This will be my last editorial as President of the Institute as my term will end in July 2015 when we will be holding our AGM.
The two year term has been an exciting if at times turbulent period in view of the various local and EU developments that have occurred during the time. Together with my Council and committees, I have worked hard to overcome the challenges that came our way and to achieve results that are of benefit to our profession whilst protecting and supporting the public interest.
One of the main objectives of my presidency was to continue to make the Institute more relevant to its members. In order to achieve this objective we have worked on a number of fronts, which I will briefly outline hereunder.
Networking/building bridges with other stakeholders with whom our members interact: To this effect we held meetings with various bodies including tax and regulatory authorities, the Banking sector, the University of Malta, ACCA and ICAEW, the Chamber of Advocates, the Malta Chamber of Commerce, where amongst the constituted bodies with which we met. We also had meetings with various Government Ministers to better understand their policy on matters pertinent to our profession. We are also participating in different fora to be better able to influence the debate on those developments affecting our profession and our clients. I am proud to note that the Institute is being asked for its view on a number of different matters including the Family Business Act, the Accounting and Audit Directives and the Regulation on specific requirements regarding statutory audit of public-interest entities.
European legislative and regulatory initiatives: We are currently very active in the working group (WG) led by the Accountancy Board and tasked with the transposition of the Accounting Directive (DIR 2013/34/EU). Following the adoption of a common position by the WG on the Member State Options that are available to Malta, the Institute’s technical staff together with staff from the Registry of Companies at MFSA finished drafting the amendments to the Companies Act. In parallel, our staff supported by members of the MIA Accounting Committee is in the final stages of drafting the necessary consequential amendments necessary to GAPSE. As part of this development we also dealt with audit exemptions issue. An ad-hoc MIA working group composed of a cross section of members in public practice has identified a number of potential exemptions that have been discussed with representatives from the ministries of finance and competition. The feedback so far has been positive.
The Institute is also a very active member on another working group also led by the Accountancy Board but this time tasked with the transposition of the Audit Directive and the PIE Regulation. It is with great satisfaction that I note that despite the difference of opinions the different sized audit firms may have on audit regulation we managed to find a common position on the member state options relating to audit regulation which our institute has put forward to the pertinent government bodies. Another project, which the Institute’s technical staff has been working on for some time, relates to ‘other assurance services’. In recent years, the requirements on auditors have increased not least from the requests of one form of assurance confirmation or another that are being requested by Government entities from the auditor. These requests are not related to the statutory audit but are mainly requests for which the auditor would have to structure another engagement in accordance with IFAC’s framework for non-audit assurance services. Compilation requests are being received by our members who regularly turn to the Institute for guidance. Both the audit and ethics committees are involved in this project. There are other matters we are working on not least the Legal Bill. We have always maintained that we support initiatives that help to better regulate a profession and that enhance the public interest. We are not against this bill but against certain clauses including the very wide definition given to legal advice and the obligation on the Accountancy profession to include a disclaimer in any written advice they give to clients.
I would like to take this opportunity to thank all our members who are involved in one way or another in these projects who dedicate their time on a voluntary basis. Needless to say I would also like to thank our staff, in particular our technical director, who have been kept very busy in these past months.
Revision of the Institute’s internal structures: As a Council we have taken a hard look at our strategy, internal structures and executive set-up to see how these may be improved to support an Institute that is seeking to continue to move ahead efficiently and effectively in an ever changing, dynamic and at times chaotic environment. At the July 2014 AGM our Members’ approved changes to the MIA statute, which included revised objects, clarification of the different organs’ responsibilities, introduction of a maximum time limit within which a member can serve on Council (has been set at 18 years and is intended to find a balance between experience and the need for new blood) and the creation of a CEO role intended to manage the largest professional institutes in Malta. We are currently in the process of recruiting a CEO that has the necessary competencies and experience to translate the vision of Council into strategic and action plans to enable us to better support the evolving accountant’s role.
Better utilisation of Information Technology: This is an area where I believe we have achieved mixed results during my presidency. One of the successes was the introduction of the ijournal in May 2014 together with a revamped print edition. We have received favourable comments from Members, which indicate that these have been well received by our members. We are also in the process of rolling out our online CPE facility. We have finalised the technical upgrades that were necessary to our website and content management system so that we would be able to host a repository containing a series of online courses sourced from leading online CPE providers that will be offered at a discount to MIA members. Our staff are in the process of finalising agreements with these well-established providers so that MIA members can benefit from the widest choices possible as from the launch date.
The MIA privilege scheme and the related members’ smartphone application are also in the process of being completed in the coming weeks.
We have however not as yet managed to enhance the website, a project that the Institute was planning to launch in 2013. The project did not come to fruition for various reasons. It is now being combined with a larger project that is also meant to enhance the back office and the generation of pertinent data. I augur that this project will be successfully realised under the next President.
International membership: Our continued membership of regional and international organisations such as the Federation of European Accountants (FEE) and the International Federation of Accountants (IFAC) is very important since through these we are constantly gaining awareness of those regional and International developments, which would need to be taken into consideration by our technical committees. I am pleased to note that William Spiteri Bailey has recently been appointed technical advisor to one of the members of the IFAC SMP Committee. This appointment, coupled with his role as member of the FEE SMP Forum, ensures that the MIA is engaged to the fullest extent on SMP matters.
Education: I consider this to be one of the core pillars of the Institute. Our education committee has been involved on various projects including the revision of the CPE regulations which became applicable in January 2015. This revision was meant amongst other things to simplify and in some cases streamline matters.
We need to continue to provide the means to enable students to obtain their professional qualification which we currently do through our joint scheme with ACCA – a very important development in the history of the Institute. In these past years we have transformed the graduation ceremonies into an event where graduates together with their parents and other loved ones can proudly celebrate their achievement. The guest speaker at this year’s ceremony which was attended by some 450 people was President Emeritus Dr Ugo Mifsud Bonnici who delivered an interesting speech on values in the profession. In 2014 the Institute acquired the full shareholding in BPP Malta Limited and entered into an exclusivity agreement with BPP International to enable our school to continue to provide tuition based on BPP curricula and methodologies. The school is now in the process of implementing a re-branding exercise. We need to step up our efforts and rise to the challenge to attract the brightest students to the profession. We lack the aura of the traditional professions and the excitement of the more modern ones and nowadays we seem to be stuck somewhere in between. As an institute we need to continue to strive to attract to the profession not only numbers but also quality.
Public interest: In my first address as President I had stated that if we only serve our self-interest we will fail. Our values and ethics are essential in discharging our professional responsibilities and no efforts should be spared in making these known to and embraced by our members. In March 2015 our Institute launched a revised Code of Ethics that is based on International standards and considers the fundamental EU principles on Statutory Auditors’ Independence. I would like to take this opportunity to remind ourselves that this code is not a document that is meant to grace our physical or electronic libraries. Indeed it should be an integral part of our genetic code. An Accountant whether in public practice, a PAIB, or employed in the public sector must remain impartial and loyal to ethical guidelines and should be constantly vigilant to reduce the risk of manipulation of accounting records. Greed in the business world could lead to shaving ethical boundaries for the sake of better returns. We, as accountants and warrant holders, should not let a desire to earn a better living get in the way of doing what is right and expected of professionals bound by a code of ethics.
To conclude, on 28 May 2015 the MIA will celebrate its 50 year anniversary from the date when the original MIA merged with the Malta Corporation of Accountants. In these past fifty years the Institute has come a long way and today is the largest professional body in Malta. We are proud that practically all qualified accountants are members of the Institute. Through the foresight and hard work of past Presidents and council members the Institute can take satisfaction in the results it has managed to achieve for its members over the years and in being regarded by government bodies, regulators, constituted bodies, employers and other professional peers as the leading representative of the accountancy profession and sound advocate of public interest. The Institute intends to commemorate this occasion in the coming weeks.
Our interim CEO, Noel Zerafa, who was due to retire at the end of this year handed in his resignation to pursue other opportunities. Mr Zerafa was a long standing employee of the Institute having served for over 18 years as its Secretary General and more recently interim CEO. On behalf of my fellow Council members, I would like to thank him for his years of service and wish him well in his new endeavors.
I am immensely proud of our profession and of the Institute. It is made up of high quality people of integrity and I thank you all for giving me this opportunity to serve as the Institute’s President. I would like to thank also my fellow officers, council members, committees and MIA staff – it is through their hard work and support that progress was registered during this two year term. I would also like to take this occasion to augur all the best to the incoming President.