Final Nail in Coffin: ICAP Refrain all Audit Firms in Pakistan to Employ Students of Foreign Accountancy Qualifications
In an interesting turn of events, Pakistan apex accountancy body ICAP issued a notice, dated 4th of July, reminding all audit firms in Pakistan to refrain from hiring students of foreign accountancy qualifications. According to the letter made available to EconomyAge, Institute of Chartered Accountants of Pakistan reminded the audit firms that hiring any person as student or trainee who’s related to any foreign accountancy qualification is a violation of Section 22 of the Chartered Accountants ordinance 1961.
Immediately after the notice was made public, which shocked to students and members of Accountancy bodies in Pakistan, rumors erupted about the authenticity and validity of this notice as many individuals on social media considered this letter as a fake document. Though, EconomyAge was able to get this notice confirmed from multiple industry professionals.
Language Used in ICAP Notice
ICAP has some tough words,apparently to make it clear to audit firms that hiring students of foreign accountancy qualification will be equivalent to assisting or aiding the violation of Section 22 of Ordinance. In other words, forget your license if you are planning not to comply.
In one para (Produced Below), ICAP considered foreign qualifications as an ‘Encroachment’ in the mandate of institute provided to them by the Govt of Pakistan:
“The identity, qualification and regulatory status of the Institute are protected under the Ordinance, particulary, section 22 of the ordinance prohibits any person to encroach in the mandate of the institute.” “Engaging any person as student or trainee pursuing a qualification or membership of an accounting body which uses a name the deceives or is likely to deceive the public, awards any certificate or bestow any designation which indicates attainment of any qualification possessed by a person by virtue of his being a member of the Institute or seeks to regulate the profession of Chartered Accountants, tantamounts to assisting or aiding the violation of Section 22 of Ordinance.
ICAP also asked the Chartered Accountants’ firms and members to not to assist or aid any person or Accounting body to carry out its operations in Pakistan which is a contravention of Section 22 of Ordinance. All the members of ICAP were advised to refrain engaging trainees of foreign institute of chartered accountants and also asked them to provide current status of trainees of other accounting bodies already working in firms within next 30 days of the notice.
Who are these Foreign Qualification and Bodies
Well those who are already in Accountancy qualification need no further explanation about who are these Foreign Accounting Bodies. For those who are not, following are the renowned foreign accounting bodies working in Pakistan.
- Association of Chartered Certified Accountants (ACCA)
- Chartered Institute of Management Accountants (CIMA)
- Institute of Chartered Accountant of England and Wales (ICAEW)
Out of these three, ACCA has the highest stakes in number of students and members in Pakistan, followed by CIMA and ICAEW, respectively. ACCA and CIMA both are working with their operations offices and staff for 10 and 5 years respectively and ICAEW is working through its representatives in Karachi and Lahore working voluntarily.
On social media, the real protest and anger was expressed by ACCA students and members who termed this notice as, ‘ICAP’s Nuclear War’, ‘Drone strike on ACCA’, and even ‘Insecure ICAP’. ”
While everyone has the right to express themselves but the truth is that ICAP is the body who has been entrusted with the responsibility to regulate and govern accountancy profession in Pakistan”, told us an ICAP member who is close to the situation, on condition of anonymity,
“There is nothing unethical with the decision. The question of ethics should be raised with these bodies especially ACCA”, he added.
ICAP’s notice did not mention names of any organization and this notice wasn’t uploaded at the time of this article which is allowing more and more people to comment and add to the prevailing uncertainty about the possible fallout of this decision.
People are now asking questions if ACCA, ICAEW and CIMA are working illegally in Pakistan? And if yes then why they have been allowed to work so openly for last so many years? There are fears as what would happen to the ACCA and CIMA students who are still in middle of their studies? Especially, there are serious concerns expressed by ACCA affiliates in numerous email sent to EconomyAge, who are all working in audit firms, about their future?
On social media – this notice is termed as the final nail in coffin of these bodies who have been facing tough time in front of ICAP’s policies.
Almost an year ago, ICAP reduced exemption for students of these qualifications. There are now speculations on social media that this notice will virtually eliminate these bodies from Pakistan.
Behind the Doors
Our team tried to utilize our inside connections to explore as what would happen next and what exactly is going on inside discussion rooms of these bodies.
According to a very reliable source, the decision to draft and issue this notice was made very quickly by ICAP’s council members and there wasn’t much objection within them. Given that there wasn’t much objections between them, it clearly indicates more stringent policies coming from ICAP in future.
Another of our source inside ACCA told us that this notice was being discussed by ACCA council members last night in Karachi and everyone expressed their serious concern.
“It was more like a shock session than discussion. ACCA is still working on a proper response to this situation”, told us another source close to ACCA Pakistan.
Official Responses from Accounting Bodies
We tried to contact every major stakeholder effected by this decision. Given that its Saturday and we cannot get much out from them.
CIMA’s country head, Javaria Hassan, promised to give her official response till Monday. Its worth mentioning here that Audit firms comprises 40% of CIMA approved employers in Pakistan.
The relevant person at ICAP was not on seat and we cannot get their official comment on the notice circulated widely on social media.
ACCA offices are closed on Saturdays and it was hard for us to get a detailed official version although ACCA Pakistan’ official confirmed us that the matter has been brought to their attention and they are looking into the situation”.
Given that its weekend, its hard for us to present the official stance of these organizations and Audit firms and to assess the possible fallout but our team is working on it and we’re all waiting for Monday with our fingers crossed.
EconomyAge is closely watching the development and we will keep you updated with any further development.
Following is the notice issued by ICAP to Practicing firms:
- ICAP Decided to take a Stand on its Notice: Sources
- ICAP Furious over Competition Commission: Sources
- ICAEW to Visit Pakistan to Clarify its Students on ICAP and ICAEW Relationship
- Lahore High Court Gives Stay Order to ICAP
- Breaking: ICAP Notice Was not Aimed for ACCA and CIMA