Saturday, 29 December 2012

Opportunistically Sympathetic

Many of us are concerned and sympathetic towards any human misery. While we may not have any blood relation with them, our human spirit simply does not allow us to look the other way. When tragedy occurs, our thoughts will be with those who ensure difficulties and challenges arising from natural disasters or disasters arising from our own conducts or behaviours.

We all know the Palestinians have been suffering from calamities for many many years. We may have different views of their situation, the fact remains that they are deprived of their rights in their own land and they world stood by watching as if there is nothing more that they could do.

In Muslim countries such as Malaysia, issues relating to Palestine would certainly evoke emotional reactions, especially from the Malays. While they themselves may not necessarily behave like good Muslims, they will go very far when it comes to dealing with Palestinian matters. 

Baitulmaqdis is the first Qiblah for the Muslims and any attempts to change the status of this holy land would not be accepted sympathetically. It is interesting to note the three Abrahamic religions have many things in common about this place but somehow the followers are not able to reconcile their differences even until today.

Unfortunately, this is also a weak spot that is exploited by people who need to be popular. By being champions of Palestinian issues, crooks will be seen as heroes. The emotional attachment of the society towards Palestinians will make them forget the behaviours and conducts of these champions who could be behaving similarly with those who causes the Palestinians to suffer.

In seasons when popularity is important, we will see people wearing Keffiyeh around their necks. Many people will be organising fund raising events to help the Palestinians although they could be lending tacit support to the other side through their misbehaviours. Are these people opportunists? Only Allah knows!

Tuesday, 25 December 2012

When Faiths Intersect

Christmas is about celebrating the birthday of Jesus Christ. It is celebrated in many parts of the world. Jesus is also one of the prophets in Islam who propagated the faith to Allah amongst the people at his time. Thus, Jesus is believed by both Muslims and Christians although there are differences as to who Jesus is/was. 

In a country like Malaysia (actually many other countries share the same situation) where the people are from different races and religions, the ability to accept differences is very important. As the foundation of faith is belief, there will be situations where people from different faiths would have to agree to disagree as the Quran reveals "For you is your religion, and for me is my religion" -  Surah 109; Verse 6.

What makes things more complex in the Malaysian context is the constitutionalisation of Islam. As a Malay is defined to be a person who practices the Malay custom and is a Muslim, Islam is normally viewed not from its original form but from the context of a Malay society. Therefore, some of the beliefs which are considered Islamic could very well be more of Malay values instead. Since a person cannot change his or her race, the issue of Islam, Malay and as what we fondly refer to in Malaysia, "Others", become more challenging to address.

While I could accept that many other societies in the world have similar challenges, we somehow fortify the differences through many policies and institutions instead of trying to accommodate the many differences that we have. It is quite funny that while Muslims in particular believe that Allah created people in many races and colours, they can't accept that everybody should be entitled to similar rights and respect. On one hand they want to be religious, on the other hand their actions do not reflect the faith they believe in.

While today should be a cheerful one to many of us, I hope we should also try reflect on the challenges that we face as a society. Hopefully, the new year will bring more cohesiveness amongst ourselves, irrespective of our races, religions and beliefs.

Thursday, 20 December 2012

2012 IFIAR's Global Survey of Audit Inspection Findings

Key Messages
  • This is the first International Forum of Independent Audit Regulators (IFIAR) global survey of inspection findings summarising issues identified by:
    • Twenty-two IFIAR Members’ inspections of audit engagements for 961 public companies at 98 audit firms;
    • Ten Members’ inspections of audit engagements for 108 major financial institutions at 28 audit firms; and
    • Twenty-three Members’ inspections of 109 audit firms’ internal quality control systems.
  • There are common audit findings among Members in a number of areas (inspection themes), including four that have been discussed by IFIAR with representatives from the six largest international audit firm networks since 2010: professional skepticism, group audits, revenue recognition, and the role of the engagement quality control reviewer.
  • The survey results identify and rank the Members’ most commonly identified audit findings by inspection theme.
  • The survey results suggest that audit firms need to do more to improve the consistency of performance on individual audit engagements, including remediating the inspection findings and determining the possible root causes underlying these findings.
  • The survey data indicates that the scale of Members’ inspection activity at the largest international audit firms varies by jurisdiction.
  • The information in this report may be of use to audit firms, audit regulators, other regulators, policy makers and standard-setters in their efforts to improve audit quality. It also may be of use to investors and audit committees as an indicator of the current status of inspections of auditors of public companies, including major financial institutions in jurisdictions around the world.
The full Summary Survey could be downloaded here.

Kuala Lumpur, 19 December 2012
AOB participated in the first global survey of audit regulators 
Auditors and audit firms need to do more to improve their consistency of performance, noted by the first global survey on audit regulators' inspection findings released by the International Forum of Independent Audit Regulators (IFIAR) yesterday. 

Audit Oversight Board (AOB) Malaysia has been an IFIAR member since September 2010. AOB took part in this global survey carried out IFIAR as it is important for audit regulators to bring together issues commonly faced in the course of carrying out their duties, said Nik Mohd Hasyudeen Yusoff, Executive Chairman of AOB. 

"This is an eye opener for all stakeholders in the financial reporting value chain as the exercise to highlight the strength and weaknesses of the audit industry which could help to enhance the reliability of financial statements. While auditors are expected to do more in enhancing audit quality, other stakeholders such as directors and preparers need to ensure financial statements are prepared in accordance with financial reporting standards before they are audited," he said. 

"Board of directors should be interested to understand whether audit firms that they hire had been inspected by the AOB. This includes understanding the process the firms adopt to enhance audit quality. Another question that they should ask is whether the auditors could perform quality work given the scope and fees which they quoted," Nik added. 

The survey is the first global survey which summarises audit inspection findings identified by independent audit regulators, which are members of IFIAR, located around the world. The survey was designed to identify the level of inspection activity and common inspection findings related to the audits of public companies. The survey also responds to a request from the Financial Stability Board to provide information regarding findings from the inspections of audits of major financial institutions. 

The survey results confirm that many global audit regulators are noting common findings across the different jurisdictions. It indicates that the largest number of inspection findings in audits of public companies occurred in the areas of Fair value measurements, Internal control testing; and Engagement quality control reviews. 

That so many findings recur year after year suggests that audit firms should continue to improve their auditing techniques and their oversight policies and procedures. Audit firms also should take steps to develop a robust root cause analysis to gain a clearer understanding of the factors that underlie the inspection findings and take appropriate actions to remediate those findings.
Many members who responded to the survey also noted that a lack of auditors' professional skepticism on audit engagements was a significant performance issue as well as a possible cause underlying many inspection findings. 

The full summary report could be downloaded at the IFIAR website (


Tuesday, 18 December 2012

Yogyakarta, Revisited Again

Somehow I visited Yogjakarta again. However, for this trip the theme was environment and culture. Off course, we can't resist the lovely local cuisine which are very tasty and reasonable priced as well.

As a snapshot, I went to Mount Merapi again. This time around we could see the  villagers working hard to rehabilitate the area. The government is encouraging them to plant trees which facilitate the efforts to make the place liveable again. 

A villager planting new trees around Mount Merapi
As we travelled back towards the city, we stopped at a Salak plantation. I never knew how many varieties of Salak were there but definitely they were very tasty and sweet. 

One of the varieties of Salak in Yogyakarta
The next stop is the Kraton which captures the history of the Hamengkubuwono dynasty. From where the palace complex is located, we could appreciate the place of the royal family in the hearts and minds of the people in Yogyakarta.

The Kraton in Yogyakarta is the centre of culture and history
Not many foreigners visit the coast of this smallest province in the island of Java. We went to Perangtritis beach which is naturally located in the south. This place was hit by earthquake in the past but the people seemed to have recovered pretty well. There were many activities on the beach for visitors but I will have to go there again to experience the underwater rivers hidden in  many caves located near the beach.

Perangtritis beach, a place with many options for visitors to choose
The city of Solo is where the other royal family resides. The Pakubuwono family lives in this city in Central Java. The palace complex is smaller but retains the character which reflects the stature of the royal family in the Javanese society.

The kraton of the Pakubuwono family in Solo
The Tawangmangu waterfall is located the Grojogan Sewu national park. The journey to this place was certainly exciting as we had to pass paddy fields and mountains. It was worth a visit although it rained when we reach the tourist spot.

A majestic natural scene 
A visit to Yogyakarta would not be complete is we do not visit Malioboro street. This is where tourists could buy souvenirs and closely observe the life of Yogyakartarians.

The Old Market at Malioboro street, the ladies will love coming here
Adya Nelendra is a boutique hotel which provides excellent accommodation and tourism related services. Each room at this beautiful hotel has its own character  which symbolises the culture of the people of Yogyakarta. You are welcome to consider this hotel which I had stayed twice.

A pool in the middle of Adya Nelendra
More stories to come soon!

Saturday, 15 December 2012

Break and Performance

Over many years, the lifestyle in Malaysia has changed considerably. When I was in business, I could felt the shift especially towards the end of the year. Not many people will be around and hence, in organisations which do not have clear level of authorities or delegation, no decision will be made.

One may wonder whether such change is necessary? Well, for those who had been slogging throughout the year, a fairly long and meaningful break is certainly something that they deserve. We are all human beings and the body and mind need a break as well. The idea is that when we go back to work after our holidays, our minds will be fresh to engage issues and challenges at the office, resulting in higher performance.

I suppose with proper planning, we could minimise business disruption and maximise the refreshment process of the people in organisations. While this could require significant efforts, proper planning helps to ensure business could continue unhindered while people could have meaningful time away from work demands, even from their Blackberries. In fact, organisations need to develop policies which address the issue of how much a person who is on leave should be connected to the organisations virtually. Sometimes, being on holiday could be more stressing if the blackberries keep on beeping.

Delegation and clear authority levels would help those who are left in the office to respond to unplanned situations. This will not only ensures customers or stakeholders to experience continuous service, but free those on leave to enjoy the break they deserve. However, I am sure we are used to being told that the person in-charge of the issue is on leave and we have to wait for the person to return before the issue could be attended.

Given that Malaysia celebrates many holidays, some people are questioning whether a total shutdown of business at the end of the year really helps. Given that Chinese New Year will be celebrated in January/February, we have many new years in a short period of time. Sometimes, the start/stop situation could also cause disruption to business and people need to shift into many gears in a short span of time.

Enjoy the holiday season and have a meaningful break.

Monday, 10 December 2012

Langkawi in Pictures

Some pictures of Langkawi, an island on the North West of Peninsular Malaysia.

Photos by Nik Hasyudeen, Nurul Aliah and Hanna Yasmin using Nikon D90 and iPhone 4S.

Cows grazing grass with luxury yachts in the background
The rich man toys, Teluk Burau
Locals trying their early morning luck
Fishing boats resting
A mean to life
The mangrove
The cave
An eagle or "Lang", perhaps how Langkawi got its name
Pulau Kasut or Shoe Island
Sun setting over Teluk Burau
Idaman Suri, where people get their duty free stuff from
People enjoying Power Laksa, very rich and tasty
The Danna, Teluk Burau, Langkawi. Great service.
View from the swimming pool
Firefly will fly you to Langkawi

Saturday, 8 December 2012

Can Langkawi Move Ahead?

A lot of efforts had been made to position Langkawi into one of the attractive tourist destinations globally. Events such as the Langkawi International Maritime and Aerospace Exposition (LIMA) and De Tour De Langkawi are among those efforts. However, where things are at the moment, I am sure you will agree that places like Phuket and Bali are miles ahead of Langkawi.

One of the issue that I find about Langkawi is its value proposition to visitors? Is it a resort island for people to experience peace and tranquility or it is a duty free island where people can buy cheap crockery and liqueur or people come to Langkawi for its amazing scenery? I still feel that there is no clear compelling value proposition being offered by Langkawi.

One of the challenges that we face when competing with other places is the service level offered and the quality of our services. Indonesians and Thais are well known for their excellence service quality, especially in tourism related areas. Can we claim the same for Malaysians? We may argue that the standard of living in those countries are lower, hence people are more hungry for work. Well, our cost of living are not low, therefore our people still need to earn descent income to live a descent life as well. Why are we not performing the same?

Do we need to build more facilities? For example, there is only one operating 18 holes golf club in Langkawi, one is under repair and there is a nine hold course. This is certainly not enough to entice golf ears to come as there is not enough courses for them to play. Perhaps what is missing is a master plan which captures the wholesomeness of Langkawi's offerings to the world. The plan cannot be a one man's vision. It should be embrace by everybody, especially the people of Langkawi. They are the one who will be responsible to deliver the success, not others. Unfortunately, as usual, we will wait for the government to do something, an attitude which will not unleash entrepreneurial potential. We need the government to facilitate but government is not everything. Perhaps an alien concept for many Malaysians especially in rural areas.

Fortunately there are still plenty of space in Langkawi which could be developed. The challenge is into what and by whom? I would certainly hope that this beautiful island will eventually be one of the tourism destination of choice with its natural beauty intact and the benefits shared fairly amongst its population.

Thursday, 6 December 2012

How one woman took a stand against corruption in Indonesia

Corruption is EVIL, full stop. I can't be justified in any manner. Neither it would be kosher is given a different name. While we could see the impact of murder or robbery immediately, the impact of corruption is normally only observable over time.

Are we a society that really hates corruption?

Well, I leave you to figure out for yourselves what the answer would be. I am sure if you are honest enough, it would not be a straight answer.

I saw this article on how a woman went all the way to combat this evil practice until she was moved out from cabinet. I suppose there is a lot of lessons to be learnt and therefore I am sharing with you the article in full.

Happy reading and SAY NO TO CORRUPTION.

World Bank Managing Director Indrawati on the sidelines of the Tokyo Conference on Reconstruction of Afghanistan 08/07/2012 Photo: REUTERS/Issei Kato

WASHINGTON (TrustLaw) – One good woman can make a huge difference in tackling corruption. Sri Mulyani Indrawati is proof.
She earned a reputation as a tough reformer when she cleaned up tax collection in Indonesia and raised government revenues as the first woman finance minister of her country, a post with 60,000 people reporting to her that she held from 2005 to 2010. Today she is a managing director of the World Bank. 
Her work has pushed Indrawati into the Forbes magazine's list of the most powerful women in the world, ranking 65th last year.  But her tough stance also earned her many enemies among Indonesia's business elite, particularly after the tax office published a list of the 100 top tax dodgers which included a coal firm controlled by tycoon and politician Aburizal Bakrie.  Indrawati resigned her post in 2010, some say under political pressure.
Under her leadership, though, economic growth in Indonesia prospered ahead of the global financial crisis, tax receipts rose, public debt fell and foreign direct investment climbed. Indrawati believes that quality of leadership and having the courage to confront corruption is more important than the number of women holding high government positions.
“If you have highly qualified and strong women, even one woman can make a lot of change," she said in an interview. "It is not about the number; it is that these women are very good at articulating their position and pushing their policies.”   
Following is the interview with Indrawati, conducted for a story on women's leadership as part of the coverage for the Trust Women Conference on Dec 4 and 5 in London:   
“From my own experience, when we design development programmes at the grassroots level that involve women and particularly mothers, the quality of public services improves …  At the grassroots level I have more confidence in saying that women focus more on delivering public goods that are good for her family rather than for herself.
“At the public level it is a bit different. The commitment of high-ranking women in public office, in my experience, depends more on their personal values and the ways they got into their position. It cannot be generalized. “
A more open, democratic system where the values and understanding of corruption are more advanced,  is different from a more closed system where public officials often don’t see corruption as a serious offence. Having more women in a closed system has less impact on fighting corruption, she said.
But the broader reason to bring women into government leadership and to promote general equality is that it will create “a more balanced view in the choices of public policy,” she said.  Tackling corruption depends more on the political system and whether the legal institutions are developed and anti-corruption rules enforced, she said.
When Indonesia was less democratic and transparent, corruption was considered normal behaviour, Indrawati said. For example, when salaries were low, taking a bribe was seen as standard to supplement your salary, a matter necessary for survival, and not a conflict of interest, she said.  “Then if you were not getting rich in (holding) a public position, you were seen as stupid.”
In this environment, there were few women in power to introduce any different values. Moreover, the few women that held positions had no budget authority so they had less opportunity for corruption. 
The first step to conquering corruption in Indonesia was to introduce the concept that corruption is an abuse of power, she said. Initially there was very little understanding of this, so even when the legal structures were in place – an anti-corruption bureau and legislation outlawing corruption – practice lagged behind.  The legal framework is a necessary condition, “but it is not sufficient because for political parties and for people in general it was not clear what anti-corruption measures mean in practice,” she said.
 “In my case, I had to change first the source of corruption, which is adequacy of salaries.” When salaries were low, the whole system is willing to accept bribes.  Then she had to work with the public and the media in changing the social perception of the acceptability of corruption.
“Firstly I grew up in a family with strong values. My parents were school teachers,” she said. Those values provided a very important foundation, which was combined with the historic nature of her position.  
“Knowing that I was the first woman minister of finance in the history of Indonesia,  that gave quite a significant amount of pressure, and it gives you the motivation to do something significant for your country ... Yes, there is real pressure or self awareness being the first female finance minister in a country seen as having corruption. You have always to do the right thing,” Indrawati said.
“I would be very ambivalent about that.”  It is more about the quality than the number of women in public office, she said. “If you have highly qualified and strong women, even one woman can make a lot of change… It is not about the number; it is that these women are very good at articulating their position and pushing their policies.”   
However, she agrees that all-male policymaking does not produce the best results
“In a male-dominated environment, I must say it sometimes creates a lot of, well, they can be less sensitive to public perception … In a male dominated politics, men tend to be comfortable among themselves and are not seeking other views.”
“For sure we are making progress in poverty alleviation…. In public policy, when more women are holding political positions and have more control over assets and income, we see a higher impact on ending poverty,” she said.
“The results are already more reliable when women are taking decisions for their families. Women are always thinking about children first, they will spend more on food and health. The evidence here is very strong.”
“And our research shows that gender equality is not only the right thing to do, it is also smart economics. Countries develop faster and better when women are part of the decision-making process.”
In the political arena it is taking longer, she said. “In the realm of public policy, there needs to be recognition of different perspectives….It is not just about combating corruption, it is the whole quality of public policy that will be improved when women have a say….. Women have to be responsible and think beyond a very narrow benefit of self, they think about ‘will it be good for my family and for my children?’  If you aggregate that at a higher level, it will benefit the society.”
Original link to the article

Sunday, 2 December 2012

Close Encounters With My Accountant Friends

I have been writing about accountancy in the last few postings. Being an accountant myself, I have a deep affiliation with this profession and would try to contribute as much as I could. I was a panellist at the latest edition of the MIA International Conference where more than 2,400 accountants from many parts of the world congregated and discuss current issues relevant to the profession and global economy.

This event is slowly but surely being turned into a really international platform for accountants to exchange ideas, thoughts and explore solutions to many emerging issues which are important to our society.

One of the other panellist is Tan Sri Abdul Samad Alias, a prominent accountant that needs no introduction. Well known for his frank and honest views, Tan Sri Abdul Samad holds a number of positions even after his retirement from public practice more than 10 years ago. Although I was the auditor to his private company many years ago, we became closer when we were elected to the MIA Council in 2000. I have learnt a lot from his experience and he had provided me with his support in many occasions.

He is presently the Chairman of Perbadanan Insuran Deposit Malaysia (PIDM), an institution which guarantees our deposits in banks in Malaysia. Having known him for about the same time, his values and commitment towards integrity and honesty are things which we should all emulate.

Last Friday, I was invited for a dinner held by the Institute of Chartered Accountants in England and Wales, Kuala Lumpur City Group. It was held at the new Grand Hyatt located besides the Kuala Lumpur City Centre. Notwithstanding it was held on a Friday evening, the traffic was surprisingly smooth. Not sure whether that was also arranged by ICAEW.

One of the highlights of the evening was the Lifetime Achievement Award which was accorded to Datuk Ali Abdul Kadir. This is the second award that he received this year, a testament for his excellent achievement as an accountant in Malaysia. He presently chairs the Financial Reporting Foundation where I am also a member. He was among the first members of the Audit Oversight Board which I chair. I wrote about Datuk Ali Kadir in an earlier posting.

I saw many young and upcoming accountants at the dinner. Ensuring continuous supply of talents into the profession is very important, not just for the accountancy profession but for nation building. As our economy becomes more globalised and sophisticated, finance and assurance will be critical to support new economic activities. 

On the earlier evening I had dinner with two gentlemen who were visiting a university in Malaysia as part of its assessment programme. Although they were not reviewing any accountancy programme, one of the topics over dinner was on the importance of our education system to support the needs of the industry. Any misalignment between the missions of universities with the need of the market may lead to major problems.

This is where we need to convince more accounting graduates to pursue professional accountancy. In building their career, having qualifications which are recognised by the market is very important. Not only professional accountancy qualifications provide the graduates with the knowledge, skills and values demanded by the market, they would also provide the holders with opportunities beyond our border. Other things being equal, who would appoint to be your CFO? A person with or without a professional accountancy qualification?