The Institute of Chartered Accountants of Pakistan (ICAP) was established on July 1, 1961 to regulate the profession of accountancy in the country. It is a statutory autonomous body established under the Chartered Accountants Ordinance 1961 along with the Bye-laws framed thereunder.
Over the years it has experienced phenomenal growth especially in the fields of professional standards compliance, provision of technical advisory service and continuing professional developments of its members besides continually ensuring adherence to professional ethics, attainment of highest standards in education and keeping pace with new challenges of the profession.
While the prime objective of ICAP is to regulate the Profession of Accountancy in Pakistan, the main objects of the Institute are: To advance the theory and practice of Accountancy in all aspects including auditing, financial management, taxation and management consultancy. To maintain high standards of professional conduct and ethics by all its members and students. To conduct examinations of candidates for the standardisation of level of competence required for the Profession
To recruit, train students and continuing professional education to members in auditing, financial management, taxation and management consultancy skills. Institute of Chartered Accountants is recognised as one of the prestigious institutes in the world.
The Institute is torch bearer of the profession of accountancy in Pakistan. It is the member of various international accountancy bodies such as the International Federation of Accountants (IFAC), Confederation of Asian and Pacific Accountants (CAPA) and South Asian Federation of Accountants (SAFA) and Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).
On national scene ICAP has played pivotal role in development of policy, laws, rules and regulation relating to trade, taxation, corporate and financial sector. Recognising its significant, the Federal Government and the Regulators continually engages the Institute and its members in consultative process on issues of national importance. The affairs of the Institute are managed by the Council which discharges the functions assigned to it under the Ordinance.
The Council is composed of 19 members, 15 members are elected from the profession by the members of the Institute and 4 are nominated by the Federal Government. The Council is elected for a term of 4 years. The ICAP President is the Chief Executive of the Institute. The Council also elects two Vice Presidents every year one each from Northern and Southern Region. The Council is assisted by the following standing committees besides various other committees:
1 The Executive Committee
2 The Examination Committee
3 The Investigation Committee
THREE OTHER KEY COMMITTEES ARE:
1. Professional Standards and Technical Advisory Committee
2. Quality Assurance Board
3. Education & Training Committee
The Council is also assisted by two Regional Committees - North and South, each of which comprises of 5 elected members.
MANAGEMENT OF THE INSTITUTE: The administrative head of the Institute is the Executive Director who functions under the directions of the Council. The Executive Director in performance of his functions is assisted by:
-- Executive Director
-- Secretary
-- Director Examinations
-- Director Technical Services
-- Director Professional Standards Compliance & Evaluation
-- Director Education & Training
-- Director Finance
-- Chairman Board of Studies
-- Regional Director North
The prime responsibilities of Executive Director include Personnel Management; Financial Management; Office Administration; Publications; Information Systems; conducting and performing secretarial functions for the Council and Executive Committee Meetings. Following is the Mission and Vision Statements of the Institute:
MISSION STATEMENT: "Our mission is to achieve excellence in professional competence; add value to businesses and economy; safeguard public interest; ensure ethical practices and good corporate governance; while recognising the needs of globalisation."
VISION STATEMENT: "The profession of Chartered Accountants in Pakistan should be the benchmark of professional excellence upholding the principles of integrity, transparency and accountability" Professionalism demands that proper standards of work are attained as well as maintained at all time.
For this, Institute has always kept itself abreast with the changes taking place around the world and has taken measures from time to time to enhance its capacities to cope with growing challenges. In this direction the Institute introduced program of Professional Standards Compliance in 1987 with primary objective to establish an appropriate quality assurance framework in respect of audit for financial statements conducted by members and members firms.
Today, Quality Control Review of a firm results in a rating that is designated either 'In accordance' or 'Not in accordance' with the requirements of international standards on auditing. All firms who achieve satisfactory rating are posted on ICAP's website thus making them eligible for carrying out audits of companies listed on Stock Exchanges of Pakistan.
Firms who fall short in attaining minimum standard to get satisfactory rating are helped and guided by the Institute to reach the requisite level. Now a Quality Assurance Board (QAB) has been formed with a substantial number of members being non-practicing accountants. Quality Control Review (QCR) arrangement is one of the pillars of the institutionalised arrangement for maintaining professional compliance.
Strict adherence to a professional ethics of code of conduct is essential for any profession. The Institute has adapted International Code of Professional Ethics issued by IFAC and it ensures compliance by its members. Regular reviews of the members' work take place under the aegis of Investigation Committee of the Council of the Institute. All infringements are thoroughly investigated before meting out punishment to defaulting members.
The Institute is very active in providing technical services to its members, firms and companies. In this field its work ranges from development of proposals for finance bill and corporate laws and review of various exposure drafts issued by IASB/IFAC to development of local accounting and auditing standards and technical releases relating to several issues.
The Institute also liaises with relevant government agencies to draw appropriate policies, laws, rules and regulations on corporate and technical accounting/auditing issues and proactively advocates adoption of international standards on accounting and auditing for implementation in Pakistan. In recent years it has also developed Islamic Financial Standard on Murabaha for Islamic Financial Institutions. The Institute is currently working on the development of standards/guidelines on Musharika, Diminishing Musharika, Profit and Loss sharing and NGOs etc.
A significant stride forward in which the government institutions played a key role was the development of Standards for Small and Medium Size Enterprises. This is a major step in the right direction and the Institute has taken lead in its development. It is expected that these Standards will bridge the gap that existed due to lack of expertise available in the SME sector and will help in documentation of the economy.
To keep pace with changing times and to ensure that our professional accountants are kept abreast with the developments taking place around the world, the Institute has made it mandatory for all the members to attend Continuing Professional Development program. Under this program, seminars, workshops and conferences are held during a year for keeping our members up to date.
Various speakers of repute are invited from the world over and from within the country to speak on variety of topics. Further considering the needs of the members, especially those in industry, the Institute has also started a series of publications called 'Members' Information and Education Series' (MIES).
INSTITUTE'S ROLE IN FRAMING ECONOMIC, FINANCIAL AND FISCAL POLICIES Institute has always played an active role in assisting the Federal and Provincial Governments in framing economic, financial and fiscal policies. Federal Government has demonstrated the importance and relevance of the Institute by nominating highest level government officials as the government nominees in the council. ICAP aims to expand its role in framing economic, financial and fiscal policies as a national service.
BUILDING CONFIDENCE IN PUBLIC FINANCIAL REPORTING: International events in the recent past have raised the issue of rebuilding confidence in public financial reporting and the International Federation of Accountants (IFAC) has released a detailed study on the matter. There is no direct evidence to suggest that circumstances and events in the west have correlation with conditions prevailing in our country, nevertheless, there is every reason for us to guard against complacency and ensure that similar situations do not arise here.
Institute's strategy in building of public confidence and trust is to adhere to international best practices taking into account the developments around the world retaining trust and confidence require adherence to sound ethical practices and the fear of an impartial disciplinary action in the cases of misconduct.