Is ICMAP bigger than CIMA?

[tariqsohail]

Mr. Kamran,

Without going into long post I again mentioning that nothing is new in your first post which needs specific concenteration at ICMAP level & this was clearly understand by Mr. Awais due to experience of inside situation of ICMAP.

When I used word "Outside" I was speaking only in terms of inside of "ICMAP", and I am sure there is nothing hidden in my post which will say that you are oustider in any situation except ICMAP.

Cheers.

Regards.

[kamranACA]

Tariq

Either the problems do not exist or they exist. If they do not exits, or their level is so insignificant, then there is no issue. If they exist there can be two situations; firstly, they might be well known to the concerned ones, and/or secondly, there might be lot of ignorance for such existance of issues and problems.

In case they are well known then the required cohesive action should not be over-delayed provided the circumstances do not hinder such action because over-delaying proves an element of ignorance. In a situation where things are being explored and there is no over-delay, you would be right in saying that I have not posted anything new.

In case of ignorance, at least the succesful models should be pondered upon. Since, personally I feel there is some ignorance as well, I am of the view that so much should be done that has been ignored or at least over-delayed.

I may be wrong in this very conclusion (and not in the suggestions given) and may be right as well. However, the upcoming developments of ICMAP will prove where it will be leading to. I believe it is a quality institute and must be thinking on how to take a step forward for the betterment of its members specially those in practice and we will be seeing good things in the coming days.

And yes, you don't know for sure whether or not I am an outsider for ICMAP, so there can be doubts on validity of your conclusion as well. Further, my post was generalized in nature and pointed out broad list of a very few steps, which I guess should be taken, so it does not at all require some pure insider to make it out. I have already invited for discussion on its contents that I believe were not based on any biase. If you feel this all is known then you may be right in saying that there is nothing new, but will arise some other questions.


Best of luck to all of you.

Regards,


KAMRAN.

[Ajnabi]

Dear Kamran Sab,
I have almost spent 4 – 5 hours to go through the comments of you and other at this thread, you are quite a good person as I evaluated, but I have realized that you have Some type of allergy with ICMAP, which is seen in many cases, in chartered accountants of Pakistan.

As you requested many times in this thread that separate discussion to be started for this topic, I am initiating a new topic at the following thread,

http//www.accountancy.com.pk/forum/topic.asp?topic_id=9537


Since, much of the discussions at this thread are nothing except a nugatory debate.
<font size="2"><b>
Please continue the topic at the thread, the link of which is aforementioned.</b></font id="size2">

[kamranACA]

Dear Ajnabi brother

We have a generalized habit to take even the positive aspects of a discussion as negative if it some where hurts our feelings. I have no allergy with ICMAP or its members or students. However, I do have issues with any thing alleged or complained without a reason and declarations made without a strong basis.

You go through all the topics wherever ICMAP is discussed by any of its member or students. In majority of the cases you will see some grouses and complaints with CAs refelctive in such posts in one way or other. When things are clarified to explain the reasons of a certain situation, such explanation is taken and colored as "allergy" or "biase".

I know ICMAP has a nice role to play in the country and its professionals are serving at national as well as international level. All the institutes have been facing issues and challenges and these challenges keep on emerging on the scene since the world is changing every moment.

Every body who has an interest and wishes to establish a clear view of the situation will have to base his opinion on ground realities instead of complaints. Ground reealities can be changed with a positive intention to do so and I hope people must be working on it.

So, I am of the view that anything (either "new" or "old") if has not been addressed should be evaluated for the best interest of students and members and simple complaints and grouses with some lacking of ability to create a place in the market shouldd not be alleged to others in competition.

Regards,


KAMRAN.

[Dard]

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by kamranACA</i>
<br />Dear Ajnabi brother

We have a generalized habit to take even the positive aspects of a discussion as negative if it some where hurts our feelings. I have no allergy with ICMAP or its members or students. However, I do have issues with any thing alleged or complained without a reason and declarations made without a strong basis.

You go through all the topics wherever ICMAP is discussed by any of its member or students. In majority of the cases you will see some grouses and complaints with CAs refelctive in such posts in one way or other. When things are clarified to explain the reasons of a certain situation, such explanation is taken and colored as "allergy" or "biase".

<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Agreed upon

[saleen.super]

The building of ICMAP (lahore) is indeed "smaller" than that of ICAP (lahore) lol. P

[awaisaftab]

Dear kamran/Tariq Bhayee and Ajnabi


I was too busy on yesterday so I could not post any comment on the thread.
Tariq bhayee thanks a lot for giving explanation to Mr. Kamran on my behalf I think you have well defined my view point and there is no need to say something in this regard


Anyhow now I come on the discussion going on the thread.

Mr. Kamran

I, tariq and Ajnabi have discussed the issues relating to the improvement of the education and professional level of CMA’s. It shows that we are broad minded and optimistic. I have been member of the forum for one year but I have never seen any student or member of ICAP discussing the areas of improvement. But we are discussing the areas where improvements are required.

Although I have adopted a policy of Not to pass any comment about any institute with which I have no any affiliation. But Mr. Kamran always says that it is my own So Called ETHICAL STANDAR and the forum rules do not restrict him from discussing shortcoming of ICMAP.He is still writing articles of long pages to bring revolutionary changes in ICMAP. So for the time being I am getting exemption from this my self made ethical policy.

Mr. Kamran Kuch Nazre Karam ICAP per bhee enayat farmayee aakhir ap us k Associate Member hain.

Lets start our discussion with Code of Ethics of ICAP


The code of ethics is available on the ICAP website at following link

http//www.icap.org.pk/userfiles/file/CodeofEthicsRevised.pdf

Sub section 2 of section 260 of the code of ethics allow CA’s to accept gift from clients exact text is as follows

The significance of such threats will depend on the nature, value and
intent behind the offer. Where gifts or hospitality which a reasonable
and informed third party, having knowledge of all relevant information,
would consider clearly insignificant are made a chartered accountant
in practice may conclude that the offer is made in the normal course
of business without the specific intent to influence decision making or
to obtain information. In such cases, the chartered accountant in
practice may generally conclude that there is no significant threat to
compliance with the fundamental principles.

Dear Members we all know that the Auditors act on the behalf of shareholders. So it looks very inappropriate that the auditors are allowed to receive gifts from the clients but according to section
197-A of companies ordinance companies are prohibited to distribute any gift to members and shareholders in meeting and generally no gifts are distributed among shareholders. This is big contradiction in the code of ethics. Someone can say that the code allow the member to accept only the gifts with insignificant value but who shall determine the which gift having significant value???

This is the reasons the auditors accept gifts of huge value from clients.

Mr. Kamran you should give suggestion to ICAP that there should be complete restriction on receiving gifts by the CA’s from clients.

In repealed code of ethics which has been suspended by the ICAP due to revised code the word of ‘Entertainment was also included. But now this word has been replaced with the word “Hospitality”. I don’t know what the intension of this repulsion was? The old code of ethics is available in the book of Practical Auditing by Javed .H. Zuberi, a renowned Charted Accountant, According to Clause E of sub section 2 of section 1 of part A of the Repealed code chartered accountants were allowed to receive entertainment and gift from clients but in the <b>veil</b> of insignificant value.

It was my first experience the audit was continued in my company. Our company also provided lunch facility fortunately or unfortunately my director finance on leave. The menu of that day was Mix Vegetable. The audit supervisor came in my room and said that he and his team members didn’t want to eat vegetable and demanded me lunch from a well known restaurant. In some situation I unintentionally response too aggressively.It was also happened at that time. I rejected his request very aggressively and ordered him to get out from my room. I also delivered a lecture on the ethical behaviour that should be followed by the auditor here is no space to reproduce that lecture.

An organization which is an autonomous body of Ministry of Petroleum in such organization one of my relative works . Some month ago he met me he were very aggressive due to behaviour of their auditor . On my inquiry he told me long story of their auditors which include demand of delicious food, extensive use of organization’s vehicle for visiting Murree, Aubia and other places.

One of my friend made the accounts of a partnership he wanted to get audited these accounts for getting loan and leasing of vehicles he was too worried. He called me fortunately I personally know some CA’s and trainees we visited some CA firms and finalised the deal against Rs.25,000/- only, It was 2007 I guess now the rates have increased.


According to directives of SECP and the guidelines issued by ICAP auditors and Chartered accountants are restricted to provide only few services, especially in case of listed companies, I am sorry to say that I know about a big four audit firm which is providing share registration services to its one client. This is a confirmed violation of rules and regulations as well as ethical standards.

For auditors it is necessary that he must have the knowledge of all IAS but in hundreds of cases no Deferred Tax Asset/Liability are not booked in the audited accounts, this shows that in our country only few persons know about IAS-12. This is also happened in the company with which I am currently working. Incompliance with IAS-19 is also very common in many cases.

One of my friend who is ICMA (Finalist) worked out deferred tax calculation but his auditor rejected his working saying that IAS-12 cannot by applied in Pakistan due to unique taxation system.

ISA requires the behaviour of susceptibility how we can expect this attitude from the auditors who fulfils their wishes during audit and demand tours of hill stations, delicious food, treats high teas, and use of clients vehicles.

Another thing which should be looked after by ICAP is the provision of accounting services to the clients by the auditors it looks too funny that a firm of Chartered Accountants provides accounting consultancy to a client and conduct the audit of its own made accounts. It is mentionable point that the audit manager of big audit firms (including big 4) are running their private accounting consultancy firms their clientele consists of majority of their firms clients. (Is ko kehte hain panchon unglian ghee main aur sir Karahi main)

Why ICAP and audit firms don’t take actions against these audit managers.



Indeed due to current prevailing situation audit practice in Pakistan has become a joke. We observe many sorrowful audit practices in real life. A person who was part of an audit team during the audit of a partnership firm, the audit was made on the request of a sleeping partner, told me in very happy
mood
about the VIP treatment. He told me during that audit they daily visited some good restaurant or hotel including five star hotel of twin cities like Marriott, PC Hotel (both PC Rwp and Bhurban)
Serena Hotel,Usmania Tabaq and Jhangir. So during 1 month period of audit the audit team did not leave any good hotel and restaurant of Rawalpindi and Islamabad.


It is questionable why ICAP do not cancel the registration of such notorious audit firms What is the mechanism of accountability of audit firm.
I am sorry to say the Quality Review Program of ICAP, which has been carried on for many years, has totally failed.

The bad audit practices give rise to the exploitation of minority shareholder and in some cases even of majority shareholders. Good auditing practices are key to good corporate governance. Without good audit practice we could not expect a corporate sector with best corporate governance.

It is the religious, ethical and legal responsibility of audit trainees, supervisors, audit managers and partners that all the audit performed by them should be fair and in honest way.

It is also fabulous reality that many practicing CA’s have gone in litigation against ICAP. These case are also part of books on company laws.

The above was a small picture of audit firms and malpractices in audit the big picture is more horrible and teasing. Those who are public practice as practicing chartered accountants know better than me. Keep in mind these are the some issues which I observed during my professional career of only about 4 years.
After all there may be some rare exceptional cases.


Regards,

Awais Aftab

[Dard]

There maybe other institutes too which allow the acceptance of gifts provided they are also given to the company's employees or third parties, and are of insignificant value which do not threaten the fundamental principles of ethics. I am astonished to see the examples of breaking the ethics code given by awaisaftab. I didn't expect an auditor to behave in such ways

[Dard]

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by awaisaftab</i>
<br />I want to draw attention of you people about the IAS issued by ICAP in 2008. On some copies of the IAS/IFRS 2008 at the title page the name of ICAP was Institute of Charted Accountant of Pakistan instead of Institute of Charted Accountants of Pakistan
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Institute of <b>Chartered</b> Accountants of Pakistan

[kamranACA]

{I am sorry folks; I am again going at length as the need has arisen to do so.}


Dear Awais

Tariq did not give any explanation on your behalf first of all; he only made an assessment that you did understand but “what was that which you understood” is unexplained. Only you can tell what exactly you understood when at one point you were feeling my post “very good” and at the other you said you were commenting only the “good points”. My question still needs to be replied by you provided you feel like doing so. You so far failed to explain the “bad points” in my post which I have invited you to point out. Instead you have starting beating about the bush that is your very old habit and that some other fellows have explained in a great deal.

A brief comment on your post regarding auditors and ICAP members is “You simply don’t understand anything about audit firms, the way their remuneration, facilities and entertainment is determined and approved, what this code of ethics is and how it is developed, and so many other crucial aspects, which without understanding if commented upon, will present nothing but a confused situation that your post depicts.”

Believe you me its nothing but a picture of confused mind’s perception and a feeling of having been deprived of some thing which you see others doing. I never commented on what and how people have analyzed you since it is not good to pinch some one personally for simply a debate. However, most of your questions are only cropping up in your mind because you don’t know the things. Just recall one of the old examples; you are probably “Accounts Manager” of a Medium or Small sized company and you were entirely ignorant of what local Financial Reporting and Accounting Standards have been developed for such companies and implemented through SRO 859(I)/2007. I remember you denied the existence of such standards at all and when you were informed and shown the truth you were not able to comment anything. I am not trying to mis-portray or undermine your personality. I might have thousands of shortcomings and a human learns life long. You can learn from me and I can learn from you and this process continues till the date of death. However, the purpose of reminding is that at so many occasions we don’t know the things and we mis-interpret them. Rest assured these will vanish once you will qualify and you will see the world.

You know due to your confusion you could not differentiate very much personalized acts of some individuals from the ethical requirements, precedents, policies and procedures of an institute that is the apex accountancy body of your country and on which all professionals are in fact dependent in one way or other.

A unique example of such confused mind is the BIGGEST allegation which you found about ICAP regarding some printing or typographical mistake on a book. You were so much confused that you yourself could not even properly spell out the word “CHARTERED”. If this is the condition of an evaluator, then should he evaluate anything and is he not personally confused or ignorant? Specially when his evaluation only surrounds a typographical mistake?

BROAD MINDED!

So my broadminded brother, if you failed to see the posts and threads where ICAP students have criticized their institute, and where so much has been discussed for improvements and considering the needs of the hour and making recommendations etc. then what can I do? Either you have to read all the messages in various threads or you should reconsider thee word “broad minded” for at least yourself. My brother, training arrangements, facilities, human resource issues, stipends, examination policies, exam leaves, loopholes, complaints / grouses and their solutions, lack of student in-take by firms, environment of firms, problems of new students, so-called “jabri mushaqat’, “what ICAP should do in what situation” and least but not last the recent posts exchanged on one of the thread at sub-forum “FIRMS” about ICAP’s recent survey……….. this all is about ICAP and is discussed, criticized, resolved, recommended, suggested by ICAP members or students mostly. If you cannot see it or if you don’t know what this is all is about then what can I say? By the way, it’s also a confused mind’s definition of being “Broad Minded” where he cannot even appreciate what others are saying even if he reads the posts and visits the threads. If you don’t visit the threads and don’t read the posts then this allegation is totally an output of confused mind.

CODE OF ETHICS!

If you don’t know how this code is developed, and to which international pronouncement it must comply with and without doing so it cannot be implemented, then what service I can offer to remove your confusions. You are totally unaware (although in certain recent posts we discussed the phenomena) of all the aspects of a code of ethics. You clicked your confused idea from Maqsood’s post and started reading the Code of Ethics without knowing the basics. I would suggest you to first complete your education and qualification, then comprehensively read how IFAC, IASC, IFAC boards and committees were established, what are the structures of such boards/committees and whether or not Pakistan is represented on them now or in past, how over the time standards and professional pronouncements were developed, altered, revised, what was the purpose of doing this all, what were year-wise changes in each standard, why some of the standards were replaced or totally repealed, where we are compliant as a country and where compliance is not possible and why it is not possible, why local pronouncements over-rule international ones and where such differences exist….. so on ….. and so forth. Then you may also try to understand the Code along with the procedure that how it is developed (and how necessary is to comply this Code with the Code issued by IFAC), you will hopefully understand what it is. Your allegation is lame, without understanding the facts and needs no clarification at all since it will tentamount to strike my head against a rock (at least in this case). I know I am wasting so much time with you but it would be a total purposeless wastage to give you a comprehensive lecture on Code. Every one who knows what is what will laugh at your post. You know I use to say that you have your own Code of Ethics. I know you cannot understand. Some other brothers have highlighted it as well. I will only say that please don’t adopt a Maulvi sb’s strategy or methodology in analyzing the things. They can make such basis (as you have made in your post) and declare that whoever would believe that Human has visited Moon will be Kaafir. You have done similar things.

……………………….I am currently on one of the special committee constituted in Pakistan to analyze the latest revision in Code Of Ethics issued by IFAC last year and I can go at so much length to make you understand even clause-wise differences, amendments, revisions and clause –wise variance with reasons from the Code at the moment implemented in Pakistan. However, I am not doing it for obvious reasons explained in previous lines………………………

AUDIT TRAINEES’ LUNCH!

You said, “it was my first experience the audit was continued in my company”. So brother, if you are totally new to a thing you cannot understand it at once. Take time and you will come out of very petty issues of “Mix Vegetable” and “lunch, vehicles, guest house stays, hotel stays, by-air traveling, well known restaurant” etc. The remuneration and facilities provided to auditors are always as per approval of shareholders and these may include (dependent upon agreed terms) the seating arrangements, office space, computers/printers, stationery, other logistics, free usage of vehicles, phones an faxes (for official use of course), free meals (which are always of reasonable quality), free stay at guest houses or hotels, free by-air traveling if required and such other things. If minutes of your shareholders meetings have not been properly drafted, raise this point internally (for next year draft it properly and in quite detail) and wherever you feel things are over your capability or beyond the agreed terms, clarify it with management and then through CFO with the audit firm’s engagement partner. It’s very simple.

You cannot shift the responsibility of any wrong doing of individuals (if it really is) to the entire firm or the Institute. People, including myself and yourself, individually may have so much deficiencies and lacking. Every thing can be amicably resolved. There was no need to getting aggressive at all. Who knows what limits you or I may also be crossing as far as rights and obligations are concerned? If you are also not doing the needful (as proposed in above paragraph upon such incident) then you are also at fault. Correct your record, properly record the minutes, clarify the rights and obligations, and stick to it. If some one is doing wrong, report it to the audit firm. What’s issue in it that you are highlighting at the forum in the way you did? I can bet that your minutes would not be properly drafted and you would be missing written agreed terms and would be doing the things as per precedent. Normally, such facilities are provided from year to year under the situation of a precedent. It is by no means illegal or unjustified if you have agreed it in writing in shape of minutes. Normally out of pocket expenses are agreed without agreeing a cap. This creates issues, so if you have problem with auditors (which I know your management must not have), you can do the needful, provided you are empowered to do it. However, if things are done or demanded beyond the agreed terms by audit staff, it is also wrong at their part. Still, it is individual act.

We in firms also host so many guests (prospective or existing clients and specially upcoming clients from abroad). We always offer them nice tea, coffee, lunch or dinner at quality places including five star hotels’ restaurants and in some cases stays as well. In most of cases such guests don’t even finally give us the business. These all are moral, precedental, and normal practices and are remembered as a good gesture. If some where some one is feeling jealousy as to why such guests are being treated with nice hospitality, then it will raise no issue but reflection of deprival and confusion.

LESSER AUDIT FEE AND NOTORIOUS COMPANY!

ATR-14 is in place to define how audit fee is calculated. It was also there in 2007. Audit firm can decide fee within the prescribed limits and I guess Rupees 25,000 for a small partnership would not be too short in 2007. However, it has to depend on fee slabs applicable at that time. What point you are making by telling this fee?

As far as notorious firm is in question, you at your own have accepted that action has been taken against him. In early days such actions were taken by SECP but now this right mainly exists with ICAP and not SECP. This is important to understand. Individuals can be wrong. What’s issue in it? If there is a monitoring system in place, quality check is made, performance is evaluated, systems and procedures have been implemented then notorious elements do not survive in the longer run be it whoever. Institutes and bodies make procedures and systems and then monitor the people under its yardsticks. They are a check on malpractices but are not at all a surety that no malpractice will ever happen. For an understandable example, Islam is a best code of life, did it ever provide surety that no malpractice will happen. Yes, it provided yardsticks, monitoring methodology and the punishments when malpractices are done. This is a basic principle.

Some questions for you. Have you heard of Quality Assurance Board and do you know who its members are? Do you know which firms can audit Listed companies? Do you know what is SBP’s panel for auditors? Have you ever heard Modaraba’s panel or stock exchanges’ panels for eligible auditors? Do you in fact know what is Quality Control Review of firms, who and how it is carried out? And what actions are taken against members guilty of professional misconduct? Do you at all know what is “professional misconduct”? Are you aware how many and what actions ICAP has taken against its members in say last 5 years? If you don’t know then what point are you making out here as a philosopher. Just to counter some thing. Kia ho ga is qaum ka?

Try to understand that my post about ICMAP is not a criticism on its practices and/or an attack on the honesty and practices of its members (which you are not so far). I have always well regarded CMAs who are or were working at my clients (specially in public sector) and the CMA institute as well. The purpose of my post was to highlight the areas which if they will improve will enhance their audit capacity building speed and effectiveness. I no where degraded any one in my post specially like the cheap acts of mentioning some CMA’s names with what they have or they are doing. Should you require listening what most of your CMAs are doing in public sector? I can quote 100s of such examples. If yes, ask me in private to let you know since declaring it on forum with names may be unprofessional. So, if you are countering it, then raise some quality issues and discuss some real lacking areas so that we may be benefited by it. Don’t act childishly without understanding anything just to satisfy some inner hurts.

You said,

“According to directives of SECP and the guidelines issued by ICAP auditors and charted accountants are restricted to provide only few services, especially in case of listed companies, I am sorry to say that I know about a big four audit firm which is providing share registration services to its one client. This is a confirmed violation of rules and regulations as well as ethical standards.”

I am sure you cannot prove any violation. Although individuals and/or even firms can do wrong things but certainly if some Big 4 has done it, it must have reasons or law’s interpretation for doing so. You wrote this again because you are entirely ignorant and unaware of the structures of the professional firms and are totally confused of where you are in this world. I would like to caution you to completely understand the matter you are wishing to write and then come back if it is still not clear to you with the facts of the case.

IAS APPLICABILITY!

Again this reflected your partial lack of knowledge of the subject matter. Are you aware that financial statements are the responsibility of management AND NOT OF AUDITORS? If auditor (in a given case) is ignoring some thing he will have to face the consequences and it is the real life fact. Some one cannot escape all the life. However, you tell me how much lacking you have of the required expertise and knowledge that you transfer your responsibilities on the shoulders of the auditors and even then claim to be Manager of Accounts. Why should auditor tell you what you have to do? Escaping disclosures and providing as short as possible information is always the tendency of management. If you have prepared financial statements without taking into account IAS-12 then primary responsibility is yours. Auditor is not required to prepare disclosures or make accounts on your behalf. He should modify his report if required as per ISAs and if he has not done so he is only responsible for his report and audit. Even then for financial statements only you are responsible. What point have you tried to make my brother?

You said, “Incompliance (probably non-compliance) with IAS-19 is also very common in many cases”. Can you tell me in which cases you found this non-compliance? Just quote a few cases and I believe it will be your misunderstanding to a greater extent. I hope you would not be knowing which companies don’t need (as a must) to follow actuarial method and for which companies it is a must. I can bet. If you will ask why, then I will tell you why I hope this for you. Please come with examples. Moreover, if it is there by all means, then who is primarily responsible for it? Certainly you the Manager Accounts i.e. the management. How can you shift your responsibility and eventually try to connect it with some thing missing at the part of ICAP. Try to understand that auditor is responsible for his report. If he is lacking on this area he faces consequences. It is an on-going process and all MATERIAL cases are evaluated to assess it.

You said,

“This shows that in our country only few persons know about IAS-12.”

What should I comment on it. You are proving a point against ICAP and you don’t even realize by saying this you are fully disgracing your CMAs as well who claim to know every IFRS/IAS. Kia cheez ho yaar.

One further example of your stance; you said,

”One of my friend who is ICMA (Finalist) worked out deferred tax calculation but his auditor rejected his working saying that IAS-12 cannot by applied in Pakistan due to unique taxation system.”

What is it? If auditor will ask you or your so-called friend to fall in a well, will you be doing it. Mashallah. A grave example of what I pointed out at the outset of this post about the attributes of your message. You don’t even know what you are saying.

I will wait for your comments on this post and will also look forward to the stuff you are saying is yet to come.

Regards,


KAMRAN.

[kamranACA]

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by awaisaftab</i>
<br />Dear kamran/Tariq Bhayee and Ajnabi


I was too busy on yesterday so I could not post any comment on the thread.
Tariq bhayee thanks a lot for giving explanation to Mr. Kamran on my behalf I think you have well defined my view point and there is no need to say something in this regard


Anyhow now I come on the discussion going on the thread.

Mr. Kamran

I, tariq and Ajnabi have discussed the issues relating to the improvement of the education and professional level of CMA’s. It shows that we are broad minded and optimistic. I have been member of the forum for one year but I have never seen any student or member of ICAP discussing the areas of improvement. But we are discussing the areas where improvements are required.

Although I have adopted a policy of Not to pass any comment about any institute with which I have no any affiliation. But Mr. Kamran always says that it is my own So Called ETHICAL STANDAR and the forum rules do not restrict him from discussing shortcoming of ICMAP.He is still writing articles of long pages to bring revolutionary changes in ICMAP. So for the time being I am getting exemption from this my self made ethical policy.

Mr. Kamran Kuch Nazre Karam ICAP per bhee enayat farmayee aakhir ap us k Associate Member hain.

Lets start our discussion with Code of Ethics of ICAP


The code of ethics is available on the ICAP website at following link

http//www.icap.org.pk/userfiles/file/CodeofEthicsRevised.pdf

Sub section 2 of section 260 of the code of ethics allow CA’s to accept gift from clients exact text is as follows

The significance of such threats will depend on the nature, value and
intent behind the offer. Where gifts or hospitality which a reasonable
and informed third party, having knowledge of all relevant information,
would consider clearly insignificant are made a chartered accountant
in practice may conclude that the offer is made in the normal course
of business without the specific intent to influence decision making or
to obtain information. In such cases, the chartered accountant in
practice may generally conclude that there is no significant threat to
compliance with the fundamental principles.

Dear Members we all know that the Auditors act on the behalf of shareholders. So it looks very inappropriate that the auditors are allowed to receive gifts from the clients but according to section
197-A of companies ordinance companies are prohibited to distribute any gift to members and shareholders in meeting and generally no gifts are distributed among shareholders. This is big contradiction in the code of ethics. Someone can say that the code allow the member to accept only the gifts with insignificant value but who shall determine the which gift having significant value???

This is the reasons the auditors accept gifts of huge value from clients.

Mr. Kamran you should give suggestion to ICAP that there should be complete restriction on receiving gifts by the CA’s from clients.

In repealed code of ethics which has been suspended by the ICAP due to revised code the word of ‘Entertainment was also included. But now this word has been replaced with the word “Hospitality”. I don’t know what the intension of this repulsion was? The old code of ethics is available in the book of Practical Auditing by Javed .H. Zuberi, a renowned Charted Accountant, According to Clause E of sub section 2 of section 1 of part A of the Repealed code chartered accountants were allowed to receive entertainment and gift from clients but in the <b>veil</b> of insignificant value.

It was my first experience the audit was continued in my company. Our company also provided lunch facility fortunately or unfortunately my director finance on leave. The menu of that day was Mix Vegetable. The audit supervisor came in my room and said that he and his team members didn’t want to eat vegetable and demanded me lunch from a well known restaurant. In some situation I unintentionally response too aggressively.It was also happened at that time. I rejected his request very aggressively and ordered him to get out from my room. I also delivered a lecture on the ethical behaviour that should be followed by the auditor here is no space to reproduce that lecture.

Hydrocarbon Development Institute of Pakistan is an autonomous body of Ministry of Petroleum. One of my relative works here. Some month ago he met me he were very aggressive due to behaviour of their auditor . On my inquiry he told me long story of their auditors which include demand of delicious food, extensive use of organization’s vehicle for visiting Murree, Aubia and other places.

One of my friend made the accounts of a partnership he wanted to get audited these accounts for getting loan and leasing of vehicles he was too worried. He called me fortunately I personally know some CA’s and trainees we visited some CA firms and finalised the deal against Rs.25,000/- only, It was 2007 I guess now the rates have increased.

Malik and Co, Chartered Accountants, was notorious for these fake audits. I think a corrective action has been taken by SECP against Malik and Co.

According to directives of SECP and the guidelines issued by ICAP auditors and Chartered accountants are restricted to provide only few services, especially in case of listed companies, I am sorry to say that I know about a big four audit firm which is providing share registration services to its one client. This is a confirmed violation of rules and regulations as well as ethical standards.

For auditors it is necessary that he must have the knowledge of all IAS but in hundreds of cases no Deferred Tax Asset/Liability are not booked in the audited accounts, this shows that in our country only few persons know about IAS-12. This is also happened in the company with which I am currently working. Incompliance with IAS-19 is also very common in many cases.

One of my friend who is ICMA (Finalist) worked out deferred tax calculation but his auditor rejected his working saying that IAS-12 cannot by applied in Pakistan due to unique taxation system.

ISA requires the behaviour of susceptibility how we can expect this attitude from the auditors who fulfils their wishes during audit and demand tours of hill stations, delicious food, treats high teas, and use of clients vehicles.

Another thing which should be looked after by ICAP is the provision of accounting services to the clients by the auditors it looks too funny that a firm of Chartered Accountants provides accounting consultancy to a client and conduct the audit of its own made accounts. It is mentionable point that the audit manager of big audit firms (including big 4) are running their private accounting consultancy firms their clientele consists of majority of their firms clients. (Is ko kehte hain panchon unglian ghee main aur sir Karahi main)

Why ICAP and audit firms don’t take actions against these audit managers.



Indeed due to current prevailing situation audit practice in Pakistan has become a joke. We observe many sorrowful audit practices in real life. A person who was part of an audit team during the audit of a partnership firm, the audit was made on the request of a sleeping partner, told me in very happy
mood about the VIP treatment. He told me during that audit they daily visited some good restaurant or hotel including five star hotel of twin cities like Marriott, PC Hotel (both PC Rwp and Bhurban)
Serena Hotel,Usmania Tabaq and Jhangir. So during 1 month period of audit the audit team did not leave any good hotel and restaurant of Rawalpindi and Islamabad.


It is questionable why ICAP do not cancel the registration of such notorious audit firms What is the mechanism of accountability of audit firm.

I am sorry to say the Quality Review Program of ICAP, which has been carried on for many years, has totally failed.

The bad audit practices give rise to the exploitation of minority shareholder and in some cases even of majority shareholders. Good auditing practices are key to good corporate governance. Without good audit practice we could not expect a corporate sector with best corporate governance.

It is the religious, ethical and legal responsibility of audit trainees, supervisors, audit managers and partners that all the audit performed by them should be fair and in honest way.

It is also fabulous reality that many practicing CA’s have gone in litigation against ICAP. These case are also part of books on company laws.

The above was a small picture of audit firms and malpractices in audit the big picture is more horrible and teasing. Those who are public practice as practicing chartered accountants know better than me. Keep in mind these are the some issues which I observed during my professional career of only about 4 years.
After all there may be some rare exceptional cases.


Regards,

Awais Aftab

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This is copied here because you are continuously changing it. Editing for spelling mistakes is no issue but changing the material can affect the validity of replies.


Regards,

[Dard]

Kamran bhai i would like to know the details of the code of ethics and how the acts pointed out by awaisaftab were not un-ethical. It will increase my knowledge

[kamranACA]

If you like to do so, please download IFAC's code of ethics and compare it with ICAp's code. Then come back with the differences.

I will certainly explain you the reasons.

Regards,

[tariqsohail]

Mr. Karmran,

I don't want to write any long post about your comments on Awais on this public forum because you are a senior member of this forum and more importantly representing a respectable institute (ICAP).

You are providing good information to juniors who wants to pursue CA but I want to alert you that be careful and soft when you are writing about somebody.

Everybody should have right of difference of opinion but don't take these things to personal levels like you write about Awais.

Set a good example for juniors of this forum and if possible..please edit your post.

Mr. Awais,

Please try to stay calm. I would suggest we should wait how Kamran react to my this post and if he is ready to put things on calm note then we should show a good gesture as well.

[shani420]

Actually the thread was "Is ICMAP bigger than CIMA?" but it has turned into a "ICMAP vs ICAP" debate with an intensity level equal to India vs Pakistan match!