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Presentation Outline

Mutual Recognition Agreement: The 2

Challenges and Opportunities for CPAs

Objectives of ASEAN and AFA
History of ASEAN Integration

2015 Accountancy Week Celebration MRA Framework

Philippine Institute of Certified Public Accountants Basic Features of Implementing MRA

Accounting/Auditing Practices in ASEAN

Estelita C. Aguirre
Facts and Figures
Resource Speaker
July 15, 2015 Challenges

Association of Southeast Asian Nations (ASEAN) Objectives of ASEAN


To transform ASEAN into a stable, prosperous
and highly competitive region with

Equitable economic development

Reduced poverty and socio-economic
ASEAN Federation of Accountants (AFA)
AFA Objectives

5 To provide an umbrella organisation for ASEAN

accountants for the further advancement of the
status of the profession in the region.

To establish a medium for closer relations,

regional cooperation, and assistance among
ASEAN accountants

History of ASEAN Integration

Roadmap for the ASEAN Community
7 8

14th ASEAN Summit Chan-Am ( 2009 March 1)

9th ASEAN Summit in Bali Indonesia (2003):
Declaration on the Roadmap for the ASEAN
The declaration of Bali Concord II taking the
Community (2009-2015) was signed, including
ASEAN integration to a higher plane by 2020
ASEAN Political-Security Community Blueprint
12th ASEAN Summit in Cebu (2006) :
ASEAN Economic Community Blueprint
Accelerated the establishment of integration
ASEAN Socio-Cultural Community Blueprint
from 2020 to 2015
ASEAN AGREEMENT Key Characteristic of AEC

Roadmap for an ASEAN Community

One vision. One identity. One Community. 1. With a single market and production base
2. A highly competitive economic region
3. A region of equitable development
4. A region fully integrated into the global

Core Vision of AEC .

Free Flow of
Professional Services
Free flow of goods
Free flow of services
via MRA.
Free flow of skilled labor
Free flow of investment
Freer flow of capital
Harmonized rules and regulations

ASEAN MRA ASEAN MRAs for Professionals
13 14

Engineering Services Dec 2005

ASEAN MRA is a multilateral arrangement among Nursing Services Dec 2006
ASEAN countries or bilateral arrangement between Architecture Nov 2007
two ASEAN countries to enable professionals Medicine Feb 2009
registered in its signatory countries to be equally Dentistry Feb 2009
recognized in another signatory country Tourism Services Nov 2012
Accountancy Services Nov 2014

MRA Framework on Accountancy Education

15 16

Signed in Chan-Am Thailand

Education The AMS agree that a PPA of an AMS who seeks
Licenses recognition in another AMS should have met the
Demonstration of Competency educational requirements in effect in the Country
Experience of Origin. Such individual's educational credentials
Compliance with IFAC Standards and Guidelines may be accepted as having satisfied the
educational requirements of the Host Country's
Feb 26, 2009 NAB and/or PRA.
Licenses Competencies
17 18

Where licenses are required from governmental or

regulatory bodies other than the NAB and/or PRA The AMS recognizes the need to require the PPA
of each AMS, the AMS shall, subject to their seeking recognition to demonstrate competencies
Domestic Regulations, use their best endeavours to assure that the PPA has satisfactory knowledge
to facilitate the PPA of the other AMS to obtain the of the Domestic Regulations of the Host Country.
necessary approval.

Experience IFAC Standards and Guidelines

19 20

The professional competencies and qualifications

A PPA seeking recognition shall meet the threshold for the practice of accountancy in
experience requirements specified by the Host ASEAN Member States shall be established,
Country. maintained and upheld according to the IFAC
standards taking into consideration the Domestic
Regulations of each ASEAN Member State.
Building Blocks of SMOs
(Statements of Membership Obligations)

Implementing MRA on Accountancy Services


Signed in Bali Indonesia by

Brunei, Cambodia, Indonesia, Lao PDR,
Malaysia, Myanmar, Singapore, Thailand,
Vietnam and Philippines

November 2015.


Basic Features of the Implementing MRA 1st Basic Feature of MRA

23 24

(1) Limited flow of accountancy services. MRA

excludes external audit and other services
that require domestic licensing Limited flow of accountancy services:
(2) Creation of Monitoring Councils
(3) Creation of ACPACC MRA Article 3 excludes external audit and other
(4) Recognition of ASEAN Chartered Professional
Accountants (ACPA) services that require domestic licensing.
(5) Setting up of an ACPAR
(6) Acceptance of a Recognized Foreign Professional
Accountant (RFPA) by the host country
Article 3 Scope Article 3 Scope
25 26

3.1 This Arrangement shall cover the provision of 3.2 Notwithstanding paragraph 1, cross-border
accountancy services covered under Central movement of Professional Accountants
Product Classification (hereinafter referred to as providing external auditing services and
CPC) 862 of the Provisional CPC of the United other accountancy-related services that
Nations, except for signing off of the independent requires domestic licensing in ASEAN
auditors report and other accountancy services Member States may continue to be facilitated
that requires domestic licensing in ASEAN Member through bilateral and/ or multilateral MRAs
States. between or among the Member States.

2nd Basic Feature of MRA Monitoring Committee (MC)

27 28

Participating AMS must establish a national MC

MC members are national stakeholders
Creation of a Monitoring Council (MC) in each relevant to the MRA
Member State Functions include developing and maintaining
ACPA application assessment process, and
authorised to certify the qualification and
experience of individual professional accountants
3rd Basic Features of MRA ACPACC
29 30

Creation of ASEAN Chartered Professional At least one appointed representative from each MC
Accountants Coordinating Committee will compose the ACPACC
(ACPACC) Functions include authority to confer ACPA title and
promoting the acceptance of ACPA.
Report progress of work to ASEAN Coordinating
Committee on Services (CCS)

4th Basic Feature MRA ACPA

31 32

ASEAN Chartered Professional Accountant

(ACPA) refers to a natural person who is a national of
Recognition of ASEAN Chartered Professional an ASEAN Member State and is assessed by the
Accountants (ACPAs) NAB and/or PRA of any participating ASEAN Member
States as being technically, morally, and legally
qualified to undertake professional accountancy
Qualifications of an ACPA

Accredited 5th Basic Features of MRA

degree/professional 34
NAB/PRA certification
examination program
no record of serious
violation on technical, Valid professional
professional or ethical registration
standards for certificate in the
Country of Origin
accountancy practice
(CO) by NAB/PRA Setting up of an ASEAN Chartered
Professional Accountants Register (ACPAR)
Comply with
Continuing 3 years or more of
Professional relevant post
Development qualifying
(CPD) policy of practical
the CO experience within
a 5 year period

ACPAR 6th Basic Features of MRA

35 36

The ASEAN Chartered Professional Accountant (6) Acceptance of a Recognized Foreign Professional
Register is where all ACPA are emplaced upon Accountant (RFPA) by the host country through
acceptance of the application by the ACPACC and NAB/PRB
payment of the necessary fees.
NAB and/or PRA Country of Origin
37 38

Host Country RFPA

39 40

A Registered Foreign Professional Accountant (RFPA)

refers to an ACPA who has successfully applied to
and is authorized by the NAB and/or PRA of a Host
Country to work, not in independent practice, but in
collaboration with one or more Professional
Accountant of the Host Country.

Process to Become an ACPA & RFPA


MC assesses the
Responsibility of NAB and/or PRA
accountant in 42
accordance with
NAB/PRA approves NAB/PRB rules and
application after submit to ACPACC ACPACC receives and
assessment of ACPA evaluates application
to be permitted to
work as RFPA
if applicant has
complied fully with the
Consider application and authorize ACPA to
requirements apply as Registered Foreign Professional
Accountants (RFPA)
ACPA submits
Monitor and assess the professional practice
Successful candidates
application to NAB/ to pay ACPA of the RFPA
PRA (host country) subscription fees to
to become an be listed on the

Practices in the ASEAN Current Status of Profession

43 44

1. Recognition of Foreign Certifications

2. Accounting Education
Accounting and Auditing Practices 3. Professional Examination
AFA and World Bank Findings 4. Relevant Practical experience
5. CPD Units
6. Independence and Ethics
7. Accounting Standard Setting
Source: World Bank and AFA Report on 8. Financial Reporting Standards
Current Status of the Accounting and Auditing 9. Auditing Standard Setting
Profession in ASEAN Countries Sept 2014
10. Quality Assurance and Oversight
1.Recognizes Foreign Certifications 2. University Accounting Education
45 46
Brunei- CPA Australia, ACCA, CCANZ, ICAEW, ICAI
Brunei NA as long as members of ACCA,ICAEW, etc
Cambodia- CPA Australia, ACCA, MIA, PICPA, ISCA
Cambodia Not clear
Indonesia required
Laos recognize foreign certification subject to test
Laos Syllabus to be reviewed to enable certification
Malaysia required
CAANZ,ICAIndia, CanadaICA,CPA Australia
Myanmar required
Myanmar - None
Philippines - required
Philippines - None
Singapore required
Singapore- CPA Australia, ACCA, ICAEW w/pathway
Thailand required
Thailand -None
Vietnam required
Vietnam ACCA forVAA ; CPA Australia for VACPA

3. Professional Examination 4. Relevant Practical Experience

47 48
Brunei NA Brunei 3 years
Cambodia Not clear Cambodia 3 years
Indonesia Yes, IAI and IAPI Indonesia 3 years
Laos Yes, by LICPA and MoF Laos 3 years
Malaysia MIA:No Exams for recognised degree; Malaysia - 3 years
For unrecognised degree Yes ; for MICPA -Yes
Myanmar - 2 years
Myanmar Yes
Philippines 3 years for public practice only
Philippines Yes, by the BOA
Singapore 3 years post/5-yrs pre-post qualification
Singapore Yes, by ISCA, if no accredited degree
Thailand 3 years
Thailand Yes, by FAP
Vietnam 5 years
Vietnam Yes, by the MoF
5. CPD Units 6.a Independence & Ethics
49 50

Brunei Per British Commonwealth PAOs requirements Brunei IFAC Code of ethics (CoE)
Cambodia - 40 hours per one year Cambodia KICPAA CoE
Indonesia 120 hours per 3 years Indonesia Various rotation rules/various cooling period
Laos 120 hours per 3 years Laos LICPA CoE based IFAC CoE
Malaysia 120 hours per 3 years Malaysia MIA based on IFACs CoE
Myanmar 120 hours per 3 years Myanmar - MAC law in line with IFACs CoE
Philippines 60 hours per 3 years Philippines Code of Ethics based on 2010 IFACs CoE
Singapore 120 hours per 3 years Singapore ISCAs is based on IFACs CoE
Thailand 18 hours per 1 year Thailand Code of Ethics based on 2012 IFACs CoE
Vietnam 40 hours per 1 year Vietnam Code of Ethicsbased on IFACs CoE

6.b Rotation 6.c Cooling Period

51 52

Brunei adopted IFAC Code of Ethics for Banks Brunei No information

Cambodia no mention in CoE; SECC/NBC sets 3 year Cambodia NBC silent; SECC 3 years
Indonesia All audits: Partner - 3 yrs; Audit firm- 6 yrs Indonesia All audits 1 yr; listed Cos- 3 yrs
Laos Not stated in any legislation Laos Not stated in any legislation
Malaysia Audit partners 5 years; no firm rotation Malaysia -Audit partners -2 yrs, banks audit partner-5yrs
Myanmar no information Myanmar No information
Philippines Audit partners 5 yrs for listed Cos Philippines Audit Partners 2 yrs
Singapore listed Cos/Banks -5yrs/KAPs forPIEs -7 yrs Singapore listed Cos/KAPs for PIEs/other audits 2 yrs
Thailand Audit partners 5 yrs for PIEs Thailand Audit Partners for PIEs 2 yrs
Vietnam No information Vietnam No information
7. Accounting Standard Setting 8.a. IFRS
53 54

Brunei Brunei D. Accounting Standard Council Brunei IFRS for PIEs since 2014
Cambodia National Accounting Council Cambodia CIFRS for listed, insurance since 2012
Indonesia IAI Financial Accounting Standards Board Indonesia IFAS based on 2009 IFRS, excl IAS 1,41,15
Laos Accounting Dept of the MoF Laos - IFRS for listed Cos starts 2017
Malaysia Malaysian Accounting Standards Board Malaysia MFRS for listed Cos, banks,insurance
Myanmar MAC Myanmar MFRS for public Cos, financial institutions
PhilippinesPhil Financial Reporting Standards Council Philippines PFRS large/publicly accountable entities
Singapore Accounting Standards Council Singapore SFRS for Cos
Thailand Thai Acctg Standards Setting Committee Thailand TFRS based on 2013 IFRS for PAEs
Vietnam Ministry of Finance Vietnam VAS developed based on IFRS

8.b. IFRS for SMEs 9. Auditing Standard Setting

55 56

Brunei Brunei GAAP for Non-PIEs Brunei No legally required auditing standards;
Cambodia CFRS for SMEs beginning 2010 Cambodia CISA which is the same as ISA
Indonesia SAK-ETAP for Non-PIEs Indonesia SPAP which is fully consistent with ISA
Laos LFRS for SMEs beginning 2017 Laos would promulgate in line with ISA
Malaysia Msian Private Entity Reporting Standards Malaysia- ISA adopted as MASA
Myanmar MFRS for SMEs adopted Myanmar ISA adopted as MSA
Philippines PFRs for SMEs beginning 2010 Philippines ISA adopted as PAS
Singapore SFRS for qualifying SMEs Singapore ISA adopted as SSA
Thailand - TFRS for SMEs to start in 2017 Thailand ISA translated into Thai with no modification
Vietnam IFRS for SMEs not adopted yet Vietnam VSA closely aligned with ISA
10. Oversight /Quality Assurance
57 58
Brunei PAOC/planned for 2014
Cambodia QCC of KICPAA/adopted ISQC in 2010
Indonesia- PPJAP of Supreme Audit Board
Lao PDR MoF in-charge of QAR
Malaysia MIA Practice Review Program for Non-PIEs Are we ready for it?
auditors; Audit Oversight Board for PIEs auditors
Myanmar - Compliance Review Committee
Philippines BOA; with court injunction deferring QAR
Singapore- ACRA for PIEs/ISCA for non-PIEs
Thailand SEC for listed/FAP for non-listed
Vietnam A Dept of MOF implements QAR

Starting Business in ASEAN

What are the realities?
59 60
3 Singapore
ASEAN today is 10 very different countries at very 16 Malaysia
different stages of development: 85 Lao PDR
High Income economies Singapore & Brunei 91 Thailand
Upper Middle Income economies Malaysia, 109 Vietnam
Thailand and Indonesia 137 Brunei Darussalem
Lower Middle Income economies Philippines, 170 Philippines
175 Indonesia
Vietnam,Laos and Cambodia
184 Cambodia
Low Income economy - Myanmar 189 Myanmar
Starting Business in ASEAN Doing Business in ASEAN
2015 2014
61 62
Singapore 1
13 Malaysia 6 Malaysia
85 Lao PDR 18 Thailand
75 Thailand 59 Brunei Darussalam
125 Vietnam 99 Vietnam
137 Brunei Darussalem 108 Philippines
161 Philippines 120 Indonesia
155 Indonesia 137 Cambodia
184 Cambodia 159 Lao PDR
189 Myanmar 182 Myanmar

Doing Business in ASEAN Realities in Starting a Business

2015 2014
63 64
1 Singapore It takes an average of:.
18 Malaysia 3 procedures & 2 & 1/2 days - Singapore
26 Thailand 3 procedures & 6 days - Malaysia
59 Brunei Darussalam 4 procedures & 17 & 1/2days Thailand
78 Vietnam 10 procedures & 34 days Vietnam
95 Philippines 15 procedures & 35 days - Philippines
114 Indonesia 10 procedures & 48 days - Indonesia
137 Cambodia
6 procedures & 92 days - Laos
159 Lao PDR
182 Myanmar
From the Speech of Dato Timothy Ong June 6, 2014 in AIM Manila
Global Competitiveness Market
2014-2015 (144
65 Economies) Wobbly start.
66 Wobbly still?

Singapore 2 In September 2004, Statistically Speaking featured

Malaysia 20 the article, The ASEAN Where Do We Stand? Or
Wobble?. It reported that the Philippines was
Thailand 31
somewhere in the middle among the 10 ASEAN
Indonesia 34
countries for most indicators about kulelat among the
Philippines 52 original ASEAN members (Indonesia, Philippines
Vietnam 68 Thailand, Malaysia, and Singapore but still generally ahead of
Lao PDR 93 the Plus Five (Myanmar, Brunei, Lao PDR Cambodia and
Vietnam). The said article promised that, six years
Cambodia 95
from now, we will find out if we could walk straight or if
Myanmar 134
our feet continued to wobble and our minds had
Brunei Data Not Available started to boggle.
Source: World Economic Forum Borrowed from Dr. Ben Dioknos ppt presentation

Wobblier after 8 years

Foreign Direct Investments Trend

In 2012, after 8 years, Dr. Romulo A. Virola, the 68

former Secretary-General of the National
Statistical Coordination Board wrote: Statistics
show that there are more bad news than good
news! Eight years ago, we wrote how wobbly we
were compared to our ASEAN neighbors. Sadly,
based on the statistics presented, the Philippines
appears to be even more wobbly.

Note: 2014 FDI figure for Phil is very encouraging

Borrowed from Dr. Ben Dioknos ppt presentation
Foreign Direct
Investment Foreign Direct

Singapore Indonesia Thailand Malaysia Vietnam Philippine Philippines Cambodia Myanmar Laos PDR Brunei

2012 60,980 19,138 10,699 9,400 8,368 2,797 2012 2,797 1557 1,354 294 865
2013 56,138 18,443 12,999 12,297 8,900 3,859 2013 3,859 1,274 2,621 427 726
2014 72,098 22,276 11,538 10,714 9,200 6,200 2014 6,200 1,726 946 913 568

Share 53% 16.4% 8.5% 7.9% 6.8% 4.6% Share 4.6% 1.3% 0.7% 0.7% 0.4%

Source: ASEAN Foreign Direct Investment Database as of 26 May, 2015 Source: ASEAN Foreign Direct Investment Database as of 26 May, 2015

Per Capita GDP

Purchasing71Power Parity 72

Country Rank in the World Rank in ASEAN GDP (Per Capita)

Indonesia 102 4 $10,641
Thailand 82 3 $14,354
Malaysia 51 2 $24,654 The Challenges . . .
Singapore 3 1 $82,762
Philippines 119 5 $ 6,962
Vietnam 126 6 $ 5,635

Source: All figures are from IMF 2014 published in April 2015
Challenges73 for ASEAN Challenges
for AFA

Implementation of MRAs
Providing assistance to ASEAN member bodies
on capacity building of accountants through
Harmonization of qualifications of professionals exchange of knowledge and best practices
through AQRF
Coordinate with each member bodies to
Commitment to achieve the free flow of trade in update the information contained in
services by 2015 as outlined in the AEC Blueprint. (1) The AFAs Easy Guide to Setting up
Accountancy Practices in ASEAN Countries; and
Need to enhance its effort on services facilitation (2) The 2014 AFA World Bank Report on
and cooperation activities, to complement the Accountancy and Auditing Practices in ASEAN
liberalization efforts.

Challenges for AFA Member-Bodies

Challenges for75 AFA Members
Compliance with IFAC SMOs (as of Oct 6, 2014)
Brunei Darussalam (BICPA) Oct 2013
Cambodia (KICPAA) Aug 2014
Accelerating compliance with IFAC SMOs
Indonesia (IAI) May 2013
Providing quality CPD seminars and
Laos PDR (LICPA) In progress
workshops for accountants
Bringing back the public confidence in the Malaysia (MIA ) Nov 2013
audited financial statements through effective Myanmar (MICPA) In progress
implementation of QAR Philippines (PICPA) Jan 2014
Advocacy to push reforms in respective Singapore (ISCA) Jul 2012
government to improve the ranking in doing Thailand (FAP) Feb 2014
business Vietnam (VAA) Nov 2012

Membership of AFA Member Bodies
Membership of Member Bodies As of October 1, 2014
As of October
77 1,2014 78

MemberBodies Regular Provisional Junior Student Corporate/ Total

Nodies Members Members Members Members Firms

BICPA - 58
BICPA 49 9 58
IAI- 21,732
IAI 17920 3703 109 21732
KICPAA - 258
KICPAA 155 20 34 49 258
LICPA - 176
LICPA 176 176

MIA 30,994 30,994

MIA - 30,994
MICPA 595 595
MICPA - 595
PICPA 22,072 22072 PICPA 22,072
ISCA 28069 28069 ISCA - 28,869
FAP 64635 64635 FAP- 64,635
VAA 8,000 8,000 VAA - 6,000
TOAL 173465 29 3703 34 158 177389

Challenges for
Government Challenges for

Harmonizing and streamlining of processes and Proper implementation of the international

procedures accounting standards
Effective implementation of the International
Improving of standing in the World Bank Survey Auditing Standards in the conduct of audit
in starting and doing business in the country Compliance with CPD, using the PICPA CPD
Competency Framework based on IEAS
Improving standing in FDI Confidence Index Production of credible and reliable FSs
Levelling up to become globally competititve
For BOA - operationalizing the Monitoring Council
and providing guidance in raising the bar for
Filipino CPAs to become globally competitive