``Interests'' and accounting standard setting in Malaysia
Faculty of Business and Accountancy, University of Malaya, Kuala Lumpur, Malaysia Keywords Accounting profession, Malaysia, Standards Abstract This paper offers insights into the conflicts and tensions within the Malaysian accounting profession and the power struggle therein to dominate the accounting standard setting process, within the context of a rapidly developing country. It shows how interest groups and parochial interests, along with issues of self-protection, affected the process of standard setting, which was controlled by different interests over the period under study. At one time the profession dominated. But far from being a monolithic body, it was in turn split according to various interests: the Big Six behind the Malaysian Association of Certified Public Accountants (MACPA) and the smaller firms behind the Malaysian Institute of Accountants (MIA). At other times big business prevailed. These conflicts and power struggles are revealed through an analysis of the case of the Goodwill Accounting Standard.
Selvaraj D. Susela
Introduction This paper offers an understanding of the struggle within the accounting profession for control of the standard setting process, in the context of a developing nation. The focus on standard setting is specially geared to reveal the impact of that process on the profession, market, state and community, and vice versa. Susela (1996) illustrates that because standards clearly impact on practitioners (the profession), it is hardly surprising that they develop ``interests'' around standard setting, whether expressed through accounting associations or firms. The standard setting arena is here viewed as a site of struggle between interest groups, both within the profession and outside it. To date, no such study has been done of the Malaysian accountancy and standard setting domains. In particular, there has been very little scholarly analysis of events discussed here. The paper follows the actors and institutions involved in setting an accounting standard based on goodwill, through a grounded study of the policy makers and their social context. The focus of the analysis is not the technical aspects of goodwill accounting but rather the process by which the standard was adopted. The analysis below highlights conflict within the profession, in particular the power struggle between vested interest groups: the Big Six and the smaller firms, or rather the chartered (including CPAs) and the non-chartered accountants. The author would like to thank the anonymous reviewers and the guest editor of this special edition for comments and suggestions that improved this article substantially. I also acknowledge the helpful comments of participants at the Fifth Interdisciplinary Perspectives in Accounting Conference, University of Manchester, UK, 7-9 July, 1997. The views expressed in this paper are solely the responsibility of the author.
Accounting Auditing & Accountability Journal, Vol. 12 No. 3, 1999, pp. 358-387. # MCB University Press, 0951-3574
The Goodwill Standard is an eminently suitable vehicle for empirical Accounting analysis. First, it is an issue which has been of concern to standard setters and standard setting regulators in Malaysia since 1971. Second, it is also intimately linked with the in Malaysia dynamic growth of the Malaysian economy and the shift in the state's objectives over the last 20 to 30 years. As these have recently involved encouragement of the corporate sector, a powerful group affected by, and 359 impinging upon, standard setting, tracking the goodwill issue is a way of analysing the corporate sector's entry into the standard setting process. Third, the historical analysis captures the changing attitudes to local initiatives versus overseas influences over time. Fourth, this is the only standard which was considered controversial at the time of the study. The existence of...