C o lo n ia l Infliicncc on C o r p o r a te Legal E n v ir o n m e n t

Accounting Education and Training in Asean: The Western Influence and The Experience of Singapore, Malaysia,

Indonesia and Brunei Darussalam

PAY. Senarntli Yapa

Department of Management Studies IJniversits of Brunei Darussalam

A bstract

Th is p ap er p r o vid es an an alysis o f the nat ure o f acco u n t in g ed u cat io n and t r ain in g in f o u r A SPA N ' count ries- Sin g ap o r e. M al aysi a. In d on esia, and

Br u n ei Dar u ssalam . A l l t hese cou n t r ies w er e und er co lo n ial rule for cen t u ries. Th er ef o r e, it p r o vid es a r evi ew o f in l lu en ce b\ t heir co lo n ial p o w er s in acco u n t in g ed u cat io n and t r ain in g and gain insight int o w h y som e

co u n t r ies are st ill f o l l o w i n g the co lo n ial syst em w h i l e ot hers h ave shif t ed aw ay. A s evi d en ced h o w ever , w h i l e Sin g ap o r e has sh own signs o f m o vin g aw ay fr om co lo n ial syst em . M al ay si a seem s to be in the pr ocess o f such a m o ve. A p p ar en t !}. In d o n esia has m o ved from the Du t ch to t he U S syst em

in its acco u n t in g ed ucat ion and t r ain in g . Br u n ei Dar u ssalam is st ill in r u d im en t ar y st age o f its acco u n t in g d evelo p m en t and f ollo w ing t he Br it ish syst em o f acco u n t in g ed u cat io n to prod uce account ant s. Th is pap er

in d icat es t hat i f a d evel o p in g co u n t r y con t in u es to depend h eav i k on co l o n i al syst em o f acco u n t in g ed ucat ion w it h o u t co n sid er in g t he local en vi r o n m en t , inst it u t ions and the local needs, the con seq u en ces can be less t han d esirab le.

Accounting education and practice. Professional accounting bodies. Colonial inlluence. Association of South Past Asian Nations (ASPAN), Accounting in d e v e l o p i n g c o u n t r i e s .

Keywords:

Introduction

During the past two decades, many developing countries including the Association of South Past Asian Nations (ASPAN) have shown signs of erosion from

c o l o n i a l i n f l u e n c e s . I n t h e e a r l } y e a r s o f c o l o n i a l p e r i o d , t r a d e a n d i n v e s t m e n t in these countries were set up by British. Dutch and US investors. Therefore, the law

e n f o r c e m e n t , g o v e r n m e n t a d m i n i s t r a t i o n a s w e l l a s t h e e d u c a t i o n a n d t r a i n i n g in

A S P A N w e r e d e v e l o p e d u n d e r t h e d i r e c t c o n t r o l o f s u c h c o l o n i a l p o w e r s . In r e c e n t y e a r s , h o w e v e r , t h e r e h a s b e e n t r e m e n d o u s i n t e r e s t in i m p r o v i n g t h e a c c o u n t i n g p r o f e s s i o n in A S P A N m a i n l y d u e t o its i m p a c t o n e c o n o m i c d e v e l o p m e n t ( B r i s t o n ,

1990; Cruz. 1993: World Bank. 1993). Although a growing body of literature has examined various aspects of the accounting systems and their implications for

A S P A N . o n e a s p e c t t h a t h a s n o t r e c e i v e d a d e q u a t e a t t e n t i o n is t h e c o n t i n u i n g

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c o l o n i a l i n f l u e n c e o n a c c o u n t i n g e d u c a t i o n . In A S H A N . a c c o u n t i n g w a s i n t r o d u c e d n o t b e c a u s e it w a s n e e d e d t o r d e v e l o p m e n t , b u t b e c a u s e it w a s n e e d e d t o f a c i l i t a t e t h e a c c o u n t i n g a n d r e p o r t i n g r e q u i r e m e n t s o f W e s t e r n c o r p o r a t i o n s o p e r a t i n g in t h o s e

countries. An examination of accounting systems of a number of ASHAN countries r e v e a l s t h a t c o l o n i a l i n f l u e n c e is v e r y l o n g s t a n d i n g e v e n a f t e r

several decades of t h e i r i n d e p e n d e n c e . A p p a r e n t l y , t h e y st i l l f o l l o w ' t h e s a m e i n a p p r o p r i a t e s y s t e m s o n their accounting practice and education (Briston.

1978; Hove, 1987; Yapa & Wijewardcna.

particularly Nevvlv Industrialised Countries (NIC's) have successfully adopted accounting systems to suit their local needs and to suit international standards (Tang & Tse. 1986; Tipgos,

1987; W orld Bank. 1993).

T h e p u r p o s e o f t h i s p a p e r is t o c o n t r i b u t e t h i s d e b a t e b \ p r e s e n t i n g a v a i l a b l e evidence from an analysis of the existing system of accounting education and training

i n i t i a t i v e s in f o u r A S H A N c o u n t r i e s - S i n g a p o r e . M a l a y s i a . B r u n e i D a r u s s a l a m a n d Indonesia - and gain insights into why some countries are still 'bllowing the colonial system while others have gradually shifted away. The choice of Singapore. Malaysia.

Brunei, and Indonesia was made because they were countries under two different

c o l o n i a l m a s t e r s i.e. B r i t i s h a n d D u t c h f o r c e n t u r i e s . H v e n t u a i l y , M a l a y s i a . B r u n e i

a n d S i n g a p o r e f o l l o w e d t h e B r i t i s h a p p r o a c h in a c c o u n t i n g e d u c a t i o n a n d p r a c t i c e while Indonesia, until recent past, followed the Dutch system. Where relevant, the

e x p e r i e n c e o f t h e s e c o u n t r i e s w i l l b e c o m p a r e d a n d c o n t r a s t e d in o r d e r t o i d e n t i f y k e v

i n f e r e n c e s in a w i d e r p e r s p e c t i v e . T h e p a p e r is n o t i n t e n d e d t o b e a c o m p r e h e n s i v e study of the subject, its scope and depth being constrained by limited available

e v i d e n c e . I t s m o d e s t o b j e c t i v e is t o l a y t h e g r o u n d w o r k f o r t h e c o n c e p t u a l i s a t i o n o f further studies and identify direction for future research.

Colonial Infliicncc on Corporate Legal Environment

As a regional grouping ASHAN has attracted much interest because of their r e m a r k a b l e e c o n o m i c g r o w t h . T h e A S H A N w a s f o r m e d o n A u g u s t 8. 1 9 6 7 . a s a regional political and economic grouping consisting

Indonesia. Malaysia, the Philippines. Singapore and Thailand. Brunei Darussalam became the sixth member of

A S H A N in 1 9 8 4 a n d V i e t n a m j o i n e d in 1 9 9 5 a n d p r o m i s e s t o b e a n e x a m p l e o f r a p i d

e c o n o m i c a n d s o c i a l c h a n g e in t h e n e a r f u t u r e . S i m i l a r l y M y a n m a r a n d L a o s j o i n e d

A S H A N in 1 9 9 7 . H c o n o m i c t i e s b e t w e e n A S H A N c o u n t r i e s s e e m destined to become stronger with ASHAN's commitment to create an ASHAN f ree Trade Area ( A H T A ) b y 2 0 0 3 . A F T A ' s a i m is t o c r e a t e m i n i m u m b a r r i e r s t o t r a d e a n d i n v e s t m e n t among ASHAN member countries. This will be accomplished by reducing tariff on wide range of products and by

harmonizing regulations relating to trade and investment (Craig & Diga. 1996). In order to ensure a sustainable development of t r a d e a n d i n v e s t m e n t , a p r o n o u n c e d l e g a l s y s t e m is e s s e n t i a l . T h e w a y in w h i c h n a t i o n a l l e g a l p r a c t i c e s d e v e l o p e d in t h e s e c o u n t r i e s is o p e n t o c o n j e c t u r e w i t h a n u m b e r o f f a c t o r s o p e r a t i n g in c o n j u n c t i o n . A c c o r d i n g l y , A S 1 : A N c o u n t r i e s h a v e

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28 Accounting hducaiion and training in Ascan: I lie \\ cslern

adopted a legal and microeconomics approach with regard to financial reporting p r a c t i c e s a n d r e g u l a t i o n s m a i n l y d u e t o t h e i r c o l o n i a l l i n k s . H o w e v e r , t h e a r g u m e n t is that most developing countries including ASUAN have adopted legislation of the

colonial powers without due regard to their local conditions even alter their independence. As mentioned b\ Briston:

In a n u m b e r o f c o u n t r i e s , o f c o u r s e t h e B r i t i s h i n f l u e n c e is v e r y l o n g s t a n d i n g , a n d a l m o s t a l l o f t h e c o l o n i a l t e r r i t o r i e s in w h i c h a n y substantial degree of industrial development took place under British rule will have had imposed upon them a British Companies Act with t h e u s u a l r e p o r t i n g a n d a u d i t i n g r e q u i r e m e n t ( B r i s t o n . 1 9 7 8 . p. 1 0 8 ) .

In t h i s c o n t e x t , t h e c o m p a r a t i v e a n a l y s i s o f n a t i o n a l c o r p o r a t e a n d c o m p a n i e s laws within ASUAN suggests 4 patterns of development: (1) A British approach (adopted by Brunei. Malaysia and Singapore): (2) A Dutch approach (adopted by

Indonesia): (3) US. approach (adopted by the Philippines): (4) mixed -country approach (adopted by Thailand) (Craig & Diga.

1996). Accordingly. Brunei. Malaysia. Singapore all former British colonies, have each adopted a companies Act modeled on the UK Companies Act 1948 and the Australian Uniform Companies Act

1961 (Pillai, 1984: Price Waterhouse. 1991, 1992a, 1992b). However, the Companies

A c t o f S i n g a p o r e h a s u n d e r g o n e c o n s i d e r a b l e c h a n g e s s i n c e f i r s t e n a c t e d in 1 9 6 7 (CCH, 1990). Indonesian Commercial Code 1848, patterned on the early Dutch

C o m m e r c i a l C o d e w ith s o m e m i n o r a m e n d m e n t s . U n d e r t h i s s y s t e m , law' is c o d i f i e d ,

a n d c o m p a n y l e g i s l a t i o n p r e s c r i b e s r u l e s in d e t a i l f o r a c c o u n t i n g a n d f i n a n c i a l reporting.

Unfortunately, many of the amendments that have been made in N e t h e r l a n d s s i n c e 1 8 4 8 w e r e n o t i n c o r p o r a t e d in t h e C o m m e r c i a l C o d e in I n d o n e s i a .

& Y u n u s . 1 9 9 7 ) . It is, t h e r e f o r e ,

o b v i o u s t h a t c o m p a n y l a w s in A S U A N h a v e b e e n a f f e c t e d s t r o n g l y b y e a c h c o u n t r y ' s former colonial

of such legislation to its environment. British group (Brunei, Malaysia, Singapore) was mainly influenced by Britain and non-British group (mainly the Philippines, Thailand and Indonesia) was

links

despite the

appropriateness

i n f l u e n c e d b y U S . J a p a n , t h e N e t h e r l a n d s a n d ( i e r m a n y r e f l e c t i n g its i m p o r t a n t trading links with these major

economic powers during the late 1800s and early

1 9 0 0 s ( M a o l a n o n d & Y a s u d a , 1 9 8 5 : Y a s u d a , 1 9 9 3 ) . W i t h t h i s b a c k d r o p , it is o b v i o u s t h a t a c c o u n t i n g p r a c t i c e w h i c h is a p r o d u c t o f a c c o u n t i n g e d u c a t i o n a n d t r a i n i n g in ASEAN have been structured based on the corporate legal environment created by

the colonial powers during their administration w ithout due regard to local needs and conditions.

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I he International Journal ol'Accounting and Business Society 29

Political, Historical and Economic Background

Among the ASEAN countries. Singapore, Malaysia. Brunei and Indonesia are strongly influenced by their previous colonial linkages. Consequently, their historical, political, and economic backgrounds were gradually modeled on the basis of colonial system, but their individual experiences were quite different. In the case of Singapore, British influence has caused an enormous impact on its political and

e c o n o m i c o u t l o o k . O t h e r t h a n t h e b r i e f J a p a n e s e o c c u p a t i o n in t h e 1 9 4 0 s , S i n g a p o r e was colonised by the British

until 1959. However, after self- government was

a t t a i n e d in 1 9 5 9 . a m a s s i v e i n d u s t r i a l i s a t i o n p r o g r a m m e b e g a n , a n d b y t h e 1 9 8 0 ' t h e manufacturing sector had become the mainstay of the economy. More than 78 per

c e n t o f t h e p o p u l a t i o n w e r e e n g a g e d in c o m m e r c e a n d i n d u s t r y . A n e d u c a t e d a n d well trained work force and a free enterprise economy which imposes no restrictions on ownership, expatriate employment, or the repatriation of investment capital and

profits gave Singapore a competitive edge over many neighboring countries as a location for investment. Therefore, much of the economic growth was generated

through foreign investment attracted by policies of providing good infrastructure, attractive fiscal incentives, and a stable political climate (Foo, 1988).

The modern history of Malaysia began with the establishment of a Muslim s u l t a n a t e i n M a l a c c a in t h e e a r l y 1 5 t h C e n t u r y w h i c h f o r m e d t h e b a s i s o f m o d e r n Malay institutions and customs. British influence was founded by the acquisition of

t h e i s l a n d o f P e n a n g a n d t h e n M a l a c c a in t h e l a t e 1 8 0 0 , s h o r t l y b e f o r e a B r i t i s h t r a d i n g c o l o n y w a s e s t a b l i s h e d in S i n g a p o r e . O n t h e b a s i s o f t h e s e l i n k a g e s t h e

British economic and political colonial rule was apparently formed in Malaysia. Subsequently, the federated Malay States were developed under the British colonial

r u l e a s t h e s o u r c e o f r u b b e r a n d t i n f o r t h e w e s t e r n w o r l d u n t i l i t s i n d e p e n d e n c e in 1958. Based on the natural resources of the country, these two industries were the major focus of economic activity and foreign exchange earning for many years. The successful

investments and increased

g o v e r n m e n t i n f o r m a t i o n r e q u i r e m e n t s h a v e l e d t o d r a m a t i c i n c r e a s e in t h e d e m a n d for various services including accounting from government, public practice, and private industry.

Indonesia was a Protestant Dutch colony for almost three centuries prior to r e c e i v i n g i n d e p e n d e n c e in 1 9 4 5 . B e s i d e t h e D u t c h , I n d o n e s i a w a s a l s o c o l o n i s e d b y the Portuguese, French, and British due to its attraction on spice trade. Flowever, the

Dutch stayed the longest for nearly 350 years. Therefore, the political, economic and social

mainly by Dutch administration. Indonesia has vast mineral resource and oil. However, the changing s t r u c t u r e o f t h e I n d o n e s i a n e c o n o m y is r e f l e c t e d in t h e f a c t t h a t m a n u f a c t u r i n g

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30 Accounting Education and Training in Asean: The Western.

is t h e f o u r t h m o s t p o p u l o u s c o u n t r y in t h e w o r l d w i t h a p o p u l a t i o n o f a p p r o x i m a t e l y 195 million of which 90 percent are Muslims.

B r u n e i D a r u s s a l a m is s i t u a t e d o n t h e n o r t h w e s t c o a s t o f t h e I s l a n d o f B o r n e o . T h e p o p u l a t i o n is a b o u t o n e - q u a r t e r o f a m i l l i o n , w i t h t h e M a l a y r a c e b e i n g t h e majority, followed by the Chinese and indigenous races such as ibans. Dosun and

o t h e r t r i b a l g r o u p s . T h e l a b o u r f o r c e is a b o u t 1 2 5 . 0 0 0 i n c l u d i n g e x p a t r i a t e s . T h e G D P o f B r u n e i w a s a l m o s t U S $ 4 b i l l i o n p e r a n n u m in 1 9 9 2 . g i v i n g a n a v e r a g e p e r c a p i t a

G D P o f i n e x c e s s o f U S $ 1 5 , 0 0 0 . B r u n e i ' s e c o n o m y is h e a v i l y d e p e n d e n t o n c r u d e oil, petroleum products and Liquefied Natural Gas (LNG). which directly accounts

f o r a p p r o x i m a t e l y 4 0 p e r c e n t o f G D P . T h e m a i n p r o b l e m s f a c i n g t h e e c o n o m y a r e its dependence on imports and a shortage of skill labor. Historically, Brunei had been a p r o t e c t o r a t e o f G r e a t B r i t a i n . E v e n a f t e r t h e f u l l s o v e r e i g n t y in 1 9 8 4 . t h e B r i t i s h

i n f l u e n c e o n a d m i n i s t r a t i o n , e d u c a t i o n in B r u n e i is s t i l l r e f l e c t e d t h r o u g h t h e

i n v o l v e m e n t o f B r i t i s h e x p e r t s in o r g a n i s i n g a n d d i r e c t i n g t h e b u s i n e s s , t e a c h i n g a n d

a s s i s t a n c e in t h e d e v e l o p m e n t o f a c a d e m i c i n s t i t u t i o n s a n d g e n e r a l a d m i n i s t r a t i v e environments.

Accounting Education and Training at Tertiary and Professional Level

In most developing countries, accounting practice tend to replicate those of t h e i n d u s t r i a l l y a d v a n c e d c o u n t r i e s . T h e a p p a r e n t r e a s o n f o r s u c h a t e n d e n c y is t h e i r former colonial links. Accordingly, the British and Dutch were imposing their

a c c o u n t i n g p r a c t i c e s in B r u n e i , I n d o n e s i a . M a l a y s i a a n d S i n g a p o r e m a i n l y d u e t o their direct trade, investment and administrative linkages. Obviously, the colonial

1 9 5 9 . C o n s e q u e n t l y , it s g e n e r a l e d u c a t i o n f r o m p r i m a r y t o u n i v e r s i t y l e v e l w a s inherited from the British education system, and accounting education was no exception. The British system of accounting education was imposed on Singapore

d u r i n g t h e c o l o n i a l p e r i o d in a n u m b e r o f w a y s : ( 1 ) t h e e x p o r t o f B r i t i s h a c c o u n t i n g personnel to Singapore; (2) the export of British accounting qualifications; (3) the establishment of British professional accounting bodies' examination centers; (4) the

i n v o l v e m e n t o f B r i t i s h e x p e r t s in t h e p l a n n i n g , d i r e c t i n g , o r g a n i s i n g , t e a c h i n g a n d p r o v i d i n g a s s i s t a n c e in o n e f o r m o r a n o t h e r in t h e d e v e l o p m e n t o f a c a d e m i c

i n s t i t u t i o n s in S i n g a p o r e ; a n d . ( 5 ) t h e g e n e r a l B r i t i s h i n f l u e n c e u p o n t h e b u s i n e s s ,

e d u c a t i o n a n d a d m i n i s t r a t i v e e n v i r o n m e n t s in t h e e a r l y d a y s o f S i n g a p o r e ( L o o . 1988).

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I lie International Journal of Accounting and Business Society 3 I

Prior to 1956. Singapore did not have any programme of studies leading to a l o c a l q u a l i f i c a t i o n in a c c o u n t i n g . T h e o n l y a c c o u n t i n g e d u c a t i o n a v a i l a b l e w a s through the examinations conducted by professional accounting bodies in the UK and Australia. As such, a foreign professional accounting qualification was the only

a v e n u e t h r o u g h w h i c h a p e r s o n c o u l d e x p e c t a n a c c o u n t i n g j o b . p a r t i c u l a r l y a j o b in the public sector. The first local accounting programme leading to a Bachelor of Commerce with

launched by the Nanyang U n i v e r s i t y in 1 9 5 6 . I n t h e f o l l o w i n g y e a r , t h e D e p a r t m e n t o f C o m m e r c e a t t h e Singapore Polytechnic was established to offer, among other courses, a full-time

specialisation

in

accounting was

course leading to the College Diploma in accounting (Fong & Foo, 1992). In 1958. the Department of Commerce at the Singapore Polytechnic was replaced by the

Department of Accountancy with the objective of offering both full-time r.nd part­ t i m e c o u r s e s l e a d i n g t o a P r o f e s s i o n a l D i p l o m a in A c c o u n t i n g ( T a n e t a l . 1 9 9 4 ) . S o o n after gaining political

i n d e p e n d e n c e , t h e a u t h o r i t i e s in S i n g a p o r e r e a l i s e d t h e importance

higher educational institutions without depending on foreign accounting bodies and what was perceived to be out-dated education systems. Consequently, the professional accounting

of producing

d i p l o m a a w a r d e d by t h e S i n g a p o r e P o l y t e c h n i c w a s r e c o g n i s e d in 1963 as an adequate qualification for admission to provisional membership of the Singapore Society of Accountants (SSA). The SSA was the local professional accounting body

established by the government

of registering professional accountants and regulating the practice of the profession of accountancy

in Singapore. During the 1965-66 academic year, the Department of Accountancy at the Singapore Polytechnic was renamed the School of Accountancy and the accountancy programme was upgraded from a diploma to a university degree to signify ing the transformation of the polytechnic to a university college. As a result of negotiations

b e t w e e n t h e c o l l e g e a n d t h e U n i v e r s i t y o f S i n g a p o r e , t h e l a t t e r a g r e e d t o a w a r d its accounting

Polytechnic. In 1969. the amalgamation of the School of Accountancy with the Department of Business

degree to

h i s t o r i c a l d e v e l o p m e n t o f a n i n d e p e n d e n t a c c o u n t i n g e d u c a t i o n sy s t e m in S i n g a p o r e (Sunday l imes. 1968). At the time of the merger, the School of Accountancy was r e l o c a t e d t o t h e U n i v e r s i t y o f S i n g a p o r e c a m p u s . A s a f u r t h e r d e v e l o p m e n t in 1 9 7 1 . the

offered by Nanyang U n i v e r s i t y s i n c e 1 9 5 6 a l s o r e c e i v e d its p r o f e s s i o n a l r e c o g n i t i o n , s u b j e c t t o p r a c t i c a l t r a i n i n g , f r o m t h e S S A . I n 1 9 7 8 . j o i n t c o u r s e s in a c c o u n t i n g w e r e i n t r o d u c e d by t h e Nanyang

Bachelor of Commerce

(Accountancy)

programme

University and

the

University

of Singapore.

The two schools of

a c c o u n t a n c y m e r g e d in 1 9 8 0 t o f o r m t h e S c h o o l o f A c c o u n t a n c y a t t h e N a t i o n a l University of Singapore.

After the recognition of the Singaporean university system through the formation of the National University of Singapore and the Nanyang Technological Institute, the country's accounting education system achieved its highest growth rate. The School ol'Accountancy of the National University of Singapore was phy sically

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32 Accounting Education and Training in Ascan: The Western.

r e l o c a t e d a t t h e N a n y a n g T e c h n o l o g i c a l I n s t i t u t e in 1987 and the School of

A c c o u n t a n c y w a s r e n a m e d t h e S c h o o l o f A c c o u n t a n c y a n d B u s i n e s s in 1 9 9 0 . In

1 9 9 1 , t h e N a n y a n g T e c h n o l o g i c a l I n s t i t u t e b e c a m e a f u l l - f l e d g e d u n i v e r s i t y a n d is now'

(NTU). The School of Accountancy and Business of this university has gained a reputation today as the l e a d i n g c e n t r e f o r u n d e r g r a d u a t e a n d p o s t g r a d u a t e a c c o u n t i n g e d u c a t i o n in S o u t h e a s t

named the Nanyang

Technological

University

Asia. The bachelor of accounting degree awarded by the Nanyang Technological U n i v e r s i t y is b a s e d o n a 3 - y e a r f u l l - t i m e p r o g r a m m e o f s t u d y . I n a d d i t i o n t o its Bachelor

a professional p o s t g r a d u a t e p r o g r a m m e s in A c c o u n t i n g . T h e s e a c c o u n t i n g d e g r e e s a r e r e c o g n i s e d by the Institute of Certified Public Accountants of Singapore (ICPAS) for admission

of Accountancy

A c c o u n t a n c y p r o g r a m m e o f N T U , a t its v a r i o u s s t a g e s o f d e v e l o p m e n t , h a s p r o d u c e d nearly 10,000 accounting graduates. By the end of 1992, 7442 of these graduates had become professional accountants by obtaining the ICPAS membership.

Since its inception, the Singapore professional accounting body, (initially as t h e S i n g a p o r e S o c i e t y o f A c c o u n t a n t s ( S S A ) in 1 9 6 3 a n d l a t e r a s t h e I n s t i t u t e o f

C e r t i f i e d P u b l i c A c c o u n t a n t s o f S i n g a p o r e ( I C P A S ) in 1 9 8 7 ) , h a s m a i n t a i n e d a c l o s e r e l a t i o n s h i p w i t h t h e u n i v e r s i t y ' s S c h o o l o f A c c o u n t a n c y . T h i s l i a i s o n is e v i d e n c e d b y the fact that the Institute was consulted at each stage of the transition of the School from the Singapore Polytechnic to the present Nanyang Technological University. A r e p r e s e n t a t i v e o f t h e S c h o o l o f A c c o u n t a n c y a n d B u s i n e s s is a p p o i n t e d b y t h e Minister of Finance as a statutory member of the Council of the ICPAS. Through various committees, the School of Accountancy and Business also maintains close rapport with the professional accounting body, business community and other professional

relevance of its degree p r o g r a m m e s ( T a n , e t a l , 1 9 9 4 ) . It a p p e a r s t h a t d u r i n g t h e p o s t - i n d e p e n d e n c e p e r i o d a s

a booming economy, Singapore has been able to consider her national goals, political

c l i m a t e , e c o n o m i c e n v i r o n m e n t s a n d e f f i c i e n c y in u t i l i s i n g e d u c a t i o n a l r e s o u r c e s

i n c l u d i n g u n i v e r s i t i e s a n d t e c h n i c a l c o l l e g e s in o r d e r t o d e v e l o p a s y s t e m o f accounting education and training more suitable to their local conditions.

Indonesia

A c c o u n t a n c y d e v e l o p m e n t in I n d o n e s i a c a n b e t r a c e d b a c k t o 1 6 4 2 , t h e y e a r which the Dutch Governor General of the Netherlands East Indies issued regulations concerning the administration of accounting for garrisons. Historically, the Dutch system of accounting education was imposed on Indonesia during the colonial period

i n a n u m b e r o f w a y s . ( 1 ) t h e i n v o l v e m e n t o f D u t c h e x p e r t s in p l a n n i n g , d i r e c t i n g , o r g a n i s i n g t e a c h i n g a n d p r o v i d i n g a s s i s t a n c e in t h e d e v e l o p m e n t o f a c a d e m i c institutions in Indonesia; (2) the export of Dutch accounting qualifications; and (3) compulsory membership of the Netherlands Institute of Accountants (Foo, 1988; Briston et al, 1990; Abdoelkadir & Yunus, 1994).

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The International Journal of Accounting and Business Society 33

In 1907 the first government accountant was sent to Indonesia from the N e t h e r l a n d s t o o p e n t h e S t a t e A u d i t A g e n c y . B a s e d o n t h e g r o w i n g n e e d s in t h e country, Dutch administration realised that the number of bookkeepers produced by the schools was inadequate. The main reason for such a shortage was that bookkeeping was first taught at high schools and special schools such as the

H a n d e l s c h o o l o r t h e M i d d e l b a r e H a n d e l s c h o o l ( s c h o o l s s p e c i a l i s i n g in t r a d e ) .

E n r o l m e n t in t h e s e s c h o o l s w a s u s u a l l y l i m i t e d t o I n d o n e s i a n s w i t h s p e c i a l s t a t u s , such as the children of the head of a district or the children of a wealthy businessman ( A b d o e l k a d i r & Y u n u s . 1 9 9 4 ) . T h e r e f o r e , in 1 9 2 5 . t h e T r a d e T e a c h e r s A s s o c i a t i o n o r Union

Vereniging Voor Handle Onderwijs) which organised two courses on bookkeeping classified as Bond A and Bond B equivalent to basic and intermediate accounting courses, respectively to

of Trade Commerce

remedy the shortage of accounting personnel. Accordingly, holders of Bond A certificates were mostly employed by small trading companies while Bond B holders were employed by large companies (Sembiring. 1984). The Bond conducted a u n i f o r m e x a m i n a t i o n a n d i s s u e d its o w n c e r t i f i c a t e . H o w e v e r . J a p a n e s e o c c u p a t i o n in Indonesia from 1942 to 1945 created a large number of accounting positions which w e r e h e l d b y D u t c h in t h e M i n i s t r y o f F i n a n c e a n d t h o s e p o s i t i o n s h a d t o b e f i l l e d instantly. The Japanese eventually offered four different accounting courses to train

I n d o n e s i a n s t o t a k e u p t h e s e p o s i t i o n s . W i t h t h e s u r r e n d e r o f J a p a n e s e in 1 9 4 5 . t h e

D u t c h r e t u r n e d t o I n d o n e s i a a n d c o n t i n u e d t h e e d u c a t i o n s y s t e m in a c c o u n t i n g a s before with the Bond A and Bond B courses (Briston et al. 1990). In addition to Bond

A and B. another Moderne Bedrijft Administrative (MBA) certificate was introduced

b y D u t c h in 1 9 4 8 a n d c o n d u c t e d b y a p r i v a t e i n s t i t u t i o n m a i n l y f o r e x e c u t i v e p o s i t i o n s in I n d o n e s i a . T h e s e c o u r s e s m a i n l y c o m b i n e d t h e c u r r i c u l a o f c o s t accounting and advanced accounting. Later the MBA courses were entitled as

Administrasi Perusahaan Moderen (AMP) and directed by the Ministry of Education (Enthoven, 1974; Hadibroto. 1984).

In 1952. the Economics Faculty of the University of Indonesia established an

A c c o u n t i n g D e p a r t m e n t a n d it w a s t h e f i r s t i n s t i t u t i o n in I n d o n e s i a t o o f f e r a f o r m a l

a c c o u n t i n g p r o g r a m m e a t t h e h i g h e r e d u c a t i o n a l l e v e l . E v e n t u a l l y , in 1 9 5 7 t h e f i r s t four Indonesian accountants were graduated. State universities outside Jakarta later offered accounting programmes. Moreover, a few

private universities such as Universitas

Universitas Trisakti (1969). U n i v e r s i t a s T a r u m a n e g a r a ( 1 9 7 2 ) a n d U n i v e r s i t a s A t m a j a y a ( 1 9 7 3 ) in J a k a r t a a l s o o f f e r e d a c c o u n t i n g p r o g r a m m e s . S o m e a c c o u n t i n g p r o g r a m m e s in I n d o n e s i a a r c

Sarjana programme, graduate was awarded a 'doctorandus' degree. Others followed t h e ' g u i d e d s t u d y sy s t e m ' w h i c h w a s m o d e l e d a l t e r p l a n u s e d in t h e U S . A c c o r d i n g t o t h i s s t u d y s y s t e m , a s t u d e n t c o u l d e a r n b o t h b a c c a l a u r e a t e a n d m a s t e r ' s d e g r e e in

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34 Accounting Education and Training in Ascan: I he Western

a c c o u n t i n g in f i v e y e a r s . T h i s d u a l i s m in m e t h o d s o f a c c o u n t i n g e d u c a t i o n p e r s i s t e d u n t i l r e c e n t p a s t in I n d o n e s i a . ( B r i s t o n e t al . 1 9 9 0 ; A b d o e l k a d i r & Y u n u s . 1 9 9 4 ) .

A new law called ' The Accountancy Law No.34 of 1954 ' restricted the use of the designation 'Akuntan' (Accountant) to individuals holding a 'doctorandus' degree from a recognised tertiary academic institution. Before the enactment of the

A c c o u n t a n c y L a w , it w a s n o t p o s s i b l e t o r I n d o n e s i a n s t o q u a l i f y a s p r o f e s s i o n a l

a c c o u n t a n t s u n l e s s t h e y s t u d i e d in t h e N e t h e r l a n d s a n d b e c o m e m e m b e r s o f t h e Netherlands Institute of Accountants (Loo. 1988: Diga & Yunus. 1997). This law enabled any Indonesian to become a registered accountant by obtaining a master's

d e g r e e ( S a r j a n a ) in a c c o u n t i n g e i t h e r f r o m a s t a t e u n i v e r s i t y , f r o m a n a c c r e d i t e d private university or from the State School of Government Accounting (STAN). The M i n i s t r y o f F i n a n c e in I n d o n e s i a a l s o p r o v i d e s a c c o u n t i n g e d u c a t i o n t o t r a i n

a c c o u n t a n t s t o s e r v e t h e g o v e r n m e n t . I n 1 9 5 7 it e s t a b l i s h e d t h e S e k o l a h T i n g g i I l m u Keuangan Negara (STIKN). which later became the Institut Ilmu Keuangan (UK),

a n d n o w is c a l l e d S e k o l a h T i n g g i A k u n t a n s i N e g a r a ( S T A N ) . T h e v a s t m a j o r i t y o f r e g i s t e r e d a c c o u n t a n t s in I n d o n e s i a h a v e q u a l i f i e d f r o m t h e S T A N a n d s t a t e universities with accredited accountancy programmes. Graduates form unaccredited

institutions (mostly private institutions) must pass an examination organised by the 'Committee of Experts' appointed by the Ministry of Education and Culture. Surprisingly, only a few graduates passed the examinations and reached 'Sarjana' level set by the Committee of Experts. For example, out of 2,536 graduates at the

b a c h e l o r l e v e l p r o d u c e d b y p r i v a t e u n i v e r s i t i e s in 1 9 7 8 . o n l y 12 o f t h e m h a v e reached the 'Sarjana' level. Those who qualified through these processes are required t o r e g i s t e r w i t h t h e D i r e c t o r a t e o f S t a t e A c c o u n t a n c y in t h e M i n i s t r y o f F i n a n c e . However, before being allowed to establish a public accounting firm, a qualified person must hav e worked for the gov ernment for a period of at least three years. This was required by Act No. 8 of 196land the objective of which was to ensure that the

g o v e r n m e n t w a s a b l e t o m e e t s o m e o f its s t a f f i n g n e e d s in t h e f i e l d o f a c c o u n t a n c y (Briston et al. 1990).

T h e n a t i o n a l i z a t i o n o f D u t c h o w n e d c o m p a n i e s in 1 9 5 7 a n d t h e r e s u l t a n t departure of Dutch

of adequately qualified and experienced manpower to higher echelons of managerial, accounting and academic positions. This indicates that during the Dutch colonial days Indonesians had been less motivated for such training and experience and eventually only a few were

nationals created a vacuum

t r a i n e d a f t e r i n d e p e n d e n c e . T h e m a i n i m p a c t o n a c c o u n t i n g e d u c a t i o n in I n d o n e s i a due to the departure of the Dutch was the gradual adoption of US accounting systems.

With the assistance of Ford Foundation, the university of California (Berkeley, USA) provided teaching staff on a five-year contract to the university of Indonesia and at

t h e s a m e t i m e p r o v i d e d o p p o r t u n i t i e s f o r I n d o n e s i a n s t o s t u d y in t h e U S . T h e F o r d Foundation also assisted Gadjah Mada University, which was affiliated with the University of Wisconsin. From that time, the American influence began to gain

m o m e n t u m in I n d o n e s i a , h o w e v e r , D u t c h i n f l u e n c e d i d n o t c o m p l e t e l y d i s a p p e a r .

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T h i s s t a t e o f d u a l i s m h a s c o n t i n u e d b e c a u s e g r a d u a t e s o f b o t h s y s t e m s w e r e in demand by the industry and commerce. Moreover, the accountants in senior positions in v a r i o u s o r g a n i s a t i o n s p r e f e r r e d t o h i r e j u n i o r a c c o u n t a n t s w i t h D u t c h a c c o u n t i n g backgrounds. Under the Dutch system of accounting training, the emphasis was more on general and business economics, often using out of date translated Dutch text books. The universities of Airlangga and Pajajaran followed the Dutch system until

1977 when the Consortium of [Economics Science (CES) was formed and introduced

a c o m m o n e d u c a t i o n a l sy s t e m f o r al l u n i v e r s i t i e s , b a s e d l a r g e l y u p o n t h e A m e r i c a n approach (Briston et al. 1990). As a result of these developments, problems of dualism emerged mainly due to poor coordination within the education and training s y s t e m . In l a t e 1 9 8 4 . t o c o o r d i n a t e t h e a c c o u n t i n g e d u c a t i o n s y s t e m a n d t o e l i m i n a t e dualism, the World bank recommended that the Indonesian government establish a

c o o r d i n a t i n g a g e n c y . In 1 9 8 5 , t h e M i n i s t r y o f F i n a n c e a n d t h e M i n i s t r y o f E d u c a t i o n

a n d C u l t u r e in a j o i n t d e c r e e e s t a b l i s h e d t h e C o o r d i n a t i n g A g e n c y f o r A c c o u n t i n g Development (CAAD) with a full-time executive Secretary. The objectives of CAAD w e r e t o i m p r o v e a c c o u n t i n g s t a n d a r d s a n d p r a c t i c e s in t h e g o v e r n m e n t a n d p r i v a t e s e c t o r , t o o r g a n i s e t h e a p p l i c a t i o n o f a c c o u n t i n g s t a n d a r d s a n d p r a c t i c e s in s t a g e s a n d to develop uniform and unified accounting educational system (Abdelkadir & Yunus,

1994). Under these arrangements, extensive feasibility studies were conducted and a principal project was introduced, costing about a $ 165 million covering a five year p e r i o d . H o w e v e r , e v e n in t h i s p r o j e c t , t h e r e s e e m s t o b e s e r i o u s p r o b l e m s s u c h a s l a c k o f p r o f e s s i o n a l a n d t e c h n i c a l s t a f f w h o a r e a d e q u a t e l y t r a i n e d in m o d e r n m e t h o d s o f accountancy, the deficiencies

in g o v e r n m e n t a c c o u n t i n g , s h o r t c o m i n g s o f t h e government budget process, scarcity of competent government accountants and

a u d i t o r s , p r i v a t e s e c t o r s h o r t a g e o f a c c o u n t a n t s w ith u p t o d a t e s k i l l s . T o s o m e e x t e n t t h is s i t u a t i o n c a n b e a t t r i b u t e d t o a g e n e r a l a b s e n c e in I n d o n e s i a n l a w o f r e g u l a t i o n s relating to accounting. The Indonesian Companies' Act and the Commercial Code, as mentioned earlier, are anachronisms dating back to colonial times and are silent on accounting matters. Thus, there are no statutory reporting requirements and audit requirements except for listed companies. Secondly, Indonesian Accounting Institute (IAI) (Indonesian Accounting Institute or Ikatan Akuntan Indonesia (IAI) was

f o u n d e d in 1 9 5 7 by t h e f i r s t b a t c h o f g r a d u a t e s o f t h e U n i v e r s i t y o f I n d o n e s i a accounting course. Its objectives, interalia.are to promote the status of the accounting profession, support the national development of Indonesia, and upgrade the skills and

c o m p e t e n c e o f t h e I A I ' s ) . w h i c h is t h e o n l y r e c o g n i s e d p r o f e s s i o n a l a c c o u n t a n c y

b o d y , is r e l a t i v e l y y o u n g a n d n o t d e v e l o p e d w e l l . T h e r e f o r e , I n d o n e s i a h a s t o g o a long way to seek improvement to these problems (Abdelkadir & Yunus, 1994). There

a r e c u r r e n t l y o v e r 8 5 u n i v e r s i t i e s , i n s t i t u t e s a n d a c a d e m i e s in I n d o n e s i a a n d t h e y o f f e r post-secondary accounting programmes. Despite these universities and institutions, Indonesia has not been able to produce adequately qualified accountants to meet the

d e m a n d f r o m c o m m e r c e , i n d u s t r y a n d t h e g o v e r n m e n t s e c t o r s . It a p p e a r s t h a t Indonesia suffers from an acute shortage of well qualified accountants during the post- independence period as a result of inconsistent and uncoordinated adoption of t h e A n g l o - S a x o n sy s t e m s in its e c o n o m y . It s u g g e s t s t h a t a l t h o u g h . C A A D is w o r k i n g

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36 Accounting Education and Training in Asean: The Western.

t o w a r d s a r e l e v a n t a n d f e a s i b l e s o l u t i o n in t h e l o n g r u n , it a p p a r e n t l y , r e q u i r e s t h e p r o p e r c o o r d i n a t i o n w i t h m a n y s e c t o r s in t h e e c o n o m y . T h e r e f o r e , t h e r e s e e m s t o b e serious doubts about such a coordination in accounting education and respond to

changing circumstances

numbers of locally qualified accountants.

by

producing adequate

Malaysia

A c c o u n t i n g e d u c a t i o n a n d p r a c t i c e in M a l a y s i a h a v e b e e n d e v e l o p e d a s a r e s u l t o f B r i t i s h i n f l u e n c e . A s S h e r i d a n ( 1 9 6 1 ) p o i n t s o u t t h a t t h r o u g h o u t it s h i s t o r y ,

c o m p a n y l a w in M a l a y s i a h a s a l w a y s b e e n g e a r e d t o its E n g l i s h c o u n t e r p a r t e v e n i f the imitatory machinery has been somewhat slow

in f u n c t i o n i n g . Malaysia's

a c c o u n t i n g e d u c a t i o n i n its r e c o g n i s a b l e f o r m e x i s t s o n l y a f t e r i n d e p e n d e n c e i n 1 9 5 8 . Prior to this Malaysians were sent to the UK for British professional accounting qualifications such as Chartered Accountancy (CA) and Association of Certified and Corporate Accountants (ACCA). However, after the independence,

twenty local accountants incorporated the Malaysian Association of Certified Public Accountants (MACPA). In 1961 the council of the MACPA began setting local examinations and much of the training and education for these examinations were provided through in­ house courses and articleship. Formal courses to assist students who were preparing

f o r M A C P A e x a m i n a t i o n s w e r e i n t r o d u c e d in s e v e n t i e s . P r e s e n t l y , M A C P A h a s

d e s i g n a t e d s o m e i n s t i t u t i o n s t o r u n a c c o u n t a n c y c o u r s e s o n its b e h a l f . T h e y a r c : Tunku Abdul Rahman College and the Damansara Utama College which are running