On Policy Initiatives taken by the Institute

PRESIDENT’SUPDATE

Institute of Cost and ManagementAccountants of Pakistan

Volume 1.7 | September 2017

Local and Global Recognition

Visit of World Bank Team to ICMA PakistanA World Bank Mission visited Pakistan from August 15 to 18, 2017 under the aegis of the Pakistan Trade and Investment Policy Program(PTIPP) which was headed by Ms. Nadia Rocha, Senior Economist WB. The Mission’s objective was to consult public and private sectorsto assess the regulatory framework governing the services sector, with a focus also on accounting and auditing services. The WB teamintended to identify areas requiring regulatory action as well as streamlining regulatory restrictions.

The World Bank team, comprising of Mr. Sebastian Saez, Lead Economist and Mr. Martin Molinuevo, Senior Economist also visited theIslamabad Campus for meeting with President, ICMA Pakistan to seek ICMA Pakistan’s input on its regulatory role and requirements forservice providers and foreign investors to enter the management accounting profession, in addition to key constraints to growth.

The World Bank team was briefed about the Institutes’ role, functions, curriculum and coaching and examination methodologies andcontribution of its members towards growth of industry and economy. Institute’s viewpoint and stand on bringing regulatory reforms inthe accounting and auditing profession as well as SWOT analysis on existing regulatory framework was also presented to the WB team.It was suggested that the World Bank may associate CMA’s in all its funded projects in Pakistan for costing evaluation and control as wellas managing efficient use of resource and funds. The World Bank team assured to consider the viewpoints of ICMA Pakistan for inclusionin its Report.

Advance level MRA with CPA IrelandIn my earlier Update, I had mentioned that CPA Ireland has been formally requested along with all details and course mapping to provideexemption in corporate reporting course. The Secretariat kept constant liaison with CPA Ireland and finally it was mutually agreed that ahigh level meeting between the leadership of CPA Ireland and ICMA Pakistan’s NC members may be arranged in the month of September,2017 to discuss this agenda. In this connection, I had a planned travel schedule to Ireland for meeting with CPA Ireland, however, due tomy pressing engagements, I could not proceed. Now, this meeting will be held through video-conferencing. It is hoped that soon ourmembers will get the news for advance level exemptions from CPA Ireland.

Collaboration with CPA CanadaThe Institute is in constant touch with Chartered Professional Accountant (CPA) Canada to negotiate better reciprocal exemptionsarrangements. The National Council in its recent meeting has constituted a 3-member Committee headed by Mr. Waqar Ali Khan, Member,National Council and comprising of Mr. Rauf Ali Jan, ACMA and Mr. Muhammad Mehmood Ahmed, ACMA: to continue negotiations withCPA Canada.

Collaboration with IMA USAIn pursuance of continuous interactions, the IMA USA has forwarded a proposal for mutual recognition agreement. This proposal ispresently under active consideration of the relevant Directorate/Committee and the members shall be apprised as soon as a decision istaken by the Council.

Advance Level MRA with ACCA-UKThe Institute is making efforts for early settlement of membership pathway arrangements with ACCA. The Institute has of late exchangedsyllabus comparison with ACCA for MRA consideration. The ACCA has offered their membership pathway to ICMA Pakistan members andhas desired that ACCA members be also given consideration on reciprocal basis.

The ACCA offer is presently at the advanced level and under active consideration of the National Council. The Council of the Institutehas already authorized President and Honorary Secretary to negotiate and sign MRA with ACCA. In the meantime, I would like ourworthy members to share their valuable comments on the matter of signing MRA with ACCA for Council’s consideration.

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ICMA Pakistan’s budget proposal on CMAs rights under Section 176 of ITO accepted by FBRThe Federal Board of Revenue (FBR) has considered one of the budget proposals of the Institute by allowing the cost and managementaccountants to conduct income tax audit of businesses. In this context, FBR has issued a Circular no. 4 of 2017 dated 6th September, 2017through which under serial # 36 it has clarified that ‘now a firm of “Cost and Management Accountant’’ is also empowered to enterbusiness premises’.

I may mention here that the Institute drew the attention of FBR and Ministry of Finance towards this anomaly in the Income Tax Ordinance2001 which allowed only CAs and restricted CMAs to enter the business premises of a tax payer for tax audit purpose under Section 176of ITO, 2001.

This is an emerging opportunity especially for our practicing members and I hope that they would now take lead in approaching the FBRfor registration under Section 176 of ITO, 2001 for tax audit of businesses.

Best Corporate & Sustainability Report 2016 Awards CeremonyThe Best Corporate and Sustainability Awards (BCSRA) ceremony was jointly organized by ICAP and ICMA Pakistan on 25th August 2017at a local hotel in Karachi which was graced by Mr. Mohammad Zubair, Governor Sindh as Chief Guest. A special report of BCSRA is alreadyhosted on Institute’s website, hence need does not arise here to repeat the information. I would only confine to my welcome addressin which I unequivocally raised the voice about the dire need for establishing a Financial Reporting Council outside the accounting profession,to regulate the auditing profession in Pakistan and to ensure protection of interests of all stakeholders. The audience comprisingof CEOs, CFOs, CAs and senior financial officials of award winning companies seems quite receptive to this proposal.

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SAFA Board MeetingThe 48th SAFA Board meeting was held on August 29, 2017 at Kathmandu, Nepal. ICMA Pakistan’s representatives attended the meetingthrough video-link from Pakistan.

Admission Targets and AchievementThe Secretariat is making concerted efforts to increase the admission graph. The centre-wise comparison of actual admissions vs. budgettargets for FALL 2017 admission as well as Centre-wise percentage achievement of admission targets are depicted in the below graphicalpresentation:

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Admissions, Education and Examination

Incentive Package for Employed IndividualsThe Council of the Institute announced a lucrative incentive package for those employed individuals who are aspiring to pursue and earn theirCMA qualification along with employment. The eligible individuals would be offered 90% waiver in admission fee for a course/level in additionto complete exemption from attending regular classes. The individual can avail this incentive subject to certain conditions such as compulsorysubmission of service continuity letter each time to appear in examination [duly signed & stamped by the employer] and cancellation ofenrolment and declaring all previous results null and void in case submitted documents by any student are found to be not genuine and authentic.The details are available on website.

The above incentive signifies a humble attempt by the Institute to encourage hard working employed individuals and to provide them anexcellent opportunity to earn CMA degree without discontinuing their jobs. With the success of this program, the Institute expects to meetthe increasing demand for professional management accountants in the corporate sector. We have received a good feedback from the corporatesector as well as from our members on this new initiative. It has been communicated by some working students that this would help them tocontinue studies along with their professional commitment. Hence, this program is also designed to facilitate working students, in addition tothe employed individuals. I urge upon our members to provide some input and suggestions to further improve incentive package.

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Governance and Operational Affairs

Results of Professional Competence Level-07 ExaminationsThe results of Professional Competence Level-07 Examinations were announced by the Examination Committee on June 24, 2017. These resultswere ratified by the Council in its 356th meeting held on June 30, 2017.

Computer Based Examination (CBE)The Computer Based Examination (CBE) for all six courses of Fundamental Level (FL) has been announced to be held from 23rd September,2017 to 10th October, 2017 at all ICMA Pakistan’s Centres. In this connection, the Examination Department has also issued the Guidelines forexaminees.

Professional Competence Level – 08 ExaminationsThe Professional Competence Level – 08 Examinations are scheduled to be held on 11th October, 2017 to 17th October, 2017 in four modulesi.e. Business Accounting; Business Finance; Business Laws & Ethics and Business Management and Leadership. The Examination Departmenthas already issued the schedule of examination and Guidelines for examinees for PCL examination.

Constitution of International Affairs Committee (IAC)The Council of the Institute has approved a proposal for constituting an ‘International Affairs Committee (IAC)’ headed by the Vice Presidentof Institute for streamlining the International Affairs Department and enhancing interaction and linkages with international organizationsincluding IFAC, CAPA, SAFA etc. The Vice President has been authorized by Council to nominate four other members of the Institute asmembers of IAC.

In this context, the Council also approved establishment of an independent International Affairs Department [IAD] in the Secretariat byseparating Members and International Affairs Department. The Secretariat is presently in process of finalizing ancillary arrangements toimplement the decision and to operationalize International Affairs Committee [IAC] and International Affairs Department [IAD].

Formation of Examination Quality Assurance Board (EQAB)The Council of the Institute has approved the formation of an ‘Examination Quality Assurance Board (EQAB) to act as an independentbody for ensuring quality in examinations. At present, the modalities and structure as well as composition of proposed EQAB are underconsideration of the Council. The President has been authorized by the Council to nominate members on the proposed Board.

Introduction of 5-days working week in InstituteKeeping in view the cost saving measures, prevailing financial circumstances of the Institute and complying with the practice of governmentsector, the Council has approved a 5-days working week. The Institute’s timings will now be from 9 am to 6 pm from Monday to Thursdayswith 1 pm to 2 pm lunch & Zohar break; and from 9 am to 6 pm on Friday with Lunch & Friday prayer break from 1 pm to 3 pm. Theeducation activities/ coaching classes of nationwide campuses will be adjusted on 05-days working week basis.

Quality Assurance BoardThe Council has nominated Mr. Mehboob Hussain, F-1127 as Chairman on Quality Assurance Board for further three years and requestedto suggest members on the board. The Council has further authorized the President to nominate chairmen on the remaining boards andextended its tenure for further three years.

Staff PromotionsThe Council has also approved promotion of few employees on the recommendations of Executive Committee. These promotions aresubject to performance evaluation after three month for confirmation as per the recommendation of Executive Committee.

Print and Social Media Marketing CampaignThe Institute has launched an aggressive print and social media marketing campaign to highlight how the Institute and its qualified memberscan play a significant role towards providing business solutions to the corporate sector and industry. The marketing campaign also addresseschallenges faced by the profession of management accounting in Pakistan and through series of articles of the President ICMA Pakistanin the news papers; the attention of government and regulators have been drawn towards their responsibility for improving the accountingand auditing regulatory framework in the country.

One of my articles on the topic of “Auditors Role in Public Goods’ was published in the ‘Business and Finance Weekly’ of Daily Dawn of26th June, 2017. Another article titled ‘Flawed Audit Oversight System in Pakistan’ was published in Daily Express Tribune in two partson two Sundays i.e. 10th September and 17th September 2017 respectively. The readers have given overwhelming response which canbe gauged from the fact that the article has been electronically shared by over 300 readers [as per Express Tribune website]

Institute’s Branding and Image building

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Professional Development Services

On the social media, advertisements on CMA role and skills-set are being projected and boost up electronically by using the latest toolsof digital marketing. The response is quite encouraging and we are not only getting queries from aspiring students but also from thecorporate sector for placements.

Infographic VideoThe Infographic video depicting the Institute’s profile, activities, role and other relevant information has been developed and presentlyin final phase of editing and refinement. This Infographic video would replace the old power point presentation which was previously usedduring dignitary visits, corporate meetings, events etc.

Stakeholders ‘Conference on Corporate Governance RegulationsThe Securities and Exchange Commission of Pakistan (SECP) has notified for public comments a draft Listed Companies (Code of CorporateGovernance) Regulations, 2017, under the newly promulgated Companies Act, 2017. Considering the significance of this legislation, theInstitute issued a circular to its members for providing inputs and comments on draft regulations. At the same time, SECP was sent awritten request for extending the deadline for submission of comments as it was circulated by them only one day before Eid holidays and14 days was provided after which the legislation would become effective.

The Institute has, in the meanwhile, furnished its provisional comments to the SECP on 14th September 2017. Subsequently, on therecommendation of ICMA Pakistan and other stakeholders, the SECP issued a notification on September 15, 2017 for extending deadlinefor providing comments to 30th September, 2017.

The Institute has decided to organize a series ‘Stakeholders Conferences’ on draft regulations in Karachi, Lahore and Islamabad to elicitviews of all stakeholders for submission of final recommendations to the SECP. In this regard, the first stakeholders’ conference has beenplanned at Karachi on 25rd September, 2017 whereas the second Conference is scheduled on 26th September, 2017 at Lahore.

Training series on BankingThe Banking Training and Technical Advisory Board of ICMA Pakistan (BTTAB) of ICMA Pakistan, jointly with Dellsons Associates is organizinga series of trainings on Banking. In this connection, the first training on ‘The Dynamics of Foreign Exchange & Banking’ is scheduled tobe held on September 23, 2017 at Karachi. The second training will be held on October 7, 2017 at Karachi on ‘Information Security andManagement’, whereas the third training series on ‘Corporate Governance’ will be held on November 18, 2017 at Karachi.

Directors Training ProgramsThe Institute organized the 13th Directors’ Training Program (DTP) on July 21 to 29, 2017 at PC hotel, Lahore which was attended by twentyparticipants from public and private listed companies. During the training, they were given exposure about Corporate law, SustainabilityReporting, Code of Corporate Governance, Board Responsibilities & Ethics, Board Strategy and Risk Management, Board Composition &CEO performance etc. The trainers were Mr. Mohammad Rafi; Mr. Saeed A. Shaikh; Mr. Ale Imran and Syed Ahmed Ashraf. The President,ICMA Pakistan was also the Guest Speaker and shared his experience on board matters.

The 14th Directors Training Program will be held on 6th & 7th and 12th to 14th October, 2017 at Faisalabad. I would urge upon ourmembers residing in Faisalabad and adjoining cities to actively participate in DTP.

GMAC at DubaiThe Global Management Accountants Conference (GMAC) which was scheduled for 16th September, 2017 at Dubai, U.A.E., has beenrescheduled on the requests of Dubai-based members of ICMA Pakistan and it will now be held on 4th November, 2017 at PakistanAuditorium, Dubai. This will be the first international venture of the Institute and I expect and hope that our members will make this megaevent a resounding success through their active participation. The members are also encouraged to publicize this event to their foreigncolleagues.

Model Quality control procedures for practicing firmsThe Quality Assurance Board (QAB) of ICMA Pakistan has developed the Model Quality Control Procedures and ISQC-1 implementationGuide in order to facilitate the CMA Firms to implement the same in their practice and offices. In addition, QAB has also prepared draftQuality Control Review Checklist for Cost Audit Engagements.

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Members’ Subscription and Welfare

Enhancement in Insurance Coverage for MembersThe National Council has approved enhancement of insurance coverage for the members from Rs. 1 million to Rs.1.5 million in case ofnatural death and Rs. 2 million to Rs.3 million in case of accidental death. It has been decided that this insurance coverage package wouldbe applicable only to active members who will clear all their outstanding dues to the Institute.

Discount for Members at Shaukat Khanum Memorial HospitalThe Members’ Welfare, Career Development and Students Affairs Committee of the Institute has signed a Memorandum of Understandingwith Shaukat Khanum Memorial Hospital (SKMH) & Research Centre whereby SKMH has offered 10% discount to members and employeesof ICMA Pakistan including pathology, radiology, nuclear medicine, OPD, Chemo, Radiation, and Hospitalization (the services).

Mohammad Iqbal Ghori, FCMAPresident, ICMA Pakistan