KARACHI: The Institute of Chartered Accountants of Pakistan (ICAP) has said that it is working on setting accounting standards for Non-Governmental Organisations (NGOs), Small and Medium Enterprises (SMEs) and Non-Political Organisations (NPOs).
Mujahid Eshai, former president of the ICAP, while addressing a press conference along with sitting president Zafar Sobani, said the SMEs are still working under unorganised sector.
Presently these SMEs are doing business on cash basis, which is causing troubles for them because banks are reluctant to finance them.
He said after the promulgation of these accounting standards, banks would start lending to those SMEs, which would follow these regulations.
He said that there is a strong need for fixing accounting standards for recently introduced Micro Finance Institutions.
He said State Bank of Pakistan (SBP) failed to issue policy guidelines for NGOs and NPOs.
Sobani complained that “although Government accounting procedures and practices improved considerably during last few years the pace of implementation of accounting reforms are very slow.”
He said that presently no government institution is overseeing the implementing status of designated accounting standards.
Replying to a question regarding performance of member Chartered Accountants Companies of institute, he said last year institute initiated disciplinary action against its 10 members and in this regard set rules and regulations are being followed.
He said our work on Islamic banking laws and regulations is progressing well and we hope to contribute in this direction.
He said effective July this year the institute has also introduced Financial Statement Review (FSR) which, entails evaluation of audited financial statements of the listed companies.
He was of the view that this is step forward in ensuring that financial statements conform to the international accounting standards, company law and other statutory requirements.
Highlighting the work of Quality Control Review (QCR) program of the institute he said that primary objective of the programme is to establish an appropriate quality assurance framework in respect of audits of financial statements conducted by members and member firms.
The QCR entails that a chartered accountant firm after the review receives a rating designated as either in accordance or Not in accordance with requirements of international standards on auditing.
All firms who achieve satisfactory rating are posted on institute web site thus making them eligible for carrying out audits of companies listed on stock exchanges of country.
Firms that fail to attain minimum standards for satisfactory rating are helped and guided by institute to reach the required level.
He urged the policy makers of SECP that it is important that new Chartered Accountant Ordinance takes effect as soon as possible because of implementation of proposed amendments in the proposed ordinance would help the institute grow.