KARACHI: The Institute of Chartered Accountants of Pakistan (ICAP) has reviewed the discussions held during the Senate Standing Committee on Finance and Revenue’s session on June 17, 2025, regarding the Finance Bill 2025, relating to proposed insertion of Section 58C into the Sales Tax Act, 1990.
ICAP understands the Federal Board of Revenue (FBR) efforts to combat financial misstatements, which may be resulting in evasion of sales tax. However, ICAP explains that the Audit Oversight Board (AOB), proposed in the finance bill to conduct inspections of audit firms, may not be the appropriate forum, given its statutory mandate is limited to overseeing audit quality of Public Interest Companies (PICs) only under the SECP Act 1997.
ICAP proposes that being national regulators of audit profession and equipped with a robust investigation mechanism under the Chartered Accountants Ordinance, 1961, be designated to fulfil this oversight role. The Institute further explains that its existing Investigation Committee, constituted under the ICAP Bye-Laws 1983, comprised a reasonable number of independent members and a senior legal professional. ICAP reiterates its openness to including a nominee from FBR, AOB, or SECP on the Investigation Committee to enhance transparency.
It is also disclosed that over the past five years, many cases relating to complaints received from various regulatory bodies, including SECP, SBP, AOB, and FBR, have been processed under its investigation framework.
ICAP emphasizes the effectiveness of this system and informed that it annually publishes a comprehensive investigation report, the most recent of which was shared with members and public on March 13, 2025.
The Institute expresses its continued support for legislative and regulatory reform in the national interest and remains committed to strengthening professional accountability across the financial ecosystem but has a concern on the introduction of alternate inspection mechanisms which may not be productive and in line with international best practices.
KARACHI: The Institute of Chartered Accountants of Pakistan (ICAP) has reviewed the discussions held during the Senate Standing Committee on Finance and Revenue’s session on June 17, 2025, regarding the Finance Bill 2025, relating to proposed insertion of Section 58C into the Sales Tax Act, 1990.
ICAP understands the Federal Board of Revenue (FBR) efforts to combat financial misstatements, which may be resulting in evasion of sales tax. However, ICAP explains that the Audit Oversight Board (AOB), proposed in the finance bill to conduct inspections of audit firms, may not be the appropriate forum, given its statutory mandate is limited to overseeing audit quality of Public Interest Companies (PICs) only under the SECP Act 1997.
ICAP proposes that being national regulators of audit profession and equipped with a robust investigation mechanism under the Chartered Accountants Ordinance, 1961, be designated to fulfil this oversight role. The Institute further explains that its existing Investigation Committee, constituted under the ICAP Bye-Laws 1983, comprised a reasonable number of independent members and a senior legal professional. ICAP reiterates its openness to including a nominee from FBR, AOB, or SECP on the Investigation Committee to enhance transparency.
It is also disclosed that over the past five years, many cases relating to complaints received from various regulatory bodies, including SECP, SBP, AOB, and FBR, have been processed under its investigation framework.
ICAP emphasizes the effectiveness of this system and informed that it annually publishes a comprehensive investigation report, the most recent of which was shared with members and public on March 13, 2025.
The Institute expresses its continued support for legislative and regulatory reform in the national interest and remains committed to strengthening professional accountability across the financial ecosystem but has a concern on the introduction of alternate inspection mechanisms which may not be productive and in line with international best practices.
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