Date issued: 25 June 2007

A large number of charitable organisations have not submitted accounts to the Registrar of Societies, according to research funded by CPA Australia.

Out of 250 companies approached to obtain their annual reports, only 32 responded by sending their annual reports.

The remaining replied to say their annual reports were confidential. Since the organisations are required by law to submit their annual report to the Registrar of Societies, attempts were made to obtain the reports of 57 charitable organisations selected at random from the registrar. However, none of the 57 had submitted their reports.

The research, entitled State of Charity Accounting in Malaysia, undertaken by Dr Radiah Othman of Universiti Teknologi MARA (UiTM), was based on the 32 annual reports and interviews from 20 of the companies which supplied them.

It showed that many charitable organisations do not have proper audits done due to the high costs involved.

‘Audit costs can be anywhere from RM700 to as high as RM15,000 which leaves little for charity,’ said Radiah.

One recommendation in the research report is for the audit fees to be regulated by the Malaysian Institute of Accountants (MIA).

The audit issue was among the research findings discussed at CPA Australia’s recent research seminar, ‘Accounting research and practice: bridging the gap’, that saw recipients of CPA Australia’s supplemental research grants present the findings of their research to fellow academics, accounting practitioners and industry representatives.

CPA Australia started offering supplemental research grants in 2002 to encourage research in accounting, finance and related statutory topics or those that are specific to Malaysian corporate governance, business practices and financial management.

‘The supplemental research grant is intended to be seed money to enable applicants to get started, as financial sources usually take time,’ said Malaysian divisional president Christina Foo.

In particular, the research grant is intended for staff and research scholars of Malaysian Government and private universities, twinning colleges and branch campuses whose degree programs have been approved by their Australian principals.

‘To date, we have had encouraging response from academics who have proposed and put forth research topics that add value to the overall development of the accounting profession in Malaysia,’ said Christina. 

In espousing the benefits of effective research, Dr Normah Omar, director of Accounting Research Institute UiTM, said research enabled academics to connect with companies.

‘By undertaking the right kind of research, academics can establish contacts and build relationships with companies that will be helpful when negotiating student training and internship opportunities,’ said Normah.

Though concurring with Normah, Professor Dr Rashidah Abdul Rahman, head of Corporate Governance Research Centre, UITM, voiced her frustration at companies unwilling to divulge information to researchers.

‘We are keen to undertake research on actual companies that have defaulted but with companies unwilling to co-operate and with no access to the Securities Commission (SC), how do we get the necessary information?’ asked Rashidah, who was one of the panellists who discussed the hurdles to overcome in bridging the gap between academia and practice.

SC senior executive director market supervision Ranjit Singh, another panelist, said, ‘Perhaps the SC should start looking at giving access to encourage case studies on actual situations.’

CPA Australia’s research committee chairman Dr Veerinderjeet Singh suggested there was a need to establish an organisation to collate the type of researches undertaken at the various institutions of higher learning.

‘Currently, with no central database on the various researches undertaken, there is repetition and wastage,’ said Veerinderjeet.

Over 120 people from universities across Malaysia attended the seminar.

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