SECP Vs. Chartered Accountants.

Pooooh · 09-13-2003, 03:41 AM

<img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>
Ooooeyyyy Pervez sb u got serious,
you called me Bear accepted, as my whole family call me bear <img src=icon_smile_big.gif border=0 align=middle>, and my nick is Pooooh bcaz of my teddy bear i have from my childhood,
and tell me pervez if a Donkey change its name from "DONKEY" to "PERVEZ" will he become human being ??
same is the case with you <img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>

now on english
my english is poor and i m not sharminda on it <img src=icon_smile.gif border=0 align=middle>
main gora saab kay jootay chatna pasand nahi karta (like you) and i prefer to live in pakistan (my great country) as most of qualified people (holding the degrees they have i cant pronouce) go abroad and do janitar job yes cleaning the TOILETS (what amount you earn pervez??)
and give bath to gora saab's dog <img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle> yar pervez sb. i have passed the Paper of English of "ICAP" and they dont take bribe <img src=icon_smile_big.gif border=0 align=middle>,

and pervez saab, aap kee english say lagta hai keh aap kee mother language "English" hai <img src=icon_smile_big.gif border=0 align=middle>

look how much pakistan has done tarraaki as me (a villager called by you) has appeared in Module D of ICAP <img src=icon_smile_big.gif border=0 align=middle>

and suiside oooooh pervez sb
kia aap nay koi bhi shaks dekha hai jis nay "Donkey" kee dheechoon dheechoon say suiside kar lee ho<img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>
lekin i am confident keh aaj aik Donkey aik Bear (Pooooh) kee waja say Suiside kar lay ga <img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>
<img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>
<img src=icon_smile_cool.gif border=0 align=middle><img src=icon_smile_cool.gif border=0 align=middle><img src=icon_smile_cool.gif border=0 align=middle><img src=icon_smile_cool.gif border=0 align=middle>

Edited by - Pooooh on Sep 12 2003 104202 PM

Pervez · 09-13-2003, 06:32 AM

Hi Winni the Pooh!

My problem is that i cann't determine your mother tongue because you switch between half baked english and half baked desi!!

So shall we say your pedigree is unknown (if you can figure this one out i will send you 100 dollars - it will help towards your medication)

Keep the doctors' visit regular and don't go on internet when you run out of medicines!!!
<img src=icon_smile_cool.gif border=0 align=middle><img src=icon_smile_cool.gif border=0 align=middle><img src=icon_smile_cool.gif border=0 align=middle>

Bowman · 09-13-2003, 03:23 PM

<BLOCKQUOTE id=quote>quote<hr height=1 noshade id=quote>
Mr Pervez aaap CA field main aa jaen, aap bohat kuch seekh jaen gay, Lekin aap ko is kay liye HSc. (intermediate) karna paray ga, to phir aap eligible ho jaeen gay,

<hr height=1 noshade id=quote></BLOCKQUOTE id=quote>

Poooh, I think that now you are just assuming a childish stance and show of immaturity (which naturally comes with your age, i think that u have just passed your teens 2-3 years before...right???)

Mr Pervez, as I believe, is a very senior FCA and had been an ACA since you were still in school, so as a professional show some respect.

Dont take it personally

Cheers

smraza · 09-13-2003, 05:11 PM

Agreed with bowman,
Hey Pooooooooh, now you are going out of the way, if u want respect from others then first you have to respect the others, as I already told you when u first came in into this topic, If you have any reservations, then discuss all these in professional manner, don't act like a child, otherwise we can report to the Admin for the behaviour which you have shown recently.
so please be careful in future.

S M R

Pervez · 09-15-2003, 08:28 AM

Thanks fellows for the your kind words.
What can i say!!! As you know my objective for being on this board
is to share some of the experiences that i have gained over the years in the field of accounting, specially , working abroad.I was hoping that this will add interseting prespective for new and seasoned accountants on this site.
It is NOT my objective to pick fights with young and new entrants in the field. I have bigger battles to fight and bigger fishes to fry.
My main competition in last number of years come from white(mostly Jewsih) accountants in north america. Specially the Jewish accounting/financial people who are standard bearer of professionalism in North America. No matter how much we disgree with them, i will have to admit that as a group i have not seen such professional anywhere else in the world. So you can see i play in a different arena.

I also understand the frustration of angry young men (mostly in 20s).
I was one of them at some time in the past. This is an age where you are new in practical life. The first person that you run into trouble is the mean spirited partner at your firm. And you began to wonder why he dislike you so much. What have you done wrong to deserve this treatment! This encounter can give scars that affect other parts of your life. I wish we have some counselling at this stage. In developed countries they provide this service, where professionals help young people to cope with teething problems of life. I hope one day we will be able to do this in our country.

I just want to let you friends know that i don't draw any income from Pakistan. My contribution on this board is a way to give back some of what i receieved from my country of birth. I will continue to do so as long as possible.

Thank you for your attention and we will meet again i promise you that.

Take Care
<img src=icon_smile_cool.gif border=0 align=middle><img src=icon_smile_cool.gif border=0 align=middle><img src=icon_smile_cool.gif border=0 align=middle>

Edited by - Pervez on Sep 15 2003 033509 AM

smraza · 09-16-2003, 12:16 AM

Dear Pervez,
I want some guidance on a matter regarding qualification in audit report,
the case is that the company obtained a loan from a bank, which was restuctured two years back, and the markup was freezed by the bank, but the company made default in making payment to the bank, now today,
the bank is still showing the same markup (frozen) in books of accounts, and auditor receives the confirmation from bank which shows the mark up up to today's balance sheet date. the company doesnt provide the addtional mark up in it books, on the contention that they will negotiate with the bank and will not pay the mark up additional to the frozen mark up, but in auditor's opinion said markup should be provided in books of accounts.
Now if the company agrees to disclose the figure of additional mark up which is not provided in accounts, and also discloses the same "claims not acknowledged as debt" under the head "Contingencie", then what is the auditor's liability in this respect.
Whether he should qualify the report for underprovison of markup, or he can insert a matter of emphasis without qualifying his opinion and referring said issue in notes to the financial statments????

S M R

Pervez · 09-16-2003, 11:56 AM

Dear Raza!

The prime facia evidence in this situation is the agreement that the client signed at the time of restructing. Generally, these agreements provide for additional mark up once the client defaults on the loan payments. In any event, you stated that the auditor is of the opinion that the additional mark up should be accrued in the company books.
After revewing the restructuring agreement, if auditor still holds the opinion that accrual is requied. Then he should determine the materiality of the amount involved. (i don't need to go into mechanics of this excercise as we do this on fairly regular basis).

If auditor determines that amount is material, then non accrual of it will be a DEPARTURE FROM GAAPs. Non recognition of liability is a clear departure from GAAPs.

The next step auditor has to take is to determine whether the departure
(a) does not impair the overall usefulness of the F/S to the reader
(b) departure can be explained so that the reader is in a position to
----assess the impact of it on the F/S.
If the answer to both the above questions are YES, then the auditor has to qualify the report. Qualifying the report means an overall positive report with an except for paragraph explaining what the departure is and what its effects are on the F/S.

However, if the auditor is of the opinion that F/S are not presented fairly in accordance with GAAPs to the extent that they are misleading or virtually useless to the reader when read in conjunction with auditor's report, then he should express an adverse opinion.

In my opinion, the liability is not contingent but factual. It is born out of the restructing agreement. The only time we can mention it in the notes is when the agreement specifically prohibits the bank from accruing additional mark up in case of default by the borrower.
In such a case, bank's claim of additional mark up becomes disputed and the co has fairly good chance of denying these claims.

I hope this claifies the situation for you. Don't hestitate to ask if you need further clarification.

Take Care

Edited by - Pervez on Sep 16 2003 070141 AM

smraza · 09-16-2003, 07:50 PM

Thanx Pervez,
I need little bit more clarification,
the company's contention about the said matter is that they will fight with the bank for waiver of additional mark up, and they are confident that the matter will be decided in company's favour, thats why they are treating the said amount as contingent liability,
and further they say that it will not effect the usefulness of the financial statements as they are disclosing the figure, which is obviously a material figure, in the financial statements that they have not provided the mark up in the accounts amounting to Rs. so and so, to enable the reader to compute the profit after the accrual of said markup,
but the auditor says, as the mark up relates to previous and current financial period, and it is factual not contingent, so it would have been charged in the accounts.
The agreement is silent about the markup in case of further default on part of the company.
But generally, if the company has defaulted in making payment on due time, it means it has utilized the funds for further 2 years, so it must provide the mark up in books of accounts,
now back to my confusion,
I agree if the company neither provides the markup nor make any disclosure regarding under provision of markup, the auditor must qualify the report.
but if the company doesnt provide mark up but discloses the total financial effect and related disclosures regarding matters thereof, Can auditor just put a matter of emphasis in his report without qualifying his opinion.

S M R

Edited by - smraza on Sep 16 2003 33508 PM

Pervez · 09-17-2003, 09:52 AM

Hi Raza!
I am surprised that the agreement is silent on the issue. You will agree with me that it is sloppy work by law department of the bank. They should have envisaged this possibility and binded the borrower more firmly.
Anyway, if you consider management's viewpoint a bit more closely, you will see that they are trapping themselves. By asserting that they will get a "waiver" they are implicitly accepting the right of the bank to raise additional mark up. The question arises how can any body waive a right that it does not have? Example if i owe you Rs 100 and fail to pay it back, you can only waive your right to receive RS 100 right. You cann't forgive what you are not owed.
Waiving is setting aside of a right. Therefore, the management is actually acknowledging an actual liability.
Now there are procedures that you can use to verify the above situation. Ask the client to provide all communications that they have with the bank (i am sure you have already done that). Any letters,minutes of meeting, telephone conversations etc. Although, i have not seen any of this stuff, i can assure you that there are only two stands that the compnay can take under these conditions

(A) Deny the right of bank to accrue any mark up. Telling the bank to take a hike. Let the bank go to court to prove its entitlement to additional mark up.

(B) Admitting the right of the bank for additional mark up and requesting a waiver on hardship ground.

Go through the communications and let me know if they have a third take on the situation.

In case A, we can describe the liability as contingnet (disputed and depending upon the court decision). But in case B, it is open and shut case of actual liability.

Now i am sure your client will not like to hear this. We as accountants are paid not for bringing the problems, but for solving them.

So here is my solution that will, hopefully, help you to retain the client as well as meeting the requirements of GAAPs.

We can convince the client to make the accrual for additional mark up
(put some fear of GOD and SECP into their hearts) and give them a note for CONTINGENT GAINS RATHER THAN CONTINGENT LIABILITY. As you know, we cann't accrue contingent gains and can only provide a note.

After determing the likehood of success of waiver, you can state in the note that the co is very likely to obtain the reduction in additional mark up. You have to estimate the amount as well. This way, the reader will know the existence of liability as well the likehood of its waiver. I hope this is the win-win situation for you and the client.

And don't worry about my bill, i may ask you to do some assignments for me in Pakistan (an accountant's poor attemp to be funny!!!)

Take care

Edited by - Pervez on Sep 17 2003 050331 AM

Edited by - Pervez on Sep 17 2003 052236 AM

smraza · 09-17-2003, 03:25 PM

Thanx Pervez,
I finally sent my draft report to the client inserting the qualification on such matter, and now they agreed to provide the mark up in books<img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>
<BLOCKQUOTE id=quote>quote<hr height=1 noshade id=quote>put some fear of GOD and SECP into their hearts<hr height=1 noshade id=quote></BLOCKQUOTE id=quote> I already did that, but client says, fear of GOD is ok, but why should we afraid of SECP as SECP is not gonna ask us, it will just write you a letter for not qualifying the report <img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>
as far as billing is concerned do u accept credit card ?? <img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>

S M R

Pervez · 09-17-2003, 08:21 PM

Hi Raza!
Good work Gumshoe(this was a character from children's spy program).
<img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>.

Do you all use credit cards in Pakistan!!! I can bet Guybrush is going to accuse me of snobbery. <img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>

You know why client is saying that SECP wouldn't come after them, becasue they have been reading your postings on this baord. So they know SECP is against CAs and not against the companies.!!!<img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>

Take Care
<img src=icon_smile_cool.gif border=0 align=middle><img src=icon_smile_cool.gif border=0 align=middle><img src=icon_smile_cool.gif border=0 align=middle>

smraza · 09-17-2003, 08:44 PM

<BLOCKQUOTE id=quote>quote<hr height=1 noshade id=quote>
You know why client is saying that SECP wouldn't come after them, becasue they have been reading your postings on this baord. So they know SECP is against CAs and not against the companies.!!!<img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>
<hr height=1 noshade id=quote></BLOCKQUOTE id=quote> <img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle><img src=icon_smile_big.gif border=0 align=middle>
Pervez, it is the fact in pakistan, and the client was telling its personal experience <img src=icon_smile_cool.gif border=0 align=middle><img src=icon_smile_cool.gif border=0 align=middle><img src=icon_smile_cool.gif border=0 align=middle>

S M R

alizain · 09-21-2006, 03:07 PM

Hi everyone
This thread is really interesting. I think SECP is finally taking some actions that improves corporate governance. Why this thread is SECP VS Chartered Accountant?
The answer is that SECP and Govt has made a mistake by making auditing a monopoly of ICAP members. The scenario is different in other countries. The discriminatory law is the major factor that degrades the quality of the profession of Auditing. All professions are about quality and only the best professional prevails. I think it is the time that Govt should correct this mistake.

It only Toyota models are allowed to be sold in the market in the market and Toyota dealers are competing then what makes to you think that quality will not degrade. If Toyota has the best quality then it should not need any legal protection to survive in the market and specially Govt should not give legal protection to one brand.

CBPian · 09-24-2006, 07:05 AM

It has been a while since I last visited this thread but finally positive vibes....SECP is taking some actions against Crescent.. ??? But what? notice for winding up the bank... so who is going to hurt when the bank has negative equity.. the poor depositors and investors.. and what about the big guns... I think it is now time to put the big families ruining our country out of business.... reading the SECP notice.. a bank gave 100m loan to CSIBL/owners for investing in stock... this is very funny ..investment bank taking loan to invest in stock..