*FINANCIAL REPORTING ACT 1997

This Act shall come into force on such date as the Minister may, by notification in the Gazette appoint, and the Minister may appoint different dates for the coming into force of different provisions of this Act.

Interpretation

new accounting standards issued by the Board under paragraph 7(1A)(a);

existing accounting standards adopted by the Board under paragraph 7(1A)(b); and

in relation to foreign companies listed on a stock exchange in

Malaysia, acceptable internationally recognized accounting standards;

“Audit Oversight Board” means the Audit Oversight Board established under section 31C of the Securities Commission Act 1993

[Act 498];

“Board” means the Malaysian Accounting Standards Board established under section 7;

“Central Bank” means the Central Bank of Malaysia established under the Central Bank of Malaysia Act 1958 [Act 519];

“foreign company” has the same meaning as in the Companies Act 1965 [Act 125];

“Foundation”

means the

Financial

Reporting

Foundation established under section 3;

“Fund” means the Fund established under subsection 19(1);

“issues bulletin” means a statement issued or approved by the

Board under subsection 7(1A) concerning the interpretation, application or implementation of any approved accounting standards or matters relating to approved accounting standards or any matter relating to accounting practices used for the preparation of financial statements, either generally or in relation to any specific accounting principles or transactions;

Financial Reporting 7

“MASB approved accounting standards”

means approved accounting standards other than acceptable internationally recognized accounting standards;

“Malaysian Institute of Accountants” means the body established under section 3 of the Accountants Act 1967 [Act 94];

“Minister” means the Minister for the time being charged with the responsibility for finance;

“principal officer”, in relation to a public listed company, means a person by whatever name called who is responsible for the conduct of the business and administration of the public listed company, and includes a non-executive chairman of the public listed company;

“Registrar of Companies” means the Registrar of Companies appointed under the Companies Act 1965;

“Securities Commission” means the Securities Commission established under the Securities Commission Act 1993.

to oversee the carrying out of the functions of the Board under section 7; and

to perform any other function as the Minister may prescribe by order published in the Gazette.

Without limiting the generality of functions of the Foundation in subsection (1), the Foundation shall be responsible —

The Foundation shall not, by virtue of or in connection with any of its power under subsections (1) and (2), direct the Board to undertake or omit to undertake any particular project or activity or otherwise affect the exercise of the Board’s power or the performance of the Board’s functions under this Act.

Members of the Foundation

the Secretary

General of the Treasury or his representative;

the Governor of the Central Bank or his representative;

the Chairman of the Securities Commission or his representative;

Financial Reporting 9

(ca) the Chairman of the Audit Oversight Board or his representative;

the Registrar of Companies or his representative;

the Chief Executive Officer of Bursa Malaysia Berhad or his representative;

the President of the Malaysian Institute of Accountants or his representative who shall be a council member of the

Malaysian Institute of Accountants;

the Chairman of the Board;

four other members who possess knowledge and experience in matters of financial accounting and in one or more of the following fields:

accountancy;

The Minister shall appoint a Chairman of the Foundation from amongst the persons referred to in subsection (1).

Meetings of the Foundation

The Chairman of the Foundation shall preside over all meetings of the Foundation.

If the Chairman of the Foundation is absent from any meeting of the Foundation, the members present at the meeting of the

Foundation shall elect one of the members specified in paragraphs 5(1)(a) to (f) present to preside over the meeting.

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Laws of Malaysia ACT 558

Any member of the Foundation may take part in a meeting of the Foundation using teleconferencing or videoconferencing or other electronic means.

A member of the Foundation who takes part in a meeting of the Foundation using teleconferencing or videoconferencing or other electronic means is deemed to have attended the meeting.

Subject to subsections (2), (3), (4) and (5), the Foundation may determine the conduct of its proceedings.

Establishment and functions of the Board

Without limiting the generality of functions of the Board in subsection (1), the Board shall be responsible —

The Board shall, in relation to its functions under paragraph

Approved accounting standards issued or adopted under subsection (1A) may be expressed to apply in relation to —

(Deleted by Act A1233).

Members of the Board

a Chairman;

the Accountant General; and

six other members who possess knowledge and experience in matters of financial accounting and reporting and in one or more of the following fields:

accountancy;

At least five of the members appointed under subsection (1)

shall be members of the Malaysian Institute of Accountants.

The Minister may appoint three advisors to the Board to represent—

The advisors to be appointed under subsection (3) shall be appointed from amongst persons who possess knowledge and experience in the field of accountancy, law, business or finance.

An advisor appointed under subsection (3) shall, unless he sooner resigns or his appointment is sooner revoked, hold office for such term as the Minister may determine.

Meetings of the Board

Six members of the Board shall form the quorum at all meetings of the Board.

Any member of the Board may take part in a meeting of the

Board using teleconferencing or videoconferencing or other electronic means.

Any member of the Board who takes part in a meeting of the

Board using teleconferencing or videoconferencing or other electronic means is deemed to have attended the meeting.

The advisors to the Board shall have the right to attend meetings of the Board but shall not have a right to vote.

A question arising at any meeting of the Board shall be determined by not less than six votes of the members present and voting.

Subject to subsections (2), (2A), (2B), (3), (4) and (6), the

Board shall have power to determine the conduct of its proceedings.

The Board may invite any person to attend any meeting or deliberation of the Board for the purpose of obtaining views on any matter under discussion, but any person so attending shall have no right to vote at the meeting or deliberation.

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Laws of Malaysia ACT 558

Disqualification

who is of unsound mind or is otherwise incapable of performing his duties;

who has been convicted and sentenced to imprisonment for a term of not less than one year;

who has been convicted of an offence involving fraud, dishonesty, or moral turpitude; or

who is a bankrupt, shall be disqualified from being appointed as a member of the

Foundation or the Board, or if he is a member of the Foundation or the Board shall cease to be such a member.

Remuneration

the Minister, in the case of the Chairman; or

Financial Reporting 15

the Chairman, in the case of any other member.

The Minister may at any time revoke, without assigning any reason therefore, the appointment of a member of the Foundation or the Board if he thinks it is expedient to do so.

Vacation of office

A member of the Foundation or the Board shall be deemed to have vacated his office upon his failure to attend three consecutive meetings of the Foundation or the Board without leave of—

The Foundation and the Board shall furnish the Minister with such information relating to their activities as he may, from time to time, require.

Other powers and duties of the Foundation and Board

The Foundation shall, on the recommendation of the Board, appoint a chief executive officer whose functions and duties shall include assisting the Board in the day to day administration of the

Board and in the performance of its functions under this Act.

Employment of officers and servants

The Foundation may make arrangements for the payment to its officers and servants, including a chief executive officer, appointed under subsection 17(2), and their dependants of such retirement benefits, gratuities or other allowances as the Foundation may determine.

The Fund shall consist of—

The Foundation may delegate its function under subsection (1)

to—

Any delegation under subsection (3) shall not prevent the concurrent performance by the Foundation of the Foundation’s function so delegated.

Expenditure charged on the Fund

paying any expenditure lawfully incurred by the

Foundation or the Board including fees and costs, legal or otherwise, and the remuneration of officers and servants employed by the Foundation, including the granting of loans, superannuation allowances or gratuities;

paying any other expenses, costs or expenditure properly incurred or accepted by the Foundation or the Board in the performance of its functions or the exercise of its powers under this Act;

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Laws of Malaysia ACT 558

purchasing or hiring equipment, machinery and any other materials, acquiring land and erecting buildings and carrying out any other works and undertakings of the

Foundation or the Board in the performance of its functions or the exercise of its powers under this Act;

generally, paying any expenses for carrying into effect the provisions of this Act.

Foundation’s financial year

The Foundation shall cause its statement of accounts to be audited by such auditors as it may appoint.

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The Foundation shall as soon as practicable send a copy of the audited statement of accounts together with a copy of the auditor’s report thereon to the Minister who shall cause a copy thereof to be laid before both Houses of Parliament.

Non-application of Act 240

the accounting standards issuing bodies are of international standing and repute; and

the accounting standards of the accounting standards issuing bodies are acceptable for the purpose of financial statements which are required to be prepared or lodged under any law administered by the

Securities

Commission, the Central Bank or the Registrar of

Companies by foreign companies listed on a stock exchange in Malaysia.

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Standards for foreign companies

any acceptable internationally recognised accounting standards; or

MASB approved accounting standards.

Standards for persons other than foreign companies

Subsection (1) shall be applied by the following authorities:

any member of the Foundation or the Board;

any officer or employee of the Foundation; and

any person appointed pursuant to this Act,

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Laws of Malaysia ACT 558

for or on account of, or in respect of, any act done or statement made or omitted to be done or made, or purporting to be done or made, in pursuance or in execution of, or intended pursuance or execution of, this Act, any approved accounting standard, issues bulletin, interpretation, guidance or other release or thing issued under this Act if such act or statement was done or made, or was omitted to be done or made, in good faith.

In this section, the expression “officer” includes any chief executive officer or other officer appointed by the Foundation under this Act.

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Act 558

LIST OF AMENDMENTS

Amending law

Short title

In force from

Act A1233

Financial Reporting (Amendment)

Act 2004

01-01-2005

Act A1427

Financial Reporting (Amendment)

Act 2012

01-01-2012

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Act 558

LIST OF SECTIONS AMENDED

Section

Amending authority

In force from

2

Act A1427 01-01-2012 4

Act A1427 01-01-2012 5

Act A1427 01-01-2012 6

Act A1427 01-01-2012 7

Act A1427 01-01-2012 9

Act A1233 01-01-2005 17

Act A1233 01-01-2005 18

Part IIIA

Act A1233 01-01-2005 26A

Act A1233 01-01-2005 26B

Act A1233 01-01-2005 26C

Act A1233 01-01-2005 26D

Act A1427 01-01-2012 27

Act A1233 01-01-2005 30

Act A1427 01-01-2012