ICAP issues Annual Report for FY 2004

KARACHI: The Institute of Chartered Accountants of Pakistan (ICAP) has taken legal actions against 16 chartered accountants allegedly involved in unethical practices in the last one year, one high official of the institute said on Friday.

“During the last one year, the Institute took legal actions against 16 chartered accountants allegedly involved in unethical practices,” the official of the chartered accountants’ watchdog said as he reviewed the performance of the institute in the best interest of corporate governance.

The official said the ICAP had taken a bold step and would dig deep into the accounts of the listed companies for the benefit of the investors and at the same time to expose misstatements, if any, from January 1, 2005.

“The ICAP will be carrying out Financial Statements Reviews (FSRs) of listed companies from January 01, 2005,” he said.

According to the annual report of ICAP for FY04, the ICAP has said the “FSRs of listed companies would be carried out with the objective of ensuring appropriateness of financial statement’s presentation and disclosure in accordance with the applicable laws, regulations and approved accounting standards.”

The ICAP said a draft framework for FSR review, developed by the Quality Control Review Committee of the institute, was earlier exposed to members and after obtaining their feedback, a final draft of this programme is in the process of being approved by the council of the Institute.

The programme is expected to be launched from January 01, 2005 for the financial statements for the periods ending on or after June 30, 2004.

The newly elected president of ICAP, Zafar Iqbal Sobani, in his annual review said: “Consequent to the aftermath of global events relating to the auditing profession, the International Federation of Accountants has taken some major steps for restoring the confidence and credibility of the accounting profession.”

He said in this context an important step is the activation of a compliance programme with member organisation aimed at educating and assisting member bodies and focusing on small and medium sized practices, mainly in developing nations, to ensure appropriateness of IFAC’s governance infrastructure in current environment.

He said we are committed to be part of IFAC’s programme and would, in due course, strengthen the areas to be in line with international best practices.

According to report, the failure ratios in different examinations conducted by the ICAP are alarmingly very high and during the last year, 14,443 examinees appeared in various modules of foundation and intermediate examinations as compared to 10,336 examinees in the previous year.

According to reports, out of those who appeared in the exams, only 3,182 candidates passed as compared to 2,291 in the previous year.

Similarly, 4,461 examinees sat for the two modules of final examinations as compared to 4,385 in the previous year and only 485 candidates passed as compared to 480 in the previous year.

The ICAP posted a surplus of Rs15.5 million in its accounts whereas during 2003 the amount of surplus stood at Rs19.0 million.

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