Asean Economic Community And Opportunities For Accountants And Professional Service Providers
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Asean Economic Community And Opportunities For Accountants And Professional Service Providers

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Opportunities for professional service providers in view of the formation of Asean Economic Community by 2015

Opportunities for professional service providers in view of the formation of Asean Economic Community by 2015

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Asean Economic Community And Opportunities For Accountants And Professional Service Providers Presentation Transcript

  • 1. ASEAN Economic Community and Opportunities For Accountants and Professional Service Providers
    Nik Mohd Hasyudeen Yusoff
    CEO and Thought Leader
    Inovastra
    Competitiveness Through Innovation and Strategy
  • 2. ASEAN – an Overview
    The Association of South East Asian Nations (ASEAN) was established on 8 August 1967
    It consists of 10 countries
    As of 2006 ASEAN has a population of 560 people, total land areas of 4.5 million square kilometres, combined GDP of US 1,100 and total gross trade of US 1,400 billion
  • 3. ASEAN - Membership
    Brunei Darussalam
    Cambodia
    Indonesia
    Lao PDR
    Malaysia
    Myanmar
    Philippines
    Singapore
    Thailand
    Viet Nam
  • 4. Some Indicators of demand
  • 5. ASEAN Economic Community
    The ASEAN Economic Community shall be the end-goal of economic integration measures as outlined in the ASEAN Vision 2020.  Its goal is to create a stable, prosperous and highly competitive ASEAN economic region in which there is a free flow of goods, services, investment and a freer flow of capital, equitable economic development and reduced poverty and socio-economic disparities in year 2020.
  • 6. ASEAN Economic Community
    The ASEAN Economic Community shall establish ASEAN as a single market and production base, turning the diversity that characterises the region into opportunities for business complementation and making the ASEAN a more dynamic and stronger segment of the global supply chain. ASEAN’s strategy shall consist of the integration of ASEAN and enhancing ASEAN’s economic competitiveness.
  • 7. Initiatives Pursued So Far
    Mechanisms and measures to strengthen the implementation of its existing economic initiatives including the ASEAN Free Trade Area (AFTA), ASEAN Framework Agreement on Services (AFAS) and ASEAN Investment Area (AIA)
    Accelerate regional integration in the following priority sectors by 2010: air travel, agro-based products, automotives, e-commerce, electronics, fisheries, healthcare, rubber-based products, textiles and apparels, tourism, and wood-based products
  • 8. Initiatives Pursued So Far
    Facilitate free flow of goods, services, investment, capital and labour
    Allow foreign participation of foreign equity: 49% by 2008, 51% by 2010 and 70% by 2015
    Strengthen the institutional mechanisms of ASEAN, including the improvement of the existing ASEAN Dispute Settlement Mechanism to ensure expeditious and legally-binding resolution of any economic disputes
    The above initiatives are pursued through negotiations involving the government and private sectors
  • 9. Initiatives Involving the Accountancy Profession
    Based on the ASEAN Framework Agreement on Services
    Focus on providing market access to accountants into various ASEAN countries and how the services of foreign accountants would be recognised by each government (national treatment)
    ASEAN Mutual Recognition Arrangement Framework on Accountancy Services was signed in 2009
  • 10. ASEAN Mutual Recognition Arrangement Framework on Accountancy Services
    To facilitate the negotiations of MRAs on Accountancy Services between or among ASEAN Member States by providing a structure towards the conclusion of such MRAs
    Areas covered:
    Education
    Licensing
    Demonstration of competency
    Experience
    Reference to IFAC standards
    Domestic regulation
  • 11. Opportunities Drivers
    The need to continue developing the economies within ASEAN; there are developed, developing and newly developing countries
    Globalisation of regulation and standards – IFRS, Basel II
    Improvement of governance, both in the public and private sectors
    ASEAN transforming itself into a ruled-based regional body with the adoption of ASEAN Charter
  • 12. Risks and Challenges
    Domestic regulation which may not be transparent and consistently applied
    Culture and practices which differ from one country to another
    Changing business environment and disjointed responses from various countries
  • 13. Export of “Accounting” so far
    Mode 1 – Business Process Outsourcing services in accounting and finance is taking shape in Malaysia. The presence of captives, which serves a particular company on a global basis, as well as general outsourcing companies is beginning to position Malaysia as a hub of BPO in outsourcing of accounting and finance.
  • 14. Export of “Accounting” so far
    Mode 2 – More local and international higher education institutions in Malaysia offering accounting courses. International accounting bodies are offering their qualification through collaborations with local education institutions. Presence of international students to study accounting is building up.
    Singapore is positioning itself as the hub of accounting services.
  • 15. Export of “Accounting” so far
    Mode 3 – The larger global accounting firms are structuring themselves on regional basis and sharing profit and loss across borders while continuing to comply with domestic regulations of each jurisdictions.
    Services offered cover wide range of areas and not limited to accounting and auditing.
    More new accounting groupings are having presence in this part of the world as well.
  • 16. Export of “Accounting” so far
    Mode 4 – Some small accounting firms have started operations in Asean countries such as Cambodia, Indonesia and Vietnam.
    These operations are through collaboration with local partners, through partnerships or loose arrangements.
  • 17. Some observation
    Export of accounting should be viewed holistically and not limited to the CPC categories
    Opportunities not limited to accountants
    Equity is not really a critical aspect in liberalisation, profit sharing structure goes beyond equity and driven more by competencies and intellectual property
    Competencies demanded in target countries are the critical driver of market access, not what we believe we could export
    There are enough rooms for smaller players, however having access to accounting network helps in opening new markets for smaller firms
  • 18. Potentials for further export
    ASEAN Economic Community provides access to other economics with higher GDP and has larger market demands
    Globalisation of regulation such as implementation of International Financial Reporting Standards would create demands for competent accountants and BPO
    Firms with specialist knowledge and competencies would continue to be able to create opportunities for themselves
    Education and training in accountancy offer great potential for export
  • 19. Issues and Challenges
    Attitude towards competition – even when the market is closed, firms are not excited to compete
    Export ready products and services (Capabilities) – cannot promote good and services which have no demand
    Capacity – most firms, especially professionals, are small and has limited capacity in terms of brainpower and financial capabilities – export through networks would be the way forward
    Government, the largest customer in any economy, should encourage competitive practices
    Over-coordination is not welcomed
  • 20. ASEAN Federation of Accountants
    The ASEAN Federation of Accountants (AFA) was organized in March, 1977. It was established to serve as the umbrella organization for the national associations of accounting professionals of the member countries ASEAN
    Vision - To be globally recognised as the body that represents the accountancy profession in the ASEAN region
    Mission - To develop and promote the accountancy profession in the region in support of the socio-economic enhancement of the AFA member countries
  • 21. ASEAN Federation of Accountants
    AFA’s strategic objectives:
    Strengthening AFA institutional capabilities
    Supporting capacity building of member institutions
    Championing specific issues which would promote the standing of the accountancy profession within the ASEAN region