As part of the SEGi’s Student Enrichment Program (SEP), The Faculty of Business, Accounting, and Management (FOBAM), SEGi University, successfully conducted a talk titled “Accrual Accounting – The Way Forward” on the 17th April 2019 for SEGi students.
The talk was organised to raise awareness among SEGi students on the importance of accrual accounting in the near future, the differences and benefits of implementing accrual accounting instead of the modified cash accounting, the implications and contributions of accrual accounting in promoting the well-being of the nation, and how it is propelling Malaysia to transform from a developing nation into a developed nation soon.
The talk was delivered by Dr D. Joyce Christina Dharmaraj, C.A. (M), CPA (Aust.), CPFA (UK), Deputy Director, Centre for Professional Development, National Accounting Institute (IPN), Accountant General‘s Department of Malaysia, Putrajaya, on the benefits and issues relating to the implementation of accrual accounting by the government.
The Government and its related bodies have used modified cash accounting where financial transactions are accounted for and recorded when there is an inflow or outflow in the reporting period. In the use of this basis, assets are not capitalised, and liabilities are not reported in the financial statements. All these practices will be replaced with accrual accounting in moving forward with the transition to using the Malaysian Public Sector Accounting Standard (MPSAS) framework in phases. This transition aligns with the Transformation Policy under the New Economic Model and implementation of outcome-based budgeting (OBB) by the Government. This move is indeed timely in upholding good fiscal management and improving the financial management and accounting of governmental bodies. The Accountant General’s Department (AGD) had issued a circular that federal and state governments will apply accrual accounting using MPSAS with effect from 1 January 2018.