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Alert | Accountant’s Reports Prepared by Unqualified Persons

Circular No 141/2023
Dated 16 May 2023

The Bar Council has recently been made aware of several Accountant’s Reports that had been prepared by unqualified individuals. 
The discovery was made during the renewal process for the Sijil Annual and Practising Certificate (“SAPC”) 2022 applications where the Accountant’s Report submitted by a Member did not specify the accountant’s qualifications.  The SAPC application was rejected and the Member was requested to provide the qualifications of the individual who prepared the Accountant’s Report.  It was later confirmed that the individual who had prepared the Accountant’s Report was not a qualified accountant (hereinafter referred to as the “unqualified person”) as defined in section 79 of the Legal Profession Act 1976 (“LPA”). 
In the renewal process for SAPC 2022, the Bar Council discovered that the same unqualified person had prepared Accountant’s Reports for 17 Members of the Bar from eight different law firms.  All of the Members who had engaged the services of the unqualified person were requested to resubmit their Accountant’s Reports and ensure that the Accountant’s Reports conform with the Accountant’s Report Rules 1990 (“ARR 1990”). 
Members are hereby reminded of section 79 of the LPA, which states that “…every advocate and solicitor shall, unless exempted by the Bar Council, deliver to the Secretary of the Malaysian Bar with every application made by him for a Sijil Annual a report signed by an accountant, referred to as an “accountant’s report”…”.  
Section 79(4) of the LPA defines an “accountant” as “an approved company auditor as defined in the Companies Act 1965”.
Rule 3 of the ARR 1990 states the following:
“(1) An accountant shall be qualified to give an accountant’s report on behalf of a solicitor if-
  1. he is an approved company auditor as defined in the Companies Act 1965 [Act 125]; 
  2. he has neither been at any time during the accounting period, nor subsequently, before giving his report, become a partner, clerk or servant of such solicitor or of any partner of his; and 
  3. he is not subject to notice of disqualification under subrule (2).”
Members should also note that Rule 3(2) of the ARR 1990 lays out the circumstances that would disqualify an accountant from being a qualified person that can prepare an Accountant’s Report.
What can you do?
We urge Members to adopt good risk management and due diligence practices when it comes to soliciting the services of an accountant.  The following is a non-exhaustive list of suggested best practices to minimise the risk of having an unqualified person preparing your Accountant’s Report:
  1. Request the accountant’s credentials from the onset;
  2. Before appointing the accountants, conduct a basic background reference check and general due diligence such as cross-checking the accountant’s credentials with the Malaysian Institute of Accountants (“MIA”); 
  3. Periodically check the validity of the appointed accountant’s credentials as an approved company auditor; 
  4. Practice good governance for financial reporting by having a policy to change the appointed accountant every couple of years; and
  5. Report suspected or confirmed incidents of unqualified persons offering services such as the preparation of the Accountant’s Report to MIA and to the Bar Council.
Members of the Bar are advised to take note of the above, and be guided accordingly.
Should you have any enquiries, please contact the Bar Council Professional Indemnity Insurance and Risk Management Department by telephone at 03-2050 2001 or by email at

Issued by: Arthur Wang, Chairperson, Bar Council Risk Management Committee