gradmalaysia's Industry Insights delivers quick expert perspectives on current industry trends, hiring insights and useful tips for fresh graduates gearing up to kickstart their careers with confidence and success.
About the Interviewee
Andrew Heng has a Master of Business Administration from the University of Manchester and a Bachelor of Commerce and Law from the University of Western Australia.
He is a Chartered Accountant of the Malaysian Institute of Accountants (MIA), an approved Auditor and Liquidator under the Malaysian Companies Act 2016, a registered Auditor with the Malaysia Audit Oversight Board, a Chartered Member of the Institute of Internal Auditors Malaysia, a Certified Financial Planner with the Financial Planning Association of Malaysia, a Chartered Valuer and Appraiser of the Institute of Valuers and Appraisers, Singapore under the Singapore Accountancy Commission, as well as a Member of the ASEAN Chartered Professional Accountants.
Andrew is a Member of the Insolvency Practitioners Association of Malaysia, a Fellow of CPA Australia, a Fellow of Chartered Accountants Australia and New Zealand, as well as a Member of Kampuchea Institute of Certified Public Accountants and Auditors Cambodia. Andrew was also admitted as an Advocate & Solicitor of the High Court of Malaya. He was previously a council member of the Malaysian Institute of Accountants.
Q: How is blockchain technology being implemented in financial reporting and auditing within the Malaysian accounting industry?
Although blockchain technology holds significant potential to revolutionise the financial reporting and auditing industry, much of it is still theoretical. This is largely attributed to the technical know-how and readiness of the industry to apply and adopt blockchain technology. In other words, we know that this technology exists and we know its potential, but how do we apply it? How do we get everyone on board?
In short, while there are progressive efforts from all parties to explore and develop blockchain applications, this is still slow-going for the Financial Reporting and Audit industry, and it might be a while before we see the Malaysian accounting landscape transformed.
Q: What challenges and opportunities does the adoption of blockchain pose for accounting professionals in Malaysia?
Let’s look at the opportunities first:
- Enhanced Efficiency and Automation: Blockchain's automation capabilities can streamline tedious tasks like reconciliation and data verification, freeing up time for higher-level analysis and advisory services.
- Improved Transparency and Trust: Blockchain's immutable ledger enhances the transparency and traceability of financial transactions, boosting trust with stakeholders and reducing fraud risks.
- New Service Offerings: Accounting professionals can develop new service offerings leveraging blockchain technology, such as audit trails, smart contracts, and blockchain-based accounting systems.
- Increased Demand for Expertise: As blockchain adoption grows, skilled accounting professionals with blockchain knowledge will be in high demand, offering career advancement opportunities.
Challenges:
- Regulatory Uncertainty: Lack of clear regulations regarding blockchain applications in accounting creates uncertainty and hinders widespread adoption.
- Technical Expertise: Adapting to blockchain requires learning new technical skills and understanding complex cryptography, which can be daunting for some professionals.
- Scalability and Interoperability: Current blockchain platforms might not be scalable enough for large-scale financial data, and ensuring interoperability between different platforms remains a challenge.
- Cost and Complexity: Implementing and maintaining blockchain-based systems can be expensive and require significant technical expertise, posing a barrier for smaller firms.
- Data Privacy Concerns: Balancing transparency with data privacy in a blockchain environment requires careful consideration and potential adjustments to current practices.
Overall, the adoption of blockchain presents a unique opportunity for Malaysian accounting professionals to embrace innovation and expand their skill sets.
However, navigating the challenges posed by regulation, technical demands, and cost considerations will be crucial for successful adaptation and maximizing the potential benefits.
Q: What skills do accounting graduates need to navigate and leverage blockchain technology effectively in the Malaysian accounting sector?
While core accounting principles remain essential, blockchain presents new opportunities and demands for evolving skill sets among accounting graduates.
Additional skills set could include:
- Blockchain fundamentals: Understanding core concepts like distributed ledgers, consensus mechanisms, and smart contracts.
- Basic programming skills: Familiarity with languages like Python or Solidity (for smart contract development) can be beneficial.
- Data security and privacy: Understanding blockchain's security features and data privacy considerations.
- Data analysis and visualization: Extracting insights from blockchain data and presenting them effectively.
Enhanced Soft Skills:
- Adaptability and continuous learning: Staying updated with evolving blockchain technologies and regulations.
- Innovation and creativity: Identifying potential applications of blockchain in accounting and suggesting innovative solutions.
- Critical thinking and problem-solving in a new context: Analyzing blockchain-based financial data and addressing challenges related to integration and adoption.
By developing these skills and remaining informed, accounting graduates can position themselves to thrive in the evolving accounting landscape shaped by blockchain technology.
Q: How are regulatory bodies in Malaysia responding to the use of blockchain in accounting, particularly in terms of ensuring compliance and data security?
Regulatory bodies in Malaysia are cautiously optimistic about the potential of blockchain in accounting, but they recognise the need for a balanced approach that ensures compliance, data security, and consumer protection.
- The Securities Commission Malaysia (SC) published a "Guidance Note on Digital Assets" in 2019 (updated 05 Feb 2024), acknowledging the potential of blockchain to improve transparency, auditability, and efficiency in financial reporting.
- Various professional bodies had issued position paper on Blockchain technology outlining potential applications and challenges in accounting. There is research done, conferences, training are conducted - all looking into this our readiness for technology.
- Bank Negara Malaysia (BNM) has also released multiple articles and statements about blockchain technology, highlighting its potential and ongoing exploration within the Malaysian financial landscape. BNM maintains a cautious but open-minded approach towards blockchain technology, acknowledging its potential while emphasizing responsible innovation and regulatory considerations.
Overall, regulatory bodies in Malaysia are taking a proactive approach to understand and regulate blockchain in accounting. While specific regulations are still evolving, they emphasize ensuring compliance, data security, and consumer protection before widespread adoption.
- The Malaysian government's National Blockchain Roadmap highlights the need for a balanced approach to regulation that fosters innovation while managing risks.
- Collaboration between regulators, industry players, and academia will be crucial for developing effective regulatory frameworks for blockchain in accounting.
- Continuous monitoring and adaptation of regulations will be necessary as blockchain technology evolves and new applications emerge.
Q: In what ways does blockchain contribute to the overall reliability and trustworthiness of financial information in the Malaysian accounting industry?
Blockchain technology holds the potential to significantly enhance the reliability and trustworthiness of financial information in the Malaysian accounting industry, but it's still in its early stages of adoption, and some limitations remain.
Contributions to Reliability and Trustworthiness:
- Immutability
- Transparency
- Enhanced Auditability
- Reduced Reconciliation Time
- Data Security
As mentioned earlier, there are still challenges that need to be addressed for its full impact to be realized, including regulatory clarity, wider adoption, and upskilling of professionals will be crucial factors in unlocking the potential of this technology.