Maza & Co Chartered Accountants

MAZA& CO CHARTERED ACCOUNTANTS

Mohd Amir and Zainal Ali, partners of Maza& Co, a firm of chartered accountants, seemed to have come to a cross road in their partnership that was formed in 2001. They seemed to be arguing on the smallest matters - last month was about employees' bonus, a fortnight ago about a client's request - and today they could not agree whether to accept a business offer from a friendly audit firm. Mohd Amir sat in his office as memories of the negative episode he had with his ex-partner in 2000 came flooding back to haunt him. "What should I do now?" He pondered to himself. "I have to think about the future - my future as well as the firm's. Where do all of us go from here?" Mohd Amir thought aloud.

BACKGROUND OF MAZA& CO, THE FIRM

Maza& Co Chartered Accountants was formed on the 11th of January 2001 as a partnership firm engaged in providing accounting and related services. Thereare two partners running the firm.The first partner, Mohd Amir (MA), founded the first partnershipin 1999 under the name of CA Business Solutions with a friend who later retired from the firm in 2000. MA believed that for the firm to survive and attain success, the firm needed sincerity and co-operative attitude; which MAfound absent from his former partner.Zainal Ali (ZA), his existing partner, joined the partnershipin 2001believing that his mischievous personality could complement the 'good boy' personality of Mohd Amir'sin creating a balanced partnership.Both partners were previously professionally trained in a same prominent public accounting firm.

'Be different from other service management firms' was the motto employed by Maza& Co when the firm first started its operations in 2001. Realizing the competition from hundreds of accounting firms operating within the Klang Valley area, Maza& Co believed that its survival depended on the firm's ability to differentiate itself in the market. The firm strived to give value added services to its clients. Emphasizing on clients' trust and satisfaction, Maza& Co delivered its services to clients in a very personal way. Not only wereits staffrequired to review their work thoroughly, they were also asked to assist in achieving clients' targets. "If they were applying for a loan, we must assist them until they get the loan!" exclaimedMA in one of the staff meetings.

Maza&Co's clientswere mainly bumiputra owned businesses ranging from soleproprietors to multimillion ringgit companies operating within the areas of Shah Alam, Petaling Jaya, Damansara and Kuala Lumpur.Maza& Co also served 3 international companies, one each from Japan, Korea and India. Their clients list comprised law firms; retailers; private clinics; manufacturers; IT, oil and gas, and services companies. These clients were loyal clients who had been with Maza& Co since the firm's inception. 'We grow with you' was Maza&Co's tag line. The firm aimedto serve small companies that lacked proper accounting system and grew astheir clients' businesses grew.

The partnership did not have any written agreement to formally stipulate the relationship and arrangements between thepartners. However, based on their informally agreed upon arrangements, the partners were paid equal monthly salaries and bonuses and had an equal share of equity in the partnership.

BACKGROUND OF PARTNERS

MA

Mohd Amirreceived his public administration diploma from a private college. He later obtained his accounting degree from a Malaysian local university in 1994. In the firstfour years after graduation, he was trained as an auditor in Azman, Wong,Salleh& Co, a prominent public accounting firm in Kuala Lumpur. He later moved to the commercial sector for a short stint in a subsidiary of UDA HoldingsBerhad. Not soon after, he started his own practice. His entrepreneurial spirit was initially challenged by his family members, but they later gave him their full support.

ZA

ZainalAli graduated with an accounting degree from the same university as Mohd Amir and had worked at Azman, Wong, Salleh& Co as well. He later joined DRB HicomProperties Bhd, a subsidiary of DRB Hicom Bhd., where he acted asthe financial controller ofTasekKenyir Golf Resort Project. He then joined ASIE Group of Companies. According to him, his audit experience made him well versed with accounting standards. His involvement in two mega projects, namely the railway trackKuantan-Kerteh Project and Double Track Rawang-Ipoh, and his participation in the relocation ofPekelilingflats in Kuala Lumpur and theindependent power plant (IPP)of Kuala Sungai BaruPerlis, provided him the exposure on financial and project managementaspects of business. He later joined Mohd Amir to form Maza& Co. in 2001, with the initial intention of helping out Mohd Amirafter the latter's partner retired. He has remained faithful to the partnership for the past seven years. According to ZA, the growing number of clients kept him in the firm.

INDUSTRY BACKGROUND

As at 30th June 2009, there were 2,038 chartered accountant firms which were registered with the Malaysian Institute of Accountants (MIA Report 2009). The firms were to be registered with the Malaysian Institute of Accountants (MIA) since the accounting practice in Malaysia isgoverned by the MIA. Accordingly, in order to set up an accounting firm, a sole proprietor or partner shall be a Chartered Accountant member of MIA with a valid practicing certificate. Generally, the accounting firms in Malaysia could be subdivided into three categories, namely the Big 4, second tier firms and small practice.The Big 4 comprises of internationallyrenowned public accounting firms: namely Price Waterhouse Coopers (PWC), Ernst & Young, KPMG Peat Marwick and DelloitteTouche. Together, the Big 4 servedalmost 98% of public listed companies in Malaysia and 57% of the larger private companies. Meanwhile, the second tier firmswere defined as international and local firms consisting of more than three licensed partners in each firm. The majority of the chartered accountant firms in Malaysia, however, operated with less than three partners and they were the small practice firms. These small practice firms competed to serve mostly the small and medium sized private companies in Malaysia.

Even though the accounting firms differ in size, almost all of them offer similar range of services to clients, which include auditing, taxation, management