikan asas yang munasabah bagi pendapat kami.

Pada pendapat kami:

(a) penyata kewangan telah disediakan dengan sewajarnya menurut piawaian perakaunan yang diluluskan oleh MASB untuk memberi gambaran yang benar dan saksama mengenai kedudukan kewangan Tabung Amanah Pendidikan MACPA pada 31 Disember 2005 dan hasil urusan serta aliran tunainya bagi tahun kewangan berakhir pada tarikh tersebut; dan

(b) rekod-rekod perakaunan dan rekod-rekod lain Tabung Amanah Pendidikan MACPA yang diperiksa oleh kami telah disimpan dengan sempurna.

Tan Kim Leong, JP 235/06/07 (J/PH) Akauntan Bertauliah

Siew Kah Toong 1045/03/08 (J) Akauntan Bertauliah


Page 119

Form of Proxy

I, _________________________________________________________________________________(Full Name in Block Capitals)

of _________________________________________________________________________________

beingamemberoftheabovenamedInstituteherebyappoint

1. _________________________________________________________________________________(Full Name)

_______________________________________________________________________________or(Address)

2._________________________________________________________________________________(Full Name)

_________________________________________________________________________________(Address)

asmyproxytoattendonmybehalftheAnnualGeneralMeetingoftheInstitutetobeheldatBilikMeranti,Level 4, The Pan Pacific Hotel, Jalan Putra, Kuala Lumpur on June 24, 2006 at 10:00 a.m. and at any adjournmentthereof.

Signature___________________________________________________________________________

Dated this ____________________________ day of _________________, 20 ___________________

Note:

Amemberentitledtoattendandvoteatthismeetingisentitledtoappointaproxytoattendandvoteinhisstead.AproxymustbeamemberoftheInstitute.Theinstrumentappointingtheproxymustbedepositedat the office of the Institute at No. 15, Jalan Medan Tuanku, 50300 Kuala Lumpur not less than 48 hours beforethetimesetforholdingthemeeting.

The Malaysian Institute of Certified Public Accountants (Institut Akauntan Awam Bertauliah Malaysia) (3246-U) (Company Incorporated in Malaysia Limited by Guarantee)

✂