Karachi, January 20, 2016 (PPI-OT): The SECP-ICAP joint committee finalized the audit oversight framework to establish an Audit Oversight Board (AOB), which will be operationally and financially independent of ICAP and SECP. Dr. Tariq Hassan, Advocate Supreme Court chaired sixth meeting of the SECP-ICAP joint committee at the ICAP Head Office, Karachi. The meeting was attended by Syed Shabbar Zaidi, Mr. Naeem Akhtar Sheikh, Mr. Asad Ali Shah and Mr. Shahid Hussain from ICAP and by Mr. Zafar Abdullah Commissioner, Ali Azeem Ikram Executive Director, Mr. Muzzaffar Ahmad Mirza Chief Prosecutor and Ms. Khalida Habib, Director from the SECP.
As per the agreed framework, the Quality Assurance Board (QAB) of the Institute of Chartered Accountants of Pakistan (ICAP) shall continue to perform quality reviews of statutory auditors of public interest companies. The Audit Oversight Board (AOB), to be established by the Federal Government, will oversee the functions of QAB.
It was further agreed that the AOB will also review the framework of QAB and may direct ICAP and/or QAB to make whatever changes that it considers necessary or expedient to carry out reviews and inspections of public interest companies in accordance with international standards and best practices.
An audit firm shall be entitled to be registered by AOB on the recommendation of QAB in accordance with the quality control review framework and AOB may require such further information as deemed necessary. All the firms having satisfactory rating at the time of promulgation of AOB law shall be deemed to be registered with AOB. It has further been agreed that the proposed board, which shall be operationally and financially independent of ICAP and SECP, shall also be empowered to deregister audit firms.
The Committee carried out a detailed study of the Japanese system of audit oversight framework, wherein the CPA Audit Oversight Board (CPAAOB), working under Japan’s Financial Services Authority (FSA) receives and examines reports of quality control review carried out by the Japanese Institute of CPA (JICPA) and, on the basis thereof, conducts onsite fieldwork at the JICPA, audit firms and related locations.
It may be pointed out that the Japanese system of audit oversight is compliant with the principles of International Forum of Independent Audit Regulators (IFIAR) and the International Organization of Securities Commissions (IOSCO). These principles have been referred to by the Committee as its guiding principles for achieving its TORs. The Committee is expected to submit report of its recommendations to the ICAP Council in two weeks’ time.
For more information, contact:
Shakil Ahmad Chaudhary
Head, Internal and External Communication
Securities and Exchange Commission of Pakistan (SECP)
NIC Building, 63 Jinnah Avenue, Islamabad
Tel: +92-51-9214005 or +92-51-9214009 (Ext. 378)