Establishing an audit firm

[mazharje]

May I put a question before the respectable members of this forum,especially pracs,Kamran aca etc.Tell me when a ca can open his audit firm when he is an aca or when he is a fca?

[kamranACA]

Dear,

Every ACA in Pakistan can open an audit firm. It makes clear that FCA can also open a firm whenever he likes.

However, in Pakistan, ACA or FCA before opening a firm must have to get a CERTIFICATE OF PRACTICE from ICAP on apllying for the same and depositing the required fee.

Further, permission to train the students is given by ICAP after three years of being in practice.

However, if ACA joins an existing audit firm as partner, his 10 seats (for training 10 studnets) are added to his partner who has secured a permission to train students. In his own capacity or as a sole proprietor he will have no seat until he completes 3 years of practice and then gets permission to train students.

Hope this would serve your purpose.

Regards,

Kamran.

[kamranACA]

One thing which appeared to me in your question required further clarification.

There is no requirement for becoming FCA to open a firm. ACA can open the firm provided

- he has certificate of practice;
- he can register students in his name, for training only when he completes three years of practice.

However, an ACA becomes FCA after

- ten years from being an ACA, if he is in industry
- five years from being an ACA, if he is in practice

Practice here means that he has obtained certificate of practice and is engaged in it.

Regards,

Kamran.

[mazharje]

Then what is the benefit of becoming a fca

[kamranACA]

Dear,

There are certain benefits of becoming FCA which interalia include a superior position/membership of ICAP showing more experience and knowledge.

I at the moment write down one benefit for you. List of others may follow this one.

In a professional firm, 10 seats of an ACA (for registering students with ICAP for training purpose) who is not a partner or is a partner having no permission to train the students are added to the seats of other partner of the firm who has the permission to train students. When such an ACA becomes the partner completing the minimum period of three years to get permission to train students, his seats are raised to 15.

When such partner becomes FCA further 5 seats are added to his credit. This way an FCA has 20 seats to train students while ACA has 15.

However, becoming FCA enhances the professional worth and is considered to be a senior chartered accountant.

I currently dont remember whether or not becoming FCA is necessary to contest for the president of ICAP. However, I would confirm you further benefits after checking the bye laws and CA ordinance.

Regards,

Kamran.

[rambo]

thank you sir for providing us such a valuable information