July/August 2018 Malaysia edition

70 Pages·2017·17.8 MB·English

AB
Accounting and Business
S
in
g
a
p
o Malaysia July/August 2018
re
A
c
c
o
u
n
tin
g
a
n
d
B
u
s The future
in
e
s
s
Ju
ly
/A
u is bright
g
u
s
t 2  
0
1
8
Companies in Asia are reimaginging
sustainability reporting
New beginnings
Change ahead for Malaysia’s
business and economic policies
Goodbye, GST
Implications of transitioning to the
sales and services tax
Auditor challenge
Technology and business
complexity is transforming audit
MY_Covernew.indd 1 11/06/2018 11:34
Accountancy
Accountancy
Futures app
Futures app
Accountancy
Keep ahead of the critical issues facing
Keep aFheuad tofu ther ceritiscal isasupes fpacing
tomorrow’s accountancy profession
tomorrow’s accountancy profession
with our free app. Be notified when
with our free app. Be notified when
the latKeesetp i sashueead i so af vthaeil acrbitliec,a lr eisasude s facing
the latest issue is available, read
offlinet,o mscorrarpowbo’so akc,c osuhnatraen cayn pdr osfeeasrsciohn.
offline,w sitchr aopurb foreoek a, psph.a Bree naontdifi esde awrhcehn.
the latest issue is available, read
offline, scrapbook, share and search.
Available on iOS, Android, Kindle and web
Available on iOS, Android, Kindle and web
accaglobal.com/alliance
Available on iOS, Android, Kindle and web
accaglobal.com/alliance
charteredaccountantsanz.com/alliance
accaglobal.com/alliance
charteredaccountantsanz.com/alliance
charteredaccountantsanz.com/alliance
3660 AF_Alliance AD_inside back cov.indd 1 26/04/2018 16:08
AccFuturesApp_Ad.indd 2 10/05/2018 12:55
3660 AF_Alliance AD_inside back cov.indd 1 26/04/2018 16:08
3660 AF_Alliance AD_inside back cov.indd 1 26/04/2018 16:08
Welcome
Following a sensational general election result, Malaysia’s new government is already
acting on its manifesto promise to ditch GST and rein in public spending
Malaysia’s elections in May saw On page 56, Dr Choong Kwai Fatt,
Pakatan Harapan (Alliance of Hope) – a tax specialist and ACCA member,
a party formed less than three years writes on the transition from GST to SST.
ago – sweep to power and end a He gives advice on what accounting
six-decade rule by Barisan Nasional. professionals need to do to ensure
It was a pivotal moment in Malaysia’s compliance and explores the economic
electoral history and paves the way impact of the abolishment of GST.
for change. We hear from a group of companies
Within days of taking office, the prime in Singapore that has created a Circle
minister, Tun Dr Mahathir Mohamad, of Practice, the first of its kind in Asia,
confirmed one manifesto promise: which aims to improve sustainability
to abolish the unpopular goods and reporting in conjunction with A4S, The
services tax (GST). Other pledges, Prince’s Accounting for Sustainability
such as an overhaul of large and costly Project. More on page 32.
infrastructure projects, are under way in And, we take a look at the economics
a push to rein in public spending. of the hajj. The annual pilgrimage
These are interesting times in the of Muslims to Mecca is a logistical
region as Malaysia seeks to rethink its challenge for the Saudi Arabian
economic and business policies. On government as around 2.4 million
pages 28-30, The Star’s executive editor pilgrims worldwide visit. On page
Errol Oh reviews the early days of what 41, you can read more on the huge
was a sensational general election, investment made in infrastructure along
while his column on page 17 considers with the impact on hajj tourism as the
the implications of a new government country welcomes and supports its
inheriting massive country debt. And on visitors to Mecca. AB
page 18, Manu Bhaskaran gives his view
on how financial markets might fare in Colette Steckel, Asia editor
the wake of a political transition in Asia. [email protected]
Accounting and Business About ACCA Leadership
The leading monthly magazine for ACCA (the Association of Chartered President: Leo Lee FCCA
Deputy president: Robert Stenhouse FCCA
finance professionals, available in seven Certified Accountants) is the global
Vice president: Jenny Gu FCCA
different versions: China, Ireland, Malaysia, body for professional accountants. It Chief executive: Helen Brand OBE
Singapore, UK, Africa and International. offers business-relevant, first-choice Member services
* Magazine contacts, page 66 qualifications to people of application, ACCA office details, page 66
* Available in app and pdf ability and ambition who seek a ACCA Connect: [phone]
[email protected]
* AB Direct: weekly news bulletin rewarding career in accountancy, finance accaglobal.com/members
More at accaglobal.com/ab and management. ACCA supports its
Our alliance with CA ANZ
200,000 members and 486,000 students
Audit period July 2016 ISSN No: More about ACCA’s alliance with Chartered
to June 2017 145,448 1460-406X in 180 countries. accaglobal.com Accountants ANZ: accaglobal.com/alliance
July/August 2018 Accounting and Business 3
MY_welcomenew.indd 3 11/06/2018 11:36
32 36
21 Talent investment
NWD’s Teddy Liu
on the group’s
strategic partnership
with ACCA
Practice
24 The view from
Thomas Lee of Lee, Au
& Co, Hong Kong, plus
practice news
25 Sign of the times
Auditors are adapting
to a fast-moving
environment
Insights
28 Fresh start
Post-election, Malaysia’s
19 Leo Lee new government is
News Comment
The next generation of wasting no time in
6 News in pictures 16 Cesar Bacani finance professionals getting to work
A different view of Bank customers are continue to demonstrate 32 Learning together
recent headlines entitled to benefit from ACCA’s core values The Prince’s Accounting
crossborder innovation for Sustainability Project
8 News roundup
17 Errol Oh Corporate has created Asia’s first
Digest of developments
Malaysia’s new Circle of Practice in
government has its work 20 The view from Singapore 
Interview
cut out Penny Pan of 35 Graphics
12 Anselm Tan 18 Manu Bhaskaran Zhongkejianye As CFOs take on a
We meet the head of Short-term issues are Environmental Protection more strategic role,
corporate venturing at a small price to pay to Technology, plus so their risk priorities
Philips ASEAN Pacific secure Malaysia’s future corporate news are shifting
6 21 25 38
4 Accounting and Business July/August 2018
MY_CON_contents.indd 4 08/06/2018 12:15
41 46 60 62
36 Common good 56 Introducing SST
Careers Technical
Good corporate The sales and services tax
governance drives the 44 CPD Body of evidence 49 CPD IAS 8 is replacing the goods
prosperity of society Do your gestures, Why the retrospective and services tax
38 Austerity’s attractions facial expressions and application of accounting
Job security and work- movements nail or ruin policies may not require People
life balance win public your presentations? the restating of fi nancials 60 Glittering future
sector roles a thumbs-up 52 Technical update
Lim Wen Ling’s
from Generation Next The latest on audit,
Management accountancy skills
41 The hajj in numbers tax and fi nancial benefi t her jewellery
Saudi Arabia is making 46 Move over, lean reporting
business
signifi cant investments to There’s a new kid on the 54 High standards
support the pilgrimage’s management philosophy The IASB‘s Nick Anderson
ACCA
infrastructure block on making a difference
62 Strength in numbers
A look at some of
28
the stories behind
the 200k celebrations
64 Elections to Council
Nominations are
open for members
The GE14 outcome
wishing to stand at
is a tremendous
the AGM
advertisement for
65 News
democracy and CPD seminar helps
there is much members get to grips
with the new sales and
interest in what
services tax
happens next
66 Update
ACCA signs three-
year memorandum of
understanding with
CFA Institute
65
July/August 2018 Accounting and Business 5
MY_CON_contents.indd 5 08/06/2018 12:16
6 Accounting and Business July/August 2018
AP_Newsinpix.indd 6 06/06/2018 15:36
Greenpeace activists
stormed oil and energy
company Total’s Paris
AGM in protest over
Amazon basin drilling
plans. The French
multinational saw net
profi t rise by 27% to
US$10.6bn in 2017.
Tun Dr Mahathir
Mohamad led opposition
party Pakatan Harapan
(Alliance of Hope) to
victory in Malaysia’s
general election in May.
Malaysia’s new parliament
will meet for 20 days
in July to table various
proposals.
The world’s biggest
shaftless Ferris wheel
began operation in
Weifang, in China’s
Shandong province.
Standing 145m tall with
a diameter of 125m, the
wheel took three years
to build at a cost of over
CNY140m.
The New York Stock
Exchange has appointed
Stacey Cunningham as its
67th president, making
her the fi rst female head
in its 226-year history.
She was previously
COO, having joined the
exchange as an intern
in 1994.
July/August 2018 Accounting and Business 7
AP_Newsinpix.indd 7 06/06/2018 15:37
News roundup
This edition’s stories and infographics from across the globe, as well as a look at
the latest developments and issues affecting the finance profession
Fear diminishes innovative project, and which comes from China while some countries
Analysis of foreign 73% would even change and India alone – and this have made positive steps
exchange intervention in organisations to be more is expected to continue in in improving regulatory
spot and forward markets involved in innovation. Yet the near term, gaining 5.6% clarity around the sector
across Asia’s emerging only 12% of innovation this year and next. But there (citing Hong Kong, New
economies by the Institute has been in back-office are risks and challenges Zealand, the Philippines,
for International Finance has finance processes first, ahead, including from a Singapore and South Korea),
found that central banks and with the majority of focus tightening of global financial the wider region still has
governments are becoming being on customer-facing conditions, a shift toward some way to go in breaking
more comfortable with processes, FSN’s Innovation inward-looking policies, down the barriers to
appreciating currencies. The in the Finance Function and – over the longer run cloud adoption.
US-based group says the Survey 2018 finds. However, – an ageing population,
exercise shows that ‘fear responses suggest that slowing productivity growth Goodbye, GST
of floating’ has diminished 63% of organisations that and the rise of the digital Malaysia’s new government
in the region, especially don’t discuss innovation economy, according to has delivered on an election
in mainland China and believe they are in danger the International Monetary promise to abolish the goods
Malaysia, while intervention of their finance processes Fund’s latest regional report. and services tax (GST),
remains relatively intense falling behind the rest of announcing that the rate
in Singapore and Thailand. the business. Moreover, Reach for the cloud would be cut from 6% to zero
The analysis covered the survey finds that In a report looking at effective from 1 June. For
mainland China, Hong Kong, innovative companies attract financial services regulations more see page 53.
India, Indonesia, Malaysia, innovative people. across the Asia-Pacific
Philippines, Singapore, South region, Singapore and Stay alert
Korea, Taiwan and Thailand. Growth continues Hong Kong have come out Singapore regulators
Asia continues to be the on top as having the most and the banking industry
Innovation matters main engine of the world’s favourable policies for cloud have launched two best-
Almost 90% of senior finance economy, accounting for adoption. The report by practice papers to better
executives would relish the more than 60% of global the Asia Cloud Computing prevent money laundering
opportunity to lead a truly growth – three-quarters of Association notes that and terrorism financing.
Relevant to ‘financial
institutions, professional
KPMG’s a winner services providers and
KPMG scooped 21 awards in the 2018 Asia Tax Awards, other gatekeepers alike’,
building on its success in 2017 when it won 17. Among the rest the papers discuss
of the Big Four, Deloitte and EY picked up 20 awards between common red flags linked
them. The individual awards for practitioners went to Allen to trade-based money
Tan of Baker McKenzie (Asia Tax Practice Leader of the Year); laundering, as well as
Joanne Su of EY (Asia Transfer Pricing Practice Leader of the various financial crime
Year); and Seok Hoon Kang of Yulchon (Asia Tax Disputes and typologies. ‘I encourage
Litigation Practice Leader of the Year). China’s Tencent Group you to study both papers,
won the award for in-house tax team of the year. and consider how best
to use the information to
8 Accounting and Business July/August 2018
AP_N_newsroundup.indd 8 07/06/2018 13:50
meet your needs,’ said
Chua Kim Leng, special Could do better
adviser in the Monetary Employers in Asia are still missing the mark when it comes
Authority of Singapore’s to workplace health and wellbeing, with elevated levels of
fi nancial supervision group stress reported by 56% of employees. Research by global
at the AML/CFT Industry advisory, broking and solutions company Willis Towers
Partnership Dialogues Watson concludes that employers are spending valuable
in May. resources on creating standalone and fragmented programmes
that employees do not value. The research noted, however, that many
PPPs review employers are starting to adopt a more strategic approach.
China’s efforts to cool down
local government debt
growth with a six-month % %
clampdown on illegal joint 67%
fundraising activities by the 6 3
public and private sectors 5 6
have delivered results,
Managing health is Employees suffering from Employers’ healthcare plan
China Daily reported. A
employees’ top priority elevated levels of stress meets employees’ needs
statement attributed to the
ministry of fi nance noted
4
that nearly a quarter of the
4
approved public-private % 60% %
partnerships projects (PPPs)
3
had been suspended by
3
April, following a nationwide
investigation. It added that Employers offering fi nancial Employers offering behavioural/ Employers offering lifestyle risk-
wellbeing programmes health management programmes management programmes
1,695 PPP projects, worth
a total of RMB1.8 trillion Source: Willis Towers Watson 2017/2018 Global Benefi ts Attitudes Survey
(US$284bn), had been shut
down, while a further 2,005
projects worth RMB3.1 trillion recommendations follow an government has expedited has hit a record high in
had to be ‘rectifi ed’. independent comparative the fi rst national standard Singapore, with more than
study of corporate for such technology and a one in three organisations
Governance push governance regimes across complete industrial chain (35%) suffering fraud in
The Hong Kong Institute of Hong Kong, the UK, the has emerged. Over the next the last two years, up from
Certifi ed Public Accountants US, mainland China and three years, according to the 22% in 2016. Of those, 32%
has called for substantial Singapore, with a focus white paper, the cutting- estimate losses linked to
improvements in corporate on shareholders’ rights, edge technology is expected the most disruptive fraud
governance in Hong Kong, remedies and protections, to be widely integrated into at US$1m or above. Chan
including the establishment and the regulation of non- sectors such as product Kheng Tek, forensics leader
by the government Hong Kong incorporated traceability, copyright at PwC Singapore, said the
of a high-level policy companies. protection, bill verifi cation, sharp increase underscores
unit; a stronger role for precision marketing, energy the extent of the threat.
independent non-executive Blockchain leader and healthcare. The standard ‘Fraudsters continue to
directors; and more board China is likely to take the is expected to be ready by use opportunities and
actions being brought lead in adopting blockchain the end of 2019. control gaps created by
into the enforcement in the real economy, an fast-changing business
regime of Securities and industry white paper says. As Fraud losses rise environment and
Futures Ordinance. The reported by China Daily, the Reported economic crime technological sophistication,’
July/August 2018 Accounting and Business 9
AP_N_newsroundup.indd 9 07/06/2018 13:50
more than two years amid a
PwC partners on blockchain tight vacancy environment.
PwC Hong Kong and PwC Singapore have entered a joint Chinese corporates
business relationship with VeChain, a blockchain service continued to be a key driver
provider specialising in the Internet of Things, supply chain of demand, accounting
management and anti-counterfeiting. PwC Hong Kong for 53% of new lettings in
is discussing the provision of trust-based services on the Central in April.
VeChain platform. Raymund Chao, PwC Asia Pacific and
Greater China chairman, sees this as an important strategic Car tariff cut
collaboration to provide innovative professional services using China will cut the import
blockchain technology. ‘We are glad to establish a deeper duty on passenger cars
relationship with VeChain, which aims to build a trusted and to 15% from 1 July (down
distributed business ecosystem to help address longstanding from 25%), in a move the
challenges in supply chain management, food trust and ministry of finance calls a
anti-counterfeiting areas. VeChain’s mission aligns with major step in expanding
PwC’s purpose of solving important problems and building reform and opening up
trust in society,’ he said. China. With more than 1.2
million vehicles imported last
year, and national preference
he said. ‘Growing fraud risk significant benefits from telco China Mobile and the for German cars, European
awareness has translated artificial intelligence (AI) ICBC bank. According to carmakers such as Porsche,
into more structured fraud and distributed ledger BrandZ, the 2018 ranking BMW and Volkswagen are
prevention and detection technologies, independent shows how Tencent and expected to benefit the
frameworks which include research commissioned by Alibaba have become global most.
enhanced fraud risk Thomson Reuters suggests. powerhouses. ‘Attitudes are
monitoring techniques and Key findings of the survey of changing, particularly among Cyber threats
detective controls relying on 30 tier 1 financial institutions younger consumers who are The trade secrets and
technology.’ across North America, falling in love with Chinese intellectual property that
western Europe and parts brands,’ said Doreen Wang, fill supply chains have
Worse deal for expats of developed Asia include Kantar Millward Brown’s emerged as key targets
Expatriate pay packages in a strategic wish-list of global head of BrandZ. for ransomware attackers,
Hong Kong have fallen to requirements for a fit-for- ‘While penetration into US finds research from the NTT
a five-year low but are still purpose, integrated risk markets may still be at a Security 2018 Global Threat
the fourth highest in the ecosystem based around preliminary stage for both Intelligence Report. Across
region after Japan, mainland information and data brands, other regions are Asia Pacific, finance is still
China and India. Lee Quane, congruence; adaptability; embracing them.’ the most targeted sector –
regional director – Asia at rich visualisation, usability despite decreasing from 46%
ECA International, which and collaboration; dynamic, Rents rise of attacks in 2016 to 26%
conducted the research, says event-centric and timely; Office rents in Hong Kong’s in 2017. Increased attacks
that rising living costs and and open and seamless co- Central business district are against education resulted
increased pollution in China existence. close to the peak reached in the sector jumping from
made it more challenging to before the 2008 financial 9% of attacks in 2016 to 18%
attract international talent Brands take off crisis, and could soon in 2017. The manufacturing
and so packages continue to Eight of Asia’s leading exceed that, industry analysts sector dropped to sixth
rise in local terms. top 10 brands are from predict. This is based on position (7%), down
China, and five of those are real estate services firm JLL’s from 32%. AB
AI brings benefits technology-related. Tencent latest analysis showing rents
Risk and compliance tops the list, followed by in the office market have Compiled by Peta Tomlinson,
staff expect to see e-commerce giant Alibaba, grown at their fastest pace in journalist
10 Accounting and Business July/August 2018
AP_N_newsroundup.indd 10 07/06/2018 13:51