In Pakistan, even a doctor, engineer, mechanic, lawyer or even any illiterate citizen of Pakistan can conduct audit of a private limited company, not being a subsidiary of a listed company and having a paid up capital of less than three  million rupees apart from professional accountant. Rest of the audit can only be performed by the members of Institute of Chartered Accountants of Pakistan as per section 254 of the Companies Ordinance, 1984. However, due to the lack of quality in the provision of service of audit only the Quality Check (QC) approved chartered accountant firms are required to conduct the audit of listed companies. What a pity! SECP instead of providing the healthier competition within the accounting profession by opening the doors to other professional accounting bodies, like ACCA, ICMAP and PIPFA, escaped towards the restriction even within one accounting body’s members. People have a right to ask two fundamental questions; why isn’t there any other professional accounting body present in Pakistan except ICAP? Are SECP departments doing enough to ensure quality checks?
Accounting Profession in Pakistan
Accounting profession has its deep roots and is the modern form of stewardship. This profession has its deep roots prior to the independence of Pakistan through the Income Tax Acts, Companies Act, and Sales Tax Acts. Almost all of these legislations contain the names of foreign accounting bodies like ICAEW, ACCA [under old name] etc. In 1956, Industrial Accountants body was formed followed by ICAP in 1961. Almost all the members of these two accounting bodies are foreign qualified either from India or England and Wales.
ICAP emerged as the leading body owing to the understanding of the concept of external audit by the general public. However, ICMAP [industrial accountants] had open heartedly shared the still unknown concept of cost audit with the ICAP members. ICMAP members are also doing training under chartered accountants for getting the qualification of ICAP for practice purposes. However, the students of ICMAP have already studied those subjects.
ACCA showed its presence in mid-nineties in Pakistan and majority of the students are nowadays training with QCR-rated companies of ICAP for the last 4 to 5 years on a continual basis and the number is growing day by day. To prepare its Pakistani students for the local environment, ACCA has adopted the Pakistani Company and Tax laws as part of its syllabus. Currently ACCA is conducting its examinations in almost all major cities of Pakistan through the British Council Library.
PIPFA [formerly known as AAT] is a body jointly sponsored by ICAP, ICMAP and Auditor general of Pakistan (AGP) to replace SAS. It is a second tier body with enormous syllabus and its final stage contains the crux of final stage of ICAP syllabus, except for IT. Within a decade this body had emerged as the only alternate for 2nd tier accountant apart from Certified Accounting Technician [CAT – a similar technician body of ACCA].
All the above referred accounting bodies require a minimum number of training periods ranging from 3 to 5 years. ICAP requires 4 year article ship under its member, ICMAP and PIPFA require a 3 year period. However, ACCA’s training of 3 years is a bit structured and documented. The student is required to fill diaries signed by their supervisor and may be selected for audit by ACCA. The diary contains a diversified exposure portfolio which includes audit, internal audit, cash management, finance, taxation etc.