Institute of Cost and Management Accountants of Pakistan
Member | Established: 1951 | Member since 1977
ICMAP was established in 1951 and was granted statutory status under the Cost and Management Accountants Act of 1966 to regulate Cost and Management Accountants in Pakistan. ICMAP is a professional body for Cost and Management Accountants in Pakistan and its responsibilities include administering the Cost and Management program and establishing initial professional development and continuing professional development requirements for its members, setting ethical requirements, and establishing a QA and I&D system to monitor its members. ICMAP awards the Associate Cost and Management Accountant and Fellow Cost and Management Accountant designations. Under the Companies Ordinance of 1984, certain manufacturing industries in Pakistan are to be audited by individuals who are both members of ICMAP and the Institute of Chartered Accountants of Pakistan. In addition to being a member of IFAC, ICMAP is a member of Confederation of Asian and Pacific Accountants and South Asian Federation of Accountants.
Statements of Membership Obligation (SMO)
The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.
SMO 1: Quality Assurance
Under the Chartered Accountants Ordinance of 1961, the Institute of Chartered Accountants of Pakistan (ICAP) is responsible for establishing a mandatory quality assurance (QA) review system of all firms carrying out statutory audits of financial statements. ICMAP is not responsible for the quality assurance (QA) reviews of statutory audits in Pakistan; however, the institute has established a QA review system to review audit work conducted by cost audit professionals and cost audit firms.
The Quality Control Review (QCR) program has been in operation since 2014 and requires compliance with all relevant rules and regulations as established in ICMAP’s Cost Audit Handbook. Firms are reviewed every three years by selected reviewers chosen from the Technical Support and Practice Development Committee (TSPD Committee) and the Quality Control Department (QCD), which operate under the oversight of an ICMAP established Quality Assurance Board (QAB). Recommendations from the TSPD Committee and the QCD are submitted to the QAB for approval before a firm is given a rating and permitted to conduct cost audit services. ICMAP indicates that in total five firms have been reviewed since its inception and that participation in the QCR program is not mandatory.
ICMAP reports that a review of its QCR program was conducted in 2016, which identified that it fulfilled a majority of the requirements of SMO 1. As the QCR program is optional and does not cover the review of statutory audits, ICMAP notes that the areas where gaps exist pertain to the fact that the system is not mandatory and it does not apply for all audits of financial statements.
To support its members, ICMAP indicates that trainings and seminars are offered on quality assurance topics in order to enhance members’ understanding of the relevant standards and processes. These courses are offered as part of the institute’s continuing professional development program.
SMO 2: International Education Standards
All three professional accountancy organizations in Pakistan have established initial professional development (IPD) and continuing professional development (CPD) requirements for its respective students and members. At the time of this assessment, ICMAP’s Cost and Management Accountants Program incorporates the revised 2015 IES.
ICMAP states that it offers both on-site and online courses for students and ensures high-quality courses by establishing teaching standards and authorized ICMAP Centers throughout Pakistan. ICMAP indicates that this has encouraged mutual recognition agreements with other foreign institutes.
ICMAP reports that its National CPD, Seminars, and Conferences Committee was established to oversee all aspects of CPD provided by the institute. The institute indicates that CPD is offered on a regular basis around the country, and members can submit their CPD declaration via the institute’s website.
SMO 3: International Standards on Auditing
Under the Companies Act of 2017 (formerly Companies Ordinance of 1984), all companies in Pakistan are required to be undergo statutory audits using standards adopted by the Institute of Chartered Accountants of Pakistan (ICAP) under the supervision of the independent Audit Oversight Board.
ICMAP is not responsible for the adoption of auditing standards to be applied in statutory audits. The institute, however, states that it supports the Securities and Exchange Commission of Pakistan (SECP) and the Institute of Chartered Accountants of Pakistan in the standard-setting process and it supports members who conduct statutory audits by disseminating pronouncements issued by the IAASB on a monthly basis, and includes ISA related material in its initial professional development and continuing professional development program. In addition, the institute reports that it has organized a series of conferences related to the draft Companies Bill of 2016 to collect input from members to share with the SECP.
Under the Companies Ordinance, ICMAP members are responsible for conducting cost audits of certain manufacturing industries in Pakistan, and the institute has developed a Cost Audit Handbook, first published in 2001 and last updated in 2008, that contains rules and guidelines to follow when conducting cost audits. The Handbook contains checklists for members to utilize when conducting audits and also contains manufacturing flow charts of the various manufacturing industries to guide its members.
SMO 4: Code of Ethics for Professional Accountants
All three professional accountancy organizations in Pakistan have established ethical requirements for their respective members. PIPFA’s Bye-Laws establish PIPFA’s responsibility to adopt a Code of Ethics for its members. ICMAP is directly responsible for setting ethical requirements for its members and reports that it has adopted the 2018 International Code of Ethics.
ICMAP has included elements of ethics in various sections of its syllabus to support its students’ understanding of ethical requirements. The institute also reports that continuing professional development on ethical and quality control requirements are offered through regular seminars and workshops.
SMO 5: International Public Sector Accounting Standards
The 1973 Constitution of Pakistan authorizes the Auditor General of Pakistan to set public sector accounting standards in the jurisdiction. As reported by PIPFA, Pakistan’s national public sector accounting standards are cash-basis and are developed based on the 2003 version of the IPSAS.
While ICMAP has no responsibility to adopt public sector accounting standards in Pakistan, the institute reports that it is cooperating with the Institute of Chartered Accountants of Pakistan and the Pakistan Institute of Public Finance Accountants to promote the adoption of IPSAS to the Accountant General of Pakistan and the Auditor General’s Office.
ICMAP reports that it keeps its members informed about new and revised pronouncements issued by the IPSASB through technical updates disseminated by the Technical Directorate of ICMAP. In addition, the institute has signed a memorandum of understanding (MoU) with the Association of Chartered Certified Accountants (ACCA) to launch a certification course on IPSAS. Furthermore, in collaboration with ACCA, ICMAP organized two seminars on “Drivers for Change in the Public Sector” to promote IPSAS within Pakistan. The institute also organized a separate Conference on Public Sector Accounting to improve the quality of public sector accounting, especially in regards to disclosure, transparency, and corporate governance. ICMAP also responds to exposure drafts issued by the IPSASB.
SMO 6: Investigation and Discipline
All three PAOs are responsible for establishing an investigative and disciplinary (I&D) system for their respective segments of professional accountants in Pakistan. Under the Cost and Management Accountants Act of 1966, ICMAP is responsible for establishing an investigative and disciplinary (I&D) system for its members and has developed a system that incorporates SMO 6 requirements.
ICMAP’s Disciplinary Committee is empowered by the CMA Act of 1996 and ICMAP’s National Council to conduct all investigations and to review all complaints made. The National Council is ultimately responsible for either dismissing the complaint or handing out sanctions. In cases where a member has been sanctioned with a suspension or an expulsion from the institute, the Council will report and publish the decision in the local gazette. The institute reports that between 2015 and 2019, it has investigated a total of ten disciplinary cases.
To ensure that members are kept up to date on ethical and quality control requirements, ICMAP reports that it regularly conducts seminars and workshops on the relevant standards.
SMO 7: International Financial Reporting Standards
The Companies Act of 2017 (formerly Companies Ordinance of 1984) sets out accounting and financial reporting requirements for all companies in Pakistan. The Securities and Exchange Commission of Pakistan is responsible for adopting accounting standards in Pakistan and has delegated this responsibility to the Institute of Chartered Accountants of Pakistan (ICAP).
ICMAP is not responsible for setting accounting standards in Pakistan; however, it is active in supporting the Securities and Exchange Commission of Pakistan and the Institute of Chartered Accountants of Pakistan in the standard-setting process and supporting the implementation of IFRS. To this effect, it has launched a Diploma on IFRS for its members with the objective of improving the competency of local professionals and their understanding of globally accepted standards.
ICMAP reports that it has incorporated material on IFRS in various stages of its initial professional development program, and also organizes regular seminars and workshops on the applicability of IFRS in the country as part of its continuing professional development program. The institute states that it informs members of new and update pronouncements issued by the IASB through the ICMAP magazine and website and that it conducted a survey of its members on the “Impact of IFRS Application on Management Accounting Concepts/Principles”.