Pakistan Institute of Public Finance Accountants
Member | Established: 1993 | Associate since 1996
PIPFA was established in 1993, under Section 42 of the Companies Ordinance 1984 and is licensed by the Securities and Exchange Commission of Pakistan. PIPFA’s responsibilities include setting initial and continuing professional development requirements, ethical requirements, and establishing an I&D system for all public finance accountants. Members of PIPFA are awarded the Associate Public Finance Accountants or Fellow Public Finance Accountants designation. PIPFA is a Member of IFAC.
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. Although PIPFA does not have responsibility in establishing mandatory QA reviews, it reports that it actively evaluates ways to work with the ICAP to support QA reviews of auditors in Pakistan.
To further develop its members’ awareness of auditing standards and quality control, PIPFA reports that it has developed continuing professional development (CPD) in the form of seminars and workshops for its members on the ICAP’s Quality Control Review framework, and also on ISQC 1. These subjects are also incorporated within PIPFA’s curriculum. PIPFA highlights that even though it does not have responsibility to establish QA or adopt auditing standards, many of its members also pursue the qualification of Chartered Accountant and these initiatives help prepare them for that pathway.
Other activities by PIPFA to keep members and local regulators informed on quality control and enhance service quality include updates from the Technical Committee of PIPFA on developments by the IAASB and by IFAC in regards to SMO 1 via technical update emails, the main website, and the PIPFA journal.
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. Under Section 42 of the Companies Ordinance, PIPFA is responsible for establishing IPD and CPD requirements for its members and administering the Public Finance Accountant program in Pakistan. PIPFA reports that it has incorporated the 2015 revised IES into its overall programming.
PIPFA maintains various ongoing processes that ensures all aspects of its educational program, including its CPD, is continuously updated and in line with international requirements. PIPFA’s Board of Studies was established to oversee the functioning of the educational program.
PIPFA has developed various seminars and workshops that addresses public finance issues as well as topics around audit and ethics, as there are members of PIPFA who are also members of the other professional accountancy organizations in the jurisdiction or foreign organizations. Other educational methods for keeping its members and students up to date is the publication of updates in journals, newsletters, emails, and circulars. PIPFA has also begun arranging for its students to visit local organizations that employ public finance professionals to familiarize them with the work that is undertaken in public finance and to also provide an opportunity to interact with senior professionals.
PIPFA states it maintains a close collaborative relationship with the Chartered Institute of Public Finance and Accountancy (CIPFA) that has aided the development of its IPD and CPD program, and PIPFA reports that it is adding a Public Finance Management stream for its members that work in the public sector which allows them to earn the CIPFA Advance Diploma in International Public Finance Management.
PIPFA is encouraged to consider participating in the international standard-setting process by reviewing and responding to exposure drafts issued by the IAESB in order to share its experiences and perspective.
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. ICAP has adopted the revised 2016 ISA as issued by IAASB.
As PIPFA does not have legal authority to adopt auditing standards in Pakistan, it reports that it takes active steps to support implementation by ensuring its members and students are made aware of the standards as they are issued by both the IAASB and ICAP. PIPFA provides updates on the standards to its members and students via its newsletters, journals, and the PIPFA website. In addition, PIPFA has a Technical Committee in place to conduct research on pronouncements by the IAASB to prior to incorporating changes its syllabus and continuing professional development (CPD) content. PIPFA’s syllabus and CPD content includes topics related to audit and quality control as there members of PIPFA that aspire to become Chartered Accountants or who are already Chartered Accountants. PIPFA also encourages its members to attend CPD and workshops hosted by ICAP, the Institute of Cost and Management Accountants of Pakistan (ICMAP), and the Securities and Exchange Commission of Pakistan.
PIPFA is an active participant in the national and international standard-setting process. The institute reports that it reviews and provides feedback to the IAASB, and in addition, also provides comments to the ICAP as they set auditing standards in the jurisdiction.
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. The institute reports that it has adopted the 2016 IESBA Code of Ethics.
PIPFA states it proactively monitors updates and pronouncements by IESBA to ensure its initial professional development and continuing professional development (CPD) programs are up to date and include topics related to ethical requirements. Ethics is a separate subject in PIPFA’s syllabus.
CPD courses by PIPFA on ethics includes seminars and workshops, and also case studies that present conflicts and challenges to the professional. Other methods of information-sharing include providing updates in its newsletters, journals, and website.
With regards to standard-setting, PIPFA reports it provides comments to exposure drafts by communicating its position on issues to the Institute of Chartered Accountants of Pakistan.
PIPFA is encouraged to begin a review of the 2018 IESBA Code which is a significantly revised version of the entire Code and consider plans for its adoption and implementation.
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 in its 2018 SMO Action Plan, Pakistan’s national public sector accounting standards are cash-basis and are developed based on the 2003 version of the IPSAS.
For its part in regards to the adoption of relevant standards, PIPFA reports that it has held discussions with the Auditor General’s office on strategies to consider the full adoption of IPSAS in Pakistan. Other activities with the Auditor General include discussions on Disclosures in Financial Statements of Public Sector Entities and working with the Auditor General to monitor Public Sector Corporations in the country. To keep members up to date on IPSAS, PIPFA monitors new and amended IPSASB pronouncements, and disseminates them to members via journals and continuing professional development (CPD) programs.
PIPFA plays a key role in the implementation support aspect. PIPFA is the main training provider on national public sector standards and IPSAS to employees of the public sector, which include, the Auditor General’s office, Controller General of Accountants, Pakistan Military Accounts Department, Local Fund Audit, and Treasury Departments of the Punjab Government, National Highway Authority, Capital Development Authority, and Pakistan Railways Accounts Department. As PIPFA is the organization of public finance accountants, PIPFA’s Board of Governors also includes representation from the Auditor General’s office.
PIPFA maintains a close collaborative relationship with the Chartered Institute of Public Finance and Accountancy (CIPFA) that has aided the development of the initial professional development and CPD program, and PIPFA reports that it is adding a Public Finance Management stream for its members that work in the public sector that allows them to earn the CIPFA Advance Diploma in International Public Finance Management. PIPFA views this development as building the capacity of the public sector workforce in the jurisdiction.
Lastly, PIPFA reports it participates in the international standard-setting process by inviting members to review and respond to exposure drafts issued by the IPSASB.
PIPFA is encouraged to continue lobbying and promoting the adoption of IPSAS with key policymakers in the jurisdiction.
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. PIPFA’s Articles of Association, approved by the Security and Exchange Commission of Pakistan, authorizes PIPFA to establish an I&D system for its members and students. As of December 2018, PIPFA reports that its system is aligned with the requirements of SMO 6.
PIPFA actively promotes the importance of standards and ethics and the consequences of non-compliance through its initial professional development and continuing professional development content. PIPFA also conducts public outreach activities to its members on the consequences of non-compliance with the standards. For students of PIPFA, the institute publishes its rules and policies in career plans that all students receive and also in their examination entry cards.
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). In turn, ICAP has adopted IFRS except for IFRS 1 and 14.
Although PIPFA is not responsible for the adoption of accounting standards, it has taken an active approach to supporting implementation by ensuring its members are kept up to date on developments on national and global accounting standards. PIPFA reports that a Technical Committee is responsible for ensuring that matters related to national standards and IFRS are regularly reviewed for inclusion in the syllabus and continuing professional development (CPD) programs. CPD is delivered via online and offline courses and includes topics that cover updates to IFRS, implementation of IFRS, and other issues around corporate financial reporting. Other methods of updating members and students also include newsletters, journals, and website. PIPFA also encourages its students and members to attend CPD offered by other professional accountancy organizations operating in the jurisdiction.
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