The Securities and Exchange Commission of Pakistan (SEC) has imposed penalties on two practicing chartered accountants, namely M/s Arman & Co and M/s Sajjad Safri & Co, under section 260 of the Companies Ordinance, 1984 and Rule 35 of the Companies (General Provisions and Forms) Rules, 1985 for negligence in the performance of their duties as auditors of listed companies.
The cases of the two companies have also been referred to the Institute of Chartered Accountants of Pakistan (ICAP) for taking suitable disciplinary action against them under the Chartered Accountants Ordinance, 1961 especially in view of the fact that SEC had fined both of them for similar violations in the past.
M/s Arman & Co, Chartered Accountant was appointed as auditor of a listed company for the financial year ended June 30, 2002.
The Company did not fulfil the disclosure requirements as laid down in the Companies Ordinance, 1984 and the international Accounting Standards (IAS) while preparing and circulating its accounts.
The auditors of the company failed to draw attention of the members towards such non-compliances and contraventions.
A fine of Rs 2,000/- has been imposed on Asrar ul Majeed Khan for negligence in performance of his duties.
Through another order, the SEC imposed a fine of Rs 4,000 on M/s Sajjad Safri & Co, Chartered Accountant under Section 260 of the Companies Ordinance, 1984 and Rule 35 of the Companies (General Provisions and Forms) Rules, 1985.
The audit report signed by Sajjad Saifuddin Safri was not on the prescribed form 25-A and also failed to draw attention of the members towards the deficiencies in disclosures required by the Ordinance and IAS in his Audit Report to the members.
Safri was also penalised earlier on similar professional misconduct in relation to audit of another listed company.
The ICAP has also found Sajjad Saiffudin Safri guilty of negligence and misconduct in another case.