Title Covers Options-5 - ICMA

History of

Management AccountingProfession in Pakistan

Institute of Cost and ManagementAccountants of Pakistan

Estd. 1951

This book depicts milestones achieved, and progress made, by the Institute during the initial fifty-five years of its

establishment i.e., from 1951 to 2006.

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Published by:Research Department

Institute of Cost and Management Accountants of Pakistan

Dedication

This book is dedicated toMr. Mohammad Shoaib, the founder

President and the moving force behind theestablishment of the Institute. Hispioneering contributions for the

development of Cost and ManagementAccounting profession in the Sub-continent

will always be remembered.

Foreword

Institutional histories are important for their intrinsic academic worth;but their real value lies in the opportunity they afford to understand andappreciate the past in which is deeply rooted the present which, in turn,decides the contours and colours of the future. Institutional histories canthus be likened to a crystal-ball simultaneously mirroring an institution’syesterday, today and tomorrow- all as parts of an inherently inter-connected episode. This was exactly the object that inspired andmotivated the Institute of Cost and Management Accountants of Pakistan

to publish the History of Management Accounting Profession in Pakistan now in your hands.

The Institute was founded in 1951 and the profession of management accounting has been inexistence as a statutorily regulated profession since 1966. More than half a century haselapsed and no serious attempt seems to have been made - at least not in documentedmemory - to trace the genesis of the profession in Pakistan and its upbringing over the years.Now that the profession has reached its prime youth and is destined to grow further, theInstitute has proudly recapitulated and narrated the story of its birth and gradualdevelopment. This the Institute has done in the hope that knowing where we have come from and realising where we stand today will help us reach where we aspire and deserve to be as acherished, honourable, respected and self-respecting profession actively serving the society.Hence this book.

I am indeed pleased and honoured to present this book to the readers with some sense ofaccomplishment but in all humility. I would like to assure them that all possible efforts havebeen made to present an authentic, objective and comprehensive account; but the chances ofunintended mistakes and unintentional omissions cannot be ruled out. My only request tothe readers is to magnanimously overlook them.

Hasan A. Bilgrami, FCMAPresident

July 2009

Preface

The Institute deserves my deepest appreciation for publishing this book,to pay lasting homage and glowing tributes to its founders. This historical document takes us through time, depicting the evolution of theManagement Accounting Profession, with special reference to thedevelopment made by the Institute.

By the time I had assumed the office of Chairman, Research Committee,this publication was already scheduled to go to press. I can onlyappreciate here the tremendous efforts made by all the concerned, particularly mypredecessors and members of Research, Quality Assurance & Ethics Committee. I especiallyacknowledge with gratitude the valuable contribution made by Mr. M. H. Asif, FCMA whohad been instrumental in bringing out this valuable publication.

This publication attempts to further strengthen the roots of management accountingprofession in our country. At the same time, it also highlights the pivotal role played by theInstitute in developing and strengthening the profession. I hope that the readers, particularly the Management Accountants, would find this book a useful addition to their library andreinforce their sense of belonging to this Institute.

Masud Muzaffar, FCMAChairman, Research, Quality

Assurance & Ethics Committee

July 2009

About the Book

It takes a tremendous amount of deep thinking, meticulous planning andpainstaking efforts to create new institutions. But when institutions socreated attain a certain level of maturity and earn recognition and respect,not many bother to remember how they were born and brought up. Theinspiring saga of courage and determination underlying their existingstature is buried deep in the sands of time. The long and arduous distancetraversed is forgotten and the memory of those who toiled tirelessly tobuild them brick by brick recedes into oblivion. Only some yellowedpapers remain in dusty archives to tell the story. But the institutions do

stand as living realities, immortalising the memory of, and paying lasting homage to, theirfounders and builders.

Our Institute and, in fact, the profession of Management Accounting itself were founded inPakistan by a few men of vision and determination in difficult and inhospitable conditions.To repay the debt, though only partly, the Institute could not have possibly found a betterway than to tell the story of how a new profession was created in a new country; what it hadto go through to establish and get recognized; and to progress and reach where it standstoday. This is a story of courage and dedication, of trials and tribulations, of failings andaccomplishments. In the end, it is a success story worth telling.

The institutional history covered in the book essentially spans over 55 years – from 1951 to2006. Historical account of the profession of accounting, however, goes back to its genesis inancient times. Even if that period was set aside, there still remained more than half a centuryto cover – heaps of material to dig out, sift, collate and piece together to form a compact story.As it normally happens in developing countries like ours, information available was neithercomplete nor coherent. Moreover, the aspects to cover were too many in number and toovaried in nature. Arranging the disjointed pieces into an intelligible and coherent narrationwas not an easy task. Equally difficult was to ensure accuracy and objectivity. How far havewe been able to surmount these obstacles is best left to the readers to decide.

The book is divided into 13 chapters, each describing a different facet of the Institute, not inisolation from each other but one logically leading to the other in naturally flowingprogression. Together they unfold the story of the Institute which, in essence, is the history ofthe profession of management accounting in Pakistan.

The First Chapter attempts to trace the roots of the profession from the ancient times throughthe medieval ages to the modern age. It also highlights the contribution the Muslims made to

the knowledge of mathematics, which is often ignored by historians. The birth of modernaccounting has also been discussed with special reference to the emergence of costaccountancy and to the various legislations enacted by the British for India, in which aredeeply rooted our professional procedures and practices.

Chapter Two specifically and exclusively narrates the story of the founding of the Institute in1951. How and why was it conceived? Who founded it? What were its objects and purposes?What problems and difficulties it had to face in its initial years? What role did assistance from Canada under the Colombo Plan play in its development? What efforts were made toestablish links with foreign professional bodies? How was the Institute housed in its ownbuilding? These are the main questions addressed in this chapter.

Chapter Three describes the creation of the Institute as a statutory body and the regulation ofthe profession by an act of the Parliament. It also tells the story of why and how was the nameof the Institute changed from Pakistan Institute of Industrial Accountants to its present name.

Described at length in the Fourth Chapter is the Council of the Institute – its composition,functions, committees, branches and meetings. Brief life sketches of all those who have so farserved the Council as President have also been included as a mark of respect and with a sense of indebtedness.

Among the main purposes of the Institute’s creation are education and examinations. Howand to what effect are these purposes served is the subject matter of the next two chapters.Education through coaching classes and correspondence courses, periodic syllabusrevisions, entrance requirements, other educational and training initiatives, matters relatingto books and libraries, students’ enrolment over the years and the Institute’s fees structureform part of the Fifth Chapter. And the Sixth Chapter discusses examination policy andsystem, the criteria of granting exemptions, awards and prizes. It also analyses statistics ofcandidates taking and passing examinations in all the past years.

Then comes Chapter Seven to take a close look at the members, both Fellows and Associates.How are their names entered in the Institute’s Register? Where are they located? What arethey doing and where? What opportunities are available to them? These are some of thequestions attempted in this chapter.

The next Chapter surveys the various programmes aimed at the members’ continuingprofessional education and their professional development. The numerous seminars andconferences arranged, computer courses run and the journal published by the Institute havebeen discussed in this chapter.

Research and publications represent two other very important areas of activity, not onlyfrom the professional point of view but also as means of furthering the objects of CPE andprofessional development. The Institute’s performance in these areas is reviewed at length in

About the Book

Chapter Nine. Also included for ready reference are abridged resumes of important researchstudies conducted.

The Tenth Chapter is devoted to the description and discussion of professional ethics. Itcontains the professional do’s and dont’s prescribed by the Institute for its members,discusses the efforts made to frame a formal code in the light of IFAC’s guidelines andreviews the development of SAFA’s Code of Ethics, which has recently been adopted by theInstitute’s Council for its members in Pakistan.

ICMAP is an active member of various international professional organizations. ChapterEleven describes the aims, objects and activities of these bodies with a view both tounderscoring the obligations devolving on members of the profession in Pakistan andhighlighting the benefits and opportunities flowing from their membership. Other aspects ofthe Institute’s international relations have also been discussed in this Chapter.

The Twelfth Chapter contains a description of ICMA’s Secretariat – of its administrative set-up, its executive heads, its financial position and the many services it renders for themembers’ benefit and welfare.

The concluding chapter of the book makes an attempt to explain the demanding challengesconfronting the Institute in the wake of the transition through which the profession globallyis passing; highlights the many constraints under which the profession has to survive in aninhospitable local environment; and frankly and honestly brings to fore the challenges theInstitute is facing. Most purposefully, the chapter elucidates what future strategy is beingadopted to manage the change and to enhance the Institute’s and the profession’seffectiveness, utility, reputation, standing and status.

The book also contains a large number of tables to illustrate or substantiate variousstatements made. These list facts or figures which could not have been included in the mainbody of the book either because of their length or for fear of interrupting the flow. However,where immediate reference is necessary for analysis, tables have been made part of thenarrative notwithstanding their length and the threatened break in continuity.

Many historical accounts contain frequent references to documents to which the readers donot have easy access. Care has been taken to ensure that this book does not suffer from suchan inadequacy. With this object in view, important documents, to which references havebeen made in the book, have been added at the end as appendices. We do not want ourreaders to have to make rounds of the libraries in order to fully understand the context andpoint of reference of what the book talks about. Hence this arrangement.

I will be failing in my duty if I do not place on record the Institute’s, and of course my own,deep sense of gratitude and unreserved appreciation for the encouragement and support wereceived from many people in the present venture. Their number being too large to cover, Ican only thank them all collectively. I must, however, specifically mention a few friends

About the Book

without whose helpful involvement, this book could not have seen the light of day. The firstamong them is a highly respected past President of ICMAP, Mr. Khurshid Ahmad, who infact fathered the idea to compile the history of the profession in Pakistan. He was sold on theidea so emotionally and pursued it so vehemently that there was no way the project wouldnot have been initiated. And when it did finally get underway after protracted delay,Mr.Khurshid, despite old age and ill health, was always there to offer guidance andmotivation. Also deserving a special mention is Mr. Qaisar Mufti, my worthy predecessor,who undertook the actual initiation of work on the project which had been lingering on forquite some time. It was he who got all the relevant material retrieved from old dusty files,had it thoroughly checked for accuracy and, most importantly, went on a hunt for acompetent professional, who could provide technical guidance and support. What a strokeof luck it was that Mr. Ismail Patel, a very experienced senior officer of the InformationService of Pakistan, now retired, agreed to assist. I have worked with him closely and have no hesitation in saying that his intense involvement, beyond the call of duty on many occasions,ensured a high quality narration and compilation. He helped not only in writing and editingbut also in proof reading, page layout and final production. I am personally indebted to him.

I sought comments on the draft, from many senior members who have, over the years,contributed to the growth of Management Accounting Profession in Pakistan, and speciallyacknowledge the detailed input from Mian Mumtaz Abdullah and Mr. Muhammad Rafi, our two former Presidents.

I should also gratefully acknowledge the hard work done by Mr.Kamaluddin, AdvisorResearch, Mr. Shahid Anwar, Deputy Director Research and their team for digging out andcollecting the heaps of information on which this book is based and for the arduouscompilation of data included in it.

Finally, I must profoundly thank the successive National Councils for their continuedsupport and valuable guidance which served as enduring sources of inspiration andencouragement in the entire process of conceiving, initiating and completing this venture.

Our most sincere effort has been to make the History of Management Accounting Professionin Pakistan as authentic and as easily readable and intelligible as an institutional historyshould be. Who but you can be an honest judge of our success or otherwise?

M. H. Asif, FCMAChairman

Research, Quality Assurance & Ethics Committee

June 2008

About the Book

Contents

Foreword

Preface

About the Book

Chapter One: Forget Not Thy Roots ......................................................................................17

– In Ancient Times ................................................................................17

– Forgotten Muslim Brilliance .............................................................19

– Birth of Modern Accounting.............................................................23

– In British India ....................................................................................25

– Emergence of Cost Accounting........................................................26

Chapter Two: A Sapling Planted............................................................................................33

– Background .........................................................................................34

– The Idea ...............................................................................................35

– Founding Fathers ...............................................................................37

– Objects..................................................................................................38

– Teething Problems .............................................................................40

– Assistance Under Colombo Plan .....................................................47

– Reaching Out ......................................................................................49

– A Place Called Home ........................................................................50

Chapter Three: On The Statute Book.......................................................................................53

– The Act.................................................................................................53

– Rose by Another Name .....................................................................56

Chapter Four: At the Helm: The Council .............................................................................59

– Composition........................................................................................59

– Functions .............................................................................................62

– Committees .........................................................................................66

– Branch Councils..................................................................................67

– Meetings ..............................................................................................68

– Presidents ............................................................................................70

Chapter Five: Fulfilling Raison d’ etre (A): Education ......................................................79

– Syllabus................................................................................................79

– Entrance Requirements .....................................................................92

– Coaching..............................................................................................95

– Correspondence Courses ..................................................................97

– Canadian Help....................................................................................99

– Other Initiatives................................................................................100

– Books and Libraries .........................................................................102

– Enrolment ..........................................................................................104

– Fees .....................................................................................................106

Chapter Six: Fulfilling Raison d’ etre (B): Examinations ..............................................107

– Policy..................................................................................................107

– System................................................................................................109

– Exemptions........................................................................................110

– Statistics .............................................................................................121

– Awards and Prizes ...........................................................................128

Contents

Chapter Seven: Proud Products: The Members....................................................................131

– Categories..........................................................................................131

– The Register.......................................................................................133

– Membership Profile .........................................................................137

Chapter Eight: Keeping Up-to-Date ......................................................................................149

– IFAC Guidelines ...............................................................................150

– CPD Programme ..............................................................................156

– Seminars and Conferences..............................................................159

– Computer Courses ...........................................................................174

– Journal of the Institute.....................................................................176

Chapter Nine: Research and Publications ...........................................................................179

– Research Department ......................................................................179

– Research Studies...............................................................................183

– Cost Accounting Records Rules .....................................................195

– Publications.......................................................................................202

Chapter Ten: Professional Ethics ........................................................................................203

– Legal Provisions ...............................................................................203

– IFAC Code of Ethics.........................................................................207

– SAFA Code........................................................................................208

– Salient Features.................................................................................211

Contents

Chapter Eleven: In Global Fraternity ........................................................................213

– Coming Out of Shell ........................................................................213

– International Accounting Standards Board (IASB).....................215

– International Federation of Accountants (IFAC).........................216

– Confederation of Asian and Pacific Accountants (CAPA).........221

– South Asian Federation of Accountants (SAFA) .........................221

– Visitors from Abroad.......................................................................223

– Exposure Drafts ................................................................................225

Chapter Twelve: The Secretariat .............................................................................................227

– Administrative Set-Up.....................................................................227

– Executive Directors ..........................................................................230

– Finances .............................................................................................232

– A Friend Indeed................................................................................234

Chapter Thirteen: The Road Ahead ..............................................................................237

– Global Challenge ..............................................................................237

– Environmental Constraints.............................................................238

– Institutional Problems .....................................................................241

– Change Management.......................................................................243

– Future Strategy .................................................................................244

– The Strategic Action Plan................................................................247

Contents

Tables .............................................................................................................255

I Composition of National Council (1951-2006) .............................255

II Chairmen of Standing Committees (1966-2006) ..........................265

III Branch Councils (1966-2006)...........................................................268

IV Council Meetings (1951-2006).........................................................270

V Students Fees (1951-2006) ...............................................................280

VI (A) Tuition Fees (1968-1973) ..................................................................282

VI (B) Tuition Fees (1973-1985) ..................................................................283

VI (C) Tuition Fees (1986-1995)....................................................................284

VI (D) Tuition Fees (1995-2005) ..................................................................285

VI (E) Tuition Fees (2006-2007) ..................................................................285

VII Examination / Exemption Fees (1951-2006).................................286

VIII Yearwise Membership Growth (1951-2006) .................................294

IX Membership Fees (1951-2006) ........................................................296

X Publications.......................................................................................298

XI International Financial Reporting/Accounting Standards........303

XII SAFA Projects assigned to ICMAP................................................305

XIII Organizational Structure.................................................................306

Appendices .....................................................................................................307

A Memorandum of Association.........................................................307

B Articles of Association.....................................................................312

C Cost and Management Accountants Act, 1966 ............................335

Down the Memory Lane (Pictorial View)..............................................................................361

Contents

Chapter One

Forget Not Thy Roots

Barring a few exceptions emerging particularly during the last century of the lastmillennium, all branches of knowledge can, with little stretching, be traced to the ancienttimes or at least to the medieval. Accounting is no exception. Museums of the world are fullof archeological evidence to indicate that past civilizations dating back to about 3000 B.C.resorted to record keeping of events and economic transactions, which are really the basis ofall accounting.

In Ancient Times:

The Chaldacan-Babylonian civilization, which gave the world the first organizedgovernment, was the producer of the oldest surviving business record. The sixth king of thefirst dynasty of Babylonian, Hammurabi, ordered his scribes to record his Code of nearly 300rules and regulations covering business and social conditions. The Code of Hammurabi isrecorded on a seven feet tall black column. The finest example of Akkadian languagecuneiform and scripts are preserved on this shaft. The original is in the Louver in Paris andone copy is on exhibit in the Oriental Museum, University of Chicago. And it is to the times of Babylonian empire that authors have generally traced the origin of accounting. It is said thatnumerous storehouses existed throughout Babylonia to receive taxes and dues paid in kind.Records of these taxes were kept by scribes, using slabs of fine clay on which they wrote withsharp pointed styli. They can be considered to be the earliest accountants.

After the destruction of the Babylonian empire, Egypt emerged as the commercial andcultural centre of the world. Here too scribes formed the pivots on which the wholemachinery of the treasury and other departments turned. They recorded taxes and tributes to the Pharaohs on papyrus scrolls in ink the ageless durability of which even today intriguesthe scientists. Bookkeeping is said to have been taught in Egyptian schools as early as 1700B.C. and the University of Alexandria is said to have later had a chair of Accounting.

But it is to ancient Greece that mathematics owes its greatest debt. The many treatises writtenby master mathematicians of Greece are classics from which the world learned the basics.

17

Ancient Greece is also credited with developing banking far beyond anything previouslyknown. Originating in the temples, banking gradually moved into private hands and it wasthere that the cheque system is believed to have had first come into use. The Greeks were alsothe first people who minted gold coins and issued them about 600 B.C.

The Alexandrian period of Greek civilization ended with Rome’s conquest of Egypt, the lastof Alexander’s kingdoms. Roman orator Cicero boasted that the Romans were not dreamerslike the Greeks, but applied their study of mathematics to the useful. Nothingmathematically significant was, however, accomplished by the Romans. They did give theworld the Roman numericals but those were cumbersome for calculation. Despite thisdrawback, the use of Roman numericals continued in some European schools, until about1600 and in book-keeping for another century. The Romans’ most significant contribution toaccounting was that they introduced the practice of preparing statements of financialposition for payment of tax.

After the decline of Greece and Rome, mathematics flourished for hundreds of years in Indiawhere it was largely used as a tool for astronomy. So far as the art and practice of accountingis concerned, Hindu historians and some Western researchers insist that a fairly developedsystem was in vogue in ancient India even in the times of the Vedas and Upanisads. Informing this opinion, they rely heavily on the discussion in the Vedas of matters like thesystem of land revenue, currency, trade, various occupations as well as the general social and economic conditions obtaining in those times. The fabulous riches of India and its trade withforeign lands are well recorded in history. It can be safely argued that commercialtransactions and the extensive scale of trading operations could not have been carried outwithout systematic record keeping.

Profuse references are quoted by Indian writers from ancient treatises to substantiate theirclaim that accountancy had its origin in India, and not in Babylonia. A later treatise writtensometime between the 4th and 5th century A.D., Naradiya Dharmasastra discusses subjectslike money lending on interest, and matters like sureties, pledges, witnesses, oaths, etc.However, the culminating point with regard to the setting up of economic and financial basecan be had from Arthashastra written by Kautilya, King Chundragupta’s minister. Itcontains a separate chapter dealing with “The business of keeping accounts in the office ofaccountants”. This is cited by Indian authors to prove beyond doubt that not only did acomplete system of book keeping and accounting but also the vocation of accountants existed in ancient India.

Hindus of the Vedic times are also credited with the invention of zero, which gave the worldten basic digits and paved the way for the decimal system. Some scholars have written that

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Chapter One: Forget Not Thy Roots

before the creation of the symbol zero, each digit was written in different symbol. When aHindu wanted to record 10, he wrote it down as “1.”; just a dot in the right hand row. Whenhe reached 100, complications set in because he recorded it as “1..” and he soon found that hefrequently miss-read his dots. As a remedy, the dot was changed to “ 0 “ and with that wasgone forever the risk of mistaking 10 or 100 and even 1000 with 1. With the development ofbetter numeric symbols, mathematics became an exact workable science.

For long, many believed that the decimal system of numerals was invented by the Arab. Even today, the numerals we use are known as “Arabic numerals”. No doubt these numerals wereinfluenced by India’s mathematics, which was leant by the Muslim world either throughmerchants trading with the west coast of India or through Muslim armies who conqueredSind in 612 A.D. But equally true is the fact that the Muslim mathematicians re-wrote thenumerals and with that made it possible to work out simple fractions and decimal fractionswhich they described during the Middle Ages. That brings us to the contributions theMuslims made to mathematics.

Forgotten Muslim Brilliance:

Recent research paints a new picture of the debt the modern world owes to Arabic/Islamicmathematics. Certainly many of the ideas which were previously thought to have beenbrilliant new conceptions due to European mathematicians of the sixteenth, seventeenth andeighteenth centuries are now known to have been developed by Arabic/Islamicmathematicians around four centuries earlier. In many respects the mathematics studiedtoday is far closer in style to that of the Arabic/Islamic contribution than to that of the Greeks.

There is a widely held view that, after a brilliant period for mathematics when the Greeks laid the foundations for modern mathematics, there was a period of stagnation before theEuropeans took over where the Greeks left off at the beginning of the sixteenth century. Thecommon perception of the period of 1000 years or so between the ancient Greeks and theEuropean Renaissance is that little happened in the world of mathematics except that someArabic translations of Greek texts were made which preserved the Greek learning so that itwas available to the Europeans at the beginning of the sixteenth century.

The Muslims learned from the Greeks who loved mathematics and geometry. Theyborrowed from India a number system that had a zero and rewrote it as their own. Theyborrowed from the Babylonians whose number system was based on 60 and from the ancientEgyptians who had the maths and geometry skills to build incredible pyramids. So from thebeginning, “Arabic maths” was a mixing of international knowledge. But the Muslims made

19


additional contributions of their own, and through their study and written work preservedthe knowledge of mathematics that otherwise might have been lost to the world.

This period began under the Caliph Harun ar-Rasheed, the fifth Caliph of the Abbasiddynasty, whose reign began in 786. He encouraged scholarship and the first translations ofGreek texts into Arabic were made during ar-Rasheed's reign. The next Caliph, al-Ma'mun,encouraged learning even more strongly than his father ar-Rasheed. He set up the House ofWisdom in Baghdad which became the centre for both the work of translating and of ofresearch. Al-Kindi (born 801) and the three Banu Musa brothers worked there, as did thefamous translator Hunayn ibn Ishaq. It should be emphasized here that the translations intoArabic at this time were made by scientists and mathematicians and not by language expertsignorant of mathematics, and the need for the translations was stimulated by the mostadvanced research of the time. It is important to realize that the translating was not done forits own sake, but was done as part of the current research effort.

Perhaps one of the most significant advances made by Muslim mathematicians began at thistime with the work of al-Khwarizmi, namely the beginnings of algebra. It is important tounderstand just how significant this new idea was. It was a revolutionary move away fromthe Greek concept of mathematics, which was essentially geometry. Algebra was a unifyingtheory which allowed rational numbers, irrational numbers, geometrical magnitudes, etc., toall be treated as “algebraic objects”. It gave mathematics a whole new development path somuch broader in concept to that which had existed before, and provided a vehicle for futuredevelopment of the subject. Another important aspect of the introduction of algebraic ideaswas that it allowed mathematics to be applied to itself in a way which had not happenedbefore.

Al-Khwarizmi also helped to bring “Arabic numerals” into use in the Islamic empire as wellas later in Europe. The introduction of Arabic numerals was one of the greatest advances inthe history of mathematics. These numerals were influenced by Indian numerals, whichwere reworked by Al-Khwarizmi. Much later, the Europeans changed the Arabic numeralsinto the numerals in use today. It was a system based on place values and a decimal system of tens. This system had a zero to hold a place. These numbers were much easier to use forcalculation than the Roman system. Addition, subtraction, multiplication and division thenbecame easy.

Around the tenth century, three systems of counting were in use in the Arab world. The firstof the three systems was the finger-reckoning arithmetic which derived from counting on the fingers with the numerals written entirely in words. This system was used by the businesscommunity. Mathematicians such as Abu'l-Wafa (born 940) wrote several treatises using this

20


system. Abu'l-Wafa himself was an expert in the use of Indian numerals but these, in his ownwords “did not find application in business circles and among the population of the EasternCaliphate for a long time”. Hence he wrote his text using finger-reckoning arithmetic sincethis was the system used by the business community. The second of the three systems wasthe sexagesimal system, with numerals denoted by letters of the Arabic alphabet. It cameoriginally from the Babylonians and was most frequently used by the Arabic mathematicians in astronomical work. The third system was the arithmetic of the Indian numerals andfractions with the decimal place-value system. But there was not a standard set of symbols.Different parts of the Arabic world used slightly different forms of the numerals. At first, theIndian methods were used by the Arabs with a dust board. A dust board was needed because the method required the moving of numbers around in the calculation and rubbing some outas the calculation proceeded. The dust board allowed this to be done in the same sort of waythat one can use a blackboard, chalk and a blackboard eraser. However, al-Uqlidisi (born 920) showed how to modify the methods for pen and paper use. Al-Baghdadi also contributed toimprovements in the decimal system.

It was this third system of calculating which allowed most of the advances in numericalmethods by the Arabs. It allowed the extraction of roots by mathematicians such as Abu'l-Wafa and Omar Khayyam (born 1048). Omar Khayyam also showed how to express roots ofcubic equations by line segments obtained by intersecting conic sections. The discovery ofthe binomial theorem for integer exponents by al-Karaji (born 953) was a major factor in thedevelopment of numerical analysis based on the decimal system. Al-Kashi (born1380)contributed to the development of decimal fractions not only for approximating algebraicnumbers, but also for real numbers. His contribution to decimal fractions is so major that formany years he was considered as their inventor.

Abu Kamil (born 850) worked on integer solutions of equations. Thabit ibn Qurracontributed impressively to amicable numbers while al-Haytham (born 965) was the first toattempt to classify all even perfect numbers. In addition to very valuable work on algebra,number theory and number systems, the Arab mathematicians made considerablecontributions to geometry, trigonometry and mathematical astronomy. The last notableMuslim mathematician of that age was Al-Khashi (born 1390) who calculated 1 (pi) to 16decimal places, which was the best until about 1700. After him, Arabic / Muslimmathematics closed as did the whole Muslim civilization while scholarship in Europe was on the up- swing.

The virtual halt of mathematics in the Muslim world represents an intriguing paradox ofhistory. It had had an impressive start. By the year 900, the acquisition of past mathematicswas complete. After that Muslim scholars began to build on what they had acquired and in

21


that they made good progress in the right direction with speed. But then they suddenlystopped. The momentum they had gained over two hundred years should have taken theminto the Age of Renaissance but that was not to be. Why? An answer can better be attemptedby researchers in the rise and fall of civilizations.

While tracing the origins of record-keeping and numerals and the development ofmathematics, we have skipped over the genesis of some other important developmentsdirectly related to accounting, such as the medium of exchange and the institution ofbanking. How did they happen to be? A brief historical account seems in order to understand the background of the birth of accounting.

One of man’s first coins was minted in ancient Greece during the days of King Croesus ofLydia around 560 B.C. His subjects mined vast amounts of gold and coined “Gold Stater”.After him, when Alexander the Great ruled the Greek empire around the Mediterraneanfrom 336 to 343 B.C., he decreed that the likeness of his own helmeted head be used on theGold Stater and Silver Tetradrachm as the official coins of trade.

The Romans were probably the first to make coins of various monetary values. Several typeswere minted, each displaying the head of a god or goddess. The Uncia was the unit of value.The Sextans was worth 2 Uncias; the Quadrans 3 Uncias; the Trien 4 Uncias etc. These coinscirculated in the trade during the time of Caesar and the Roman Republic (225-27 B.C.).Under Augustus, Rome’s first Emperor (27 B.C. to 14 A.D.), the Romans went one stepfurther. The bronze Sestertius, the Silver Denarius, and the Gold Aurius gave the Romans aflexible coinage system much like we have today.

Gradually, as governments established their monetary system, a very important accountingtool was born. Now records could be maintained in understandable values - the value of themedium of exchange being the common denominator in all records and financial reports ofthe tradesman’s world.

It was in Greece again that banking took the form of an institutionalized practice. Thewealthy merchant could not afford to leave his gold and silver at home or in his place ofbusiness. Thieves thrived on such tangible treasure, so the prudent rich man deposited histreasury with the priest of local temple. This was good insurance because no thief would dare to taunt the wrath of gods by stealing from the temple. Receipt for these treasures was givenby the custodian priest to the owner depositor. These receipts were than used to transactmore business or repay debts and served as currency as they passed from one merchant toanother. The final holder in due course could claim the treasure described in the receipt fromthe temple custodian when he desired. Gradually, this service moved from the temple to

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private hands, assuming in the process more mundane and commercial character. Athensbecame a great commercial center and it was there that the cheque system is believed to havehad first come into use.

History rolled on and human civilization reached what is known as the Middle Ages. By thethirteenth century, many goldsmiths and silversmiths had come on the scene all overEurope, Italy being in the forefront. The Italian money merchant, called a camsore, displayedhis coins in neatly arranged piles on a bench known as a banco; thus our word “bank”.

The original bank of Venice was founded in 1171 A.D. A few years later (1178), merchants ofGenoa founded the bank of San Giorgio. One of its famous customers was none other thanChristopher Columbus. The Gold Genovina (ducat) was issued and used in marts of trade,around Genoa in 1252. The bankers’ guild was organized in Florence the same year. One ofthe great banking families, the de Medicis, controlled this banking system for 300 years (1434-1737). Other noble banking houses, the Fuggers and the Rothschilds, performed importantbanking services in Germany and other European countries. Thus banking was born to servebusinessmen, and later on, the public in all financial matters. No wonder then thatprofessional accountants (as distinct from scribes and officials concerned with the collectionand accounting of taxes) are also said to have first appeared in Italy.

Birth of Modern Accounting:

Although the term “rationator” meaning accountant had been introduced as early as 831A.D., it was not until 1495 that the concepts of modern accountants were clearly defined byan Italian mathematician, Luca di Borgo Pacioli who was destined to be given the title “Thefather of Modern Accounting”. Pacioli was born in 1445 A.D. in the province of Tuscany.After receiving a liberal education, he became a foremost mathematician and taught in manyItalian universities, including those in Florence, Venice, Padua, Naples and Rome. Hisabilities were recognized by a contemporary mathematician, the famous Leonardo di Vinci,later to become one of the world’s most great artists. Their common interest in mathematicsproduced a mutual and beneficial friendship.

Pacioli is credited with the authorship of the first written work on algebra, geometry andbook-keeping, entitled “Summa de Arithmetica Geometria Proportiomoni &Proportionalita” (Everything about Arithmetic, Geometry and Proportions) written in 1494.The next year, 1495, Pacioli wrote “De Computiset Scripturis” which clearly defined doubleentry bookkeeping principles, thus crediting this Franciscan Monk as “father of modernaccounting”. Another treatise on bookkeeping, the first written in English, was prepared by

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John Gough of London, in 1543. The first formal course in accounting was presented tostudents at the collegio dei Raonati in Venice in 1581.

The Italian method of bookkeeping was further developed in Europe from the sixteenthcentury. It was in the sixteenth century that specific journals were introduced for recording of different types of transactions and the practice of financial statements was evolved. The useof separate inventory accounts for different types of merchandise was introduced in theseventeenth century. Three methods of treating fixed assets were evolved by the eighteenthcentury. Accounting as a science was recognized in 1742 in Milan, Italy, when a scale of legalaccountants’ fees was established officially.

But it was not until the nineteenth century that the profession of accountancy emerged in theform familiar to us today. The development of commerce, trade and industry accentuated the need for competent persons with knowledge and ability to practice accountancy and help the development of the corporate structure of business, which had led to a division betweenownership of funds and their management. This need of the time was undoubtedly one of the strongest influences on the evolution of both accounting and auditing and was in the mainresponsible for their present day refinement. In response to this need, several developmentsoccurred in accounting in the nineteenth century, such as: development in accountingtechniques for prepayments and accruals, development of funds statements, developmentfor complex issues like the computation of earnings per share, accounting for businesscomputations, accounting for inflation, long-term leases, and accounting for the newproducts of financial engineering.

As the profession of accountancy gained recognition and importance, professional bodies ofaccountants started to be formed.

The first Society of Accountants was organized in Edinburgh, Scotland in 1854. This wasfollowed by similar organizations in Glasgow in 1855 and London in 1870. In 1880, a RoyalCharter was granted to the Institute of Chartered Accountants in England and Wales as thefirst national body of professional accountants. Other national organizations wereconstituted as follows: In 1896, the American Association of Public Accountants which laterbecame the American Institute of Certified Public Accountants. In 1902, the CanadianInstitute of Chartered Accountants. In 1928, the Institute of Chartered Accountants inAustralia, which had its beginnings in the Adelaide Society of Accountants of 1885 and theAustralasian Corporation of Public Accountants established in 1907.

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In British India:

When companies started to mushroom in India during the days of the British Raj,accountancy gradually gained a better standing in commercial concerns. Accountantsbecame important because of the need for keeping accounts of the flourishing and expanding trading operations, due to the need for auditing and in response to the importance of relianceon the growing concepts of continuity, periodicity and accruals. On its part, the Governmentalso realized the need to regulate the functioning of companies and enacted the followinglegislations:

(i) Joint Companies Act (XLIII of 1850)(ii) Joint Companies Act (XIX of 1857)(iii) Joint Companies Act (VII of 1860)(iv) Indian Companies Act 1866(v) Joint Stock Companies Arrangement Act 1870 and Indian Companies Act 1882.

The first three were all modelled on the English Joint Stock Companies Acts, whereas thefourth one was nothing but a transcript of the English Companies Act of 1862 with necessarymodifications to suit the Indian conditions. The first three pieces of legislation did notcontain any elaborate provisions directly dealing with accounts, but the 1866 Act did, for thefirst time, make substantial provisions regarding maintenance of books of accounts and theirannual audit. When the English law, on which the 1866 Act was modelled, underwentvarious amendments through different subsequent legislations, all the alterations wereadopted in the Indian law in what is known as the Indian Companies Act, 1882. This Act toodid not contain any detailed provisions regarding books, making of accounts and auditthough a table in the Act did contain some important provisions, but the adoption of thoseprovisions was optional. Even so, several companies started to include in their Articlesprovisions on those lines. Neither was the audit of accounts made compulsory by the Act norwere qualifications of auditors prescribed with the result that it remained open to anyone tostyle himself as an “auditor” and act as an independent auditor whenever a company choseto have its accounts audited.

In subsequent years, conditions of companies changed substantially. Industrial andcommercial activities flourished and public interest in them also increased. Shareholders ofcompanies now wanted their interests to be properly protected. Showing a goodappreciation of the changing situation and with a view to safeguarding public interest, theBritish Government enacted the Indian Companies Act, 1913. The new Act, which replacedthe Act of 1882 and all the subsequent amending Acts, was intended to regulate

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comprehensively the working of companies and also contained specific provisions relatingto accounts and audit. Finding specific mention in the Act were matters like requirement tokeep proper books of accounts, Annual Balance Sheet, contents of the Balance Sheet, itsauthentication and Auditor’s Report, rights of members to their copies, qualifications andappointment of auditors and their powers and duties. One of the sections of the Act provided that no person could be appointed as auditor unless he held certificate from competentauthority entitling him to act as such.

The Companies Act, 1913 thus gave a real fillip to the organized development of theprofession of accounting and audit in India. But it must be added with some sense ofrepentance that the promising occupation did not attract many Indian Muslims. For quitesome time, the field of audit and accountancy remained almost an exclusive domain of theHindus and, to some extent, of Paris in addition to the imported foreigners. And this issurprising, considering that the concept of accounting is intrinsically built into Islam’ssystem of reward and punishment for all man’s actions from cradle to grave. What is Islam’sconcept of the Day of Judgment? It is the day when all human beings shall be resurrected andthe balance sheet of all that each of them did in life, prepared by two guardians appointed toconstantly make entries of each and every of his actions in his book of accounts, shall bepresented to him and, on the basis of that, a final judgment shall be made of his perpetualabode – either Hell or Heaven.

Says Allah in the Holy Quran : Nay, but ye deny the judgment. Lo! There are above youguardians. Generous and recording. Who know (all) that ye do. (Surah 82 : 9-12)

At another place, He exhorts thus:

And every man’s augury have We fastened to his own neck, and We shall bring forth for himon the Day of Resurrection a book which he will find wide open. (And it will be said untohim): Read thy book. Thy soul sifficeth as reckoner against thee this day (Surah 17 : 13-14)

Such direct references in the Holy Book to record keeping by guardians above man and hisfinal accountability on the basis of the recorded account should have been enoughmotivation for the Muslims to enthusiastically turn to accounting profession. Somehow thatdoes not seem to have happened to the extent it should have.

Emergence of Cost Accounting:

While various all important developments were taking place in the accounting profession inthe beginning of the twentieth century, a new subject was sprouting to branch off from the

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main discipline of accountancy: Cost accounting. When was it in history that merchants didnot calculate the cost of their merchandise before deciding at what price to sell them? Butwhen modern manufacturing began, involving a number of tangible and some intangibleinputs, determination of cost gradually became a complex matter.

The Industrial Revolution depended on inventors and entrepreneurs, not accountants.However, it was the survival of their firms that required innovative accounting and, later, the development of a profession. Big business, particularly the railroads, required capitalmarkets that depended on accurate and useful information. This was supplied by theexpanding accounting profession. Turn of the century America saw the rise of really bigbusiness, governable because of improvement in cost accounting. But the Crash of 1929 andthe subsequent Great Depression demonstrated problems with capital markets, businesspractices, and considerable deficiencies in cost and management accounting practices.

Considerable progress in manufacturing was made in Britain during the early part of theIndustrial Revolution. Many of those early firms went bankrupt. Little credit went tomanufacturing operations and continuing operations and expansion was funded primarilyfrom retained earnings. During depressions, declining demand led to liquidity crises thatmost firms could not deal with. Adequate cost accounting was useful in any circumstances,but essential in bad times. Surviving firms developed cost and management accountingsystems to determine, manage and bifurcate costs for all phases of their operations, including primitive analysis of overhead costs. Costs could be related to specific products and pricescould be set differentially, based on product costs and potential demand for specificproducts. Costs could be altered to increase efficiency, based on factors such as materialprices, differential wage rates, transportation costs. Policies could be modified whendepressions hit to reduce costs and attempt to maintain product demand.

Cost accounting records are found from the early 19th century for New England textile mills.At Lyman Mills, materials costing included freight and insurance, calculated on a first-infirst-out basis. Payroll records were kept daily by employee hours for each process.Overhead was spread to mill accounts based on multiple criteria, such as floor space ornumber of materials and usually treated as a period cost. Unit costs were calculated todetermine prices, initially with prime costs (direct materials and labour) and later includingoverhead.

Many of the basic approaches to cost accounting were developed after 1880. The ScientificManagement analysis of mass production was a major factor. Engineers using job analysis aswell as time and motion studies determined “scientific” standards of material and labour toproduce each unit of output. Complex machines required complex engineering and efficient

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use of workers to perform specialized and repetitive tasks. Standard costs became asignificant efficiency measure. Frederick Taylor analyzed the best ways to use labour andmachines and standards were determined to minimize waste. The focus was on cost cuttingrather than product quality. Actual costs could be compared to standard costs to measureperformance and the variances between actual and standard analyzed to determine potential corrective action. Measuring and allocating overhead costs also were major concerns ofScientific Management.

Big business would be organized around a centralized headquarters, with dozens of plantsaround the region and often across the nation or around the world. Standard products weremass-produced for a large domestic market. Many firms were multi-national. How werethese operations controlled a half century before the first primitive computers? Organizationcontrol was based on simplification, specialization of jobs, and a management hierarchy.Second, costs and performance were coordinated using timely cost accounting reportsdeveloped over decades with the assistance of Scientific Management engineers.

The Du Pont Powder Company was a leader in using a centralized accounting system tocontrol decentralized and geographically disbursed manufacturing operations. Sales,finance, and purchasing were separated from manufacturing and each departmentdeveloped specialized strategies to maximize performance. Senior management focused oncoordinating activities and long-term strategy. Performance measurement was a key factorand Du Pont accountants developed return on investment (ROI) as an efficiency tool andstandard of performance. An asset accounting system, based on a complete inventory ofplant and equipment, made the use of ROI possible. Thus, individual departments could beevaluated by local profit measurement. Daily time sheets and materials usage logs were used to prepare monthly mill production records to measure production operating efficiency. Netearnings were forecast based on product sales estimates and projected earnings per unit.Cash projections were based on net earnings forecasts, which were used to determine newproject financing.

Cost considerations assumed greater importance as industrialists and other businesscommunities were faced with new competitions and challenges in the wake of the first World War. Executives and engineers of industrial units, particularly in the United Kingdom, intheir anxiety to control costs and protect their units from heavy losses, began to feelincreasingly concerned about cost accounting records. An enduring answer to their concernscame on 8th March, 1919, when the Institute of Cost and Works Accountants was formed inLondon, as a limited company with the following first objects:

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(i) To provide an organization for cost accountants, works accountants, estimating and costclerks, and others engaged in occupations requiring a mathematical and technicalknowledge of industry in all its branches, embracing in such knowledge the costs ofproduction, manufacture or sale of all articles produced, manufactured, or sold, in orderto secure for them a definite professional status by means of a system of examination andthe issue of Certificate of Competency.

(ii) To promote and protect the mutual interests of members of the Institute and, as far aspossible, to assist them to obtain adequate remuneration for their services.”

The National Association of Cost Accountants was formed in the United States in 1919. In thefollowing year, the Society of Industrial and Cost Accountants of Canada began itsoperations. About 1930, Australia and New Zealand inaugurated their cost accountantsorganizations. But in the beginning, hardly any attempts were made to assess theprofitability of application of different factors of production in varying doses. Systematic cost accounting till then had no application and product or process-wise cost analysis was rareoccurrence.

The Second World War changed the way cost accounting was looked at as well as the manner in which it was practiced. During the War, cost accountancy earned real importance andbegan to be applied in industry as an essential requirement. As it grew in stature, its scopewas enlarged and its concepts and methods were improved and it began to attain therefinement that characterizes it today. But that was a later development. In the periodbetween the two World Wars, costing was still passing through its formative phase as a newbranch of accountancy. It got a real boost when British educational institutions wereawakened to its significance. One such attempt was made in October 1926 when a lecture on“The Place of Accountancy in Commerce”, delivered at the London School of Economics, had the following to say about the importance of cost accounting and what needed to be done toturn it into a useful practice:

“In recent years the importance of costing has been realized, but there is room for considerable improvement in the methods as generally adopted in this country. A costing system whichdoes not give accurate results is worse than useless; in fact, it may prove to be a great danger.In these days of severe competition, both at home and abroad, a reliable costing system is avital necessity to a manufacturing business. Costing is a highly technical and involvedmatter in many cases and the organization of the system requires considerable skill andthought. It is not purely an accountancy problem. To be successful, the cooperation of thetechnical officers of the concern is absolutely necessary. Further, it is not only essential thatthe system shall be complete and efficient, but it must be carried out rigidly in practice.

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“Often, in practice, the systems adopted are basically unsound and incomplete. Of necessity,therefore, the results are inaccurate. In such circumstances commonly the manufacturerbecomes most dissatisfied with the results and comes to the conclusion that costing is of novalue. It is the particular system which is at fault and if the results are not accurate itcertainly is of no value and all the time and labour expended have been wasted.

“Costing systems can be made too elaborate and great skill and experience is necessary in theorganization of a system which will give accurate results in a clear and simple manner. Thereis no question, however, that in all cases a reliable system can be evolved and that accuratecosting is of the greatest value to management.

“Speaking generally, costing in this country in my view is not satisfactory and considerabledevelopment is necessary in order to place it upon a satisfactory footing. There is a great needfor scientific education and if the manufacturers of this country are to maintain their place inthe markets of the world, far greater attention must be paid to this subject than has been thecase in the past.

“In practice, it is not uncommon to find the costing system separated completely from theaccounts department, but they should be interlinked and, therefore, the costing departmentshould be under the direction of the chief accountant.”

Now we turn to India where, during the War, the Government became the largest buyer of anumber of imported and indigenously produced goods for meeting the war needs. This,coupled with the curtailment of supplies of goods to India from foreign countries due toblockade, risks involved in transshipments and the diversion of productive facilities inexporting countries to the production of war supplies, created a scarcity in the country. Thisscarcity began to show its effect on prices and production costs in Ordnance Factories, whichrose higher.

In spite of the Government factories working at their full capacity, many contracts had to beplaced with private contractors for non-conventional items which were specially required for War on top priority basis. As there was no time to follow normal procurement procedure ofobtaining quotations, the British War Cabinet decided to place orders for such items on costplus basis on well known and competent suppliers. The fixation of plus, say 5% to 20%,depended on the nature and volume of order. After completing the supplies, the supplierfurnished his bill along with cost statement for payment after checking. The disputes on thequestion of actual cost of goods supplied to the Government necessitated properinvestigation into the cost structure of supplies, which could not be carried by untrainedpersons. Thus the need for qualified cost accountants began to be felt not only for

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investigation into cost structure of supplies by the contractors but also for ascertaining cost of production in government factories. Initially, the services of a few foreign experts wererequisitioned, who with the help of locally available cost accountants, introduced elaboratesystem of costing in Ordinance Factories. Since the total demand could not be met bybringing foreign experts on loan, the training of cost accountants within the country becameessential. An attempt to open a branch of British Institute of Cost and Works Accountants inIndia did not materialize.

The War boom had given ground to the growth of many mushroom businesses. Someprominent accountants noticed with concern that the application of wasteful methods inindustries, uneconomic production of goods and services and unplanned investments in alldirections would have to be heavily paid for in the long run. Some sort of control measuresappeared to them to be essential. According to them, the remedy lay in the wide applicationof Cost Accounting Techniques in industry. The necessity of an organization to not onlyteach cost accounting but also to provide proper training facilities was felt.

Some of these accountants met Government officials who were thinking on the same lines.After several meetings between them, an Institute under the name of “Indian Institute of Cost and Works Accountants” was formally registered on 14.6.1944 under the Companies Act (Itwas replaced by the Institute of Cost and Works Accountants of India established by an Actin May, 1959). In the early stages of the Institute’s existence, the progress was very slow.Except in Government establishments catering to War needs, there was virtually no costaccounting in the country. The Defense Ministry realized the important role of costaccountants in industrial activities and this led the Ministry to encourage people in itsemployment to pass the Institute’s examinations. The Ministry also deputed candidates toreceive training in the Institute’s training center at Calcutta. With the cessation of the War, alarge number of Government employees became surplus hands. Some cost accountants were drawn to private industry, which soon began to feel advantage of employing them. Costaccountancy started to gain ground in industry.

The sub-continent achieved independence in 1947 after a historic, long and heroic struggle.India was partitioned and Pakistan was carved out as a new independent state on 14th

August 1947. The new state continued with the same accounting practices, rules andregulations that were in force when the British authorities departed. In the same way, theGovernment of Pakistan adopted the Auditors’ Certificate Rules 1932 for regulating theprofession of accounting in Pakistan. These rules provided the conditions relating toeducation and training that made a person eligible for registration as a professionalaccountant.

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The profession of accountancy started to grow slowly under these rules. Some of theRegistered Accountants established their practicing business and some of them preferred towork in the accounts and finance departments of private firms. However, the practicingRegistered Accountants were mainly involved in the work of accounting. They had to carryout auditing jobs in compliance with legislations such as the Companies Act, 1913, Civil andCommercial Codes and Auditors’ Certificate Rules 1932 (subsequently 1950). But there wereserious problems of education and training of professional accountants. The PakistanCouncil of Accountancy, which was established under the Auditors’ Certificate Rules 1950,could not adequately fulfil its responsibilities. In view of this, the Pakistan Institute ofAccountants was formed in 1950 as an independent body to safeguard and promote theinterests of Registered Accountants. Its membership was restricted to RegisteredAccountants and to them only.

Cost accountancy, on the other hand, found itself in the wilderness in the new country. It hadvirtually no separate existence, no teaching arrangements, no professional recognition, noinstitutional framework and only a few practitioners. But the need for it was unmistakablythere and it was becoming pressing and urgent as Pakistan was starting to break ground inthe virgin field of industrialization. The upcoming industries and expanding commercerequired qualified cost and industrial accountants. The London Institute was there to serveas a model and there was the Calcutta precedent to follow. There were also at least a fewdedicated men of relevant experience. The stage was all set for a new initiative and it didcome in 1951 – within less than four years of Pakistan’s coming into being.

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Chapter Two

A Sapling Planted

The date: 23rd May 1951. The place: Karachi, the capital of the newly born state of Pakistan. Inthe scorching sun of a hot and humid summer afternoon, a young man came out of theVictorian-style splendid red-stone building of Chief Court, now the Sindh High Court.Holding tight in his hand a folder, he hurried towards the nearby office of his boss, his gaitexhibiting excitement and his face radiating with joy. He wanted to be with his boss in a winkto break to him the good news – the news that his and his friends’ dream had at long lastcome true. In the folder in the young man’s hand was an official certificate to that effect.

The young man’s boss was Mr. M. Shoaib, Financial Advisor on Communications to theGovernment of Pakistan and the certificate was the Certificate of Incorporation of thePakistan Institute of Industrial Accountants under the Indian Companies Act VII of 1913 (asapplicable to Pakistan). The Certificate, bearing No. SIND 856 of 1951-1952, was signed byRegistrar of Joint Stock Companies for Sind. It read:

“I hereby certify that The Pakistan Institute of Industrial Accountants is this dayincorporated under the Indian companies Act, VII of 1913 (as applicable to Pakistan) and that the Company is Limited.

Given under my hand at Karachi this twenty-third day of May, one thousand nine hundredand fifty-one.”

SignedRegistrar of Joint Stock Companies for Sind,

Karachi.

These few lines heralded the turning into reality of the vision of a group of seven friendspropelled into action by a keen desire to provide sustainable institutionalized assistance forthe development of industries in a country which had just been born. The point calls for some elaboration to bring home the real value and significance of what those seven visionaries hadset out to create and why.

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Background:

When Pakistan came into existence in 1947, the economy the new state inherited wasbasically agricultural. More than 80% of its population living in the rural areas earned itslivelihood from agriculture. The country’s major crops were rice, jute, cotton, wheat andsugarcane. But the country had negligible industrial base. There were only a handful ofindustries to manufacture goods from the raw material the fertile lands produced or to usethe natural resources the country was bestowed with. The contribution of industry towardsGDP in 1949-50 was only 7.7 percent.

The nascent Government was struggling to establish itself in almost a vacuum. Even suchbasic equipment as chairs, desks, typsewriters and so on was so meagre and scattered as to be virtually non-existent. There were no buildings suitable to house government offices; only afew vehicles and a weak, limited and unreliable communication network. To top the list ofthe teething problems of the new state struggling in the virtual absence of resources intrained men and material was the Herculean task of providing food and shelter to themillions of immigrants from India. Without going into the details of what problems theGovernment and people of Pakistan had to face in the initial years – which is now well-known history – suffice it to say that, on achieving independence, few countries in moderntimes must have confronted hardships and difficulties of the order and magnitude as didPakistan.

In those testing times of empty coffers but high expectations, it was of utmost importance tourgently encourage and promote business and commerce and to initiate a process ofindustrialization and utilization of the natural resources that were available. If the economyof the country was to be put on a sustainable sound footing, industrialization was the key.

The Government was quick to realize this and, within months after independence, organized an Industrial conference. The main aim of the conference was to encourage the investors toset up industries based on locally produced raw materials like jute, cotton, sugarcane, hidesand skins. The Government also established some institutions in the public sector to providedirect help and assistance for the rapid development of industries. Such institutions, set up as early as 1948, included the Development Bank, Industrial Finance Corporation andIndustrial Investment and Credit Corporation. Besides the Government’s keenness andsense of urgency to see new industries come up, the market also demanded and dictated thesetting up of particularly consumer goods industries. It was a huge, demanding open marketoffering unlimited virgin field. What else could the potential industrial investors ask for?

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Chapter Two: A Sapling Planted

A process of building and developing industries on an intensive scale soon began and wasfurther intensified with each passing year. Many large and modern plants were establishedand were expanding with the latest in equipment and technical processes. Banks and bigcommercial concerns also began to spring up across the country. And that was just thebeginning – the beginning of what promised to be a fast, un-ending and vibrant process ofindustrial growth.

The Idea:

It was against this background of Pakistan’s struggle for economic survival in its formativeyears that a group of seven friends, all accountants, met in Karachi in the winter of 1951,hardly four years after partition, to think of ways to provide sustainable professional support to the country’s just initiated industrial advance. They had several brain-storming sessions to analyze the needs, define possible solutions and fine-tune their ideas. The unmistakableconclusion they finally reached was that Pakistan’s rapid advance in commerce and industrywas in dire need of large numbers of qualified persons having wide knowledge of businessaffairs and a particular knowledge of the firm with which they were to be engaged, includingits organization, its product and its methods of production, its handling of materials, labourand overheads, its compilation of costs, its income tax matters, and the interpretation of itsaccounting data to management.

They were convinced that no industrial concern of any size would be able to succeed in itsendeavours without the data and advice which flows from a well-organized accountingdepartment. Not only is its value in the historical accounting data, which is normallydeveloped from the records, but equally in the inherent control of the costs of production and the facility with which it makes possible sound forecasting and planning for the future. Andin meaningfully planning for the future, the cost data usually collected for product- pricingand the preparation of financial statements has to be combined with industry-specifictechnical knowledge to improve operating practices, that is, to create greater efficiency bychanging established technical, organizational and administrative methods with new ideasgenerated through cost awareness.

The group could foresee that the expanding industrial sector would soon be faced with newchallenges and problems. Some industries were still fortunate enough to continue to enjoysomewhat of a protected market and to maintain an enviable profit position. However,others were already beginning to feel the effects of competition from both at home andabroad, with the added complications of big business and, in many cases, a reduction in theprofit margin. Many businesses were already finding a much greater necessity for efficientorganization and operations, and the necessity of more closely matching costs of production

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with the reduced or restricted possible income sales. Many were already faced with thenecessity of competing in both home and foreign markets on the basis of price and quality,and that trend was bound to become more and more pronounced as industries grow,government protection lifted and manufacturers necessarily search for new and widermarkets. Not only would this increased emphasis on costs and efficiency require up-to-dateplants and equipment but, even more important, it would emphasize the need for morequalified and highly trained personnel. It was the education and training of such personnelthat those dedicated men were most concerned with. Founding an institution on the lines ofthe Institute of Cost and Works Accountants, London was the logical answer. Let us hearfrom the horse’s mouth the story of how these men set out to start a new profession in acountry where it had not existed. Mr. Mumtaz Mirza, a past President of the Institute, in anarticle in the Fund and Bank Review, “Finance and Development”, Volume III, Number 3 ofSeptember 1966, wrote:

“ I, as one of the seven Pakistanis in the group, shall relate some personal experiences. It wasthese experiences, which I shared with Mr. Mohammed Shoaib, which led us to follow thecourse that we took from 1947 onward. We had both had, over the years before partition, anintimate experience of rapid industrialization, for we had been mainly responsible duringWorld War II, for financial accounting in the Indian Ordnance Factories in what had thenbeen a united India. These munitions factories had multiplied in number between 1938 and1945 and their output had expanded considerably.

“ As we are accountants, Mr. Shoaib and I were not disposed to underrate the importance ofaccountancy; indeed, the war years revealed to us afresh, almost every month, how vital onebranch of the profession, cost accountancy, is in a rapid industrial expansion. CostAccountants, who are more correctly known as Industrial Accountants, are fully trainedprofessionals. They differ from their colleagues, known in many countries as chartered orcertified public accountants, only because in their training they concentrate not so muchupon auditing as upon the management side of accounting. They are, however, required tohave a thorough understanding of industry and in particular of the business of thecorporation that employs them, often with some such title as Controller or Chief Accountant.Without the information that industrial accountants elicit and present in an intelligible form,industrialists quite literally do not know what they are doing. They cannot compare theefficiency of different factories, different classes of labour, different machine tools. They runthe risk of wasting scarce skills and materials – indeed they can hardly avoid doing so.

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“ Since we had had such recent, extensive experience of the importance of cost accountancy, Ido not think we can claim any special prescience in deciding to bring into being a newprofession in Pakistan. Indeed, as I look back, I can see that the way in which ourdetermination to do this as based on practical experience, was an important factor in thesuccess achieved. We did not have to pick and choose among possibilities; there was noquestion of “project identification”. Our project was staring us in the face”

And their object materialized on 23rd May 1951, with the incorporation of the PakistanInstitute of Industrial Accountants. Thus was planted a sapling in an unknown soil undernot-so-friendly weather conditions, but with the full realization that if industry andcommerce were to grow, as they were destined to, they shall need the fruits of this plant forhealthy growth. The founding fathers were confident the baby tree they had planted shall, inthe years to come, grow into a strong tree bearing fruits Pakistan’s economy will alwayscontinue to need in the field of management accountancy.

Founding Fathers:

Who were these men of vision? They were seven qualified cost accountants in a population of 80 million. Some of them were the founding members of the Institute of Cost and WorksAccountants of India. Most prominent among them was Mr. M. Shoaib, the founderPresident of the Institute, who was at that time serving the Government of Pakistan asFinancial Advisor on Communications. He was a Fellow member of the British Institute ofCost and Works Accountants and had the practical experience of having founded itscounterpart in India in 1944. Mr. Shoaib was one of the most brilliant and outstanding civilservants and one of the ablest financial experts to join the Government of Pakistan after thepartition of the sub-continent. He subsequently rose to the office of Finance Minister andlater became the Vice President of the World Bank.

In his efforts to establish the Institute, Mr. Shoaib was lucky to have the full support, activeparticipation and unwavering commitment of six distinguished persons in the profession,who shared his ideas and worked diligently to materialize their common dream.

Mr. Mumtaz Mirza, like Mr. Shoaib, was an officer of the Indian Military Accounts Serviceand was, at the time of the establishment of the Institute, serving the Government of Pakistanin the capacity of Financial Advisor on Military Finance. Subsequently, he held higher officesin the Government, rising finally to the position of Finance Secretary. Like Mr. Shoaib, helater joined the World Bank and served there as Executive Director. In addition to the veryactive part he played in the formation of the Institute, Mr. Mirza contributed immensely tothe development of the Institute in its formative phase. He succeeded Mr. Shoaib as President

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of the Institute and continued to serve in that capacity for eight successive years – from 1955to 1962. During his tenure, he made hectic efforts with success to obtain financial grants fromthe Government for the Institute and to secure assistance and technical guidance from theSociety of Industrial and Cost Accountants of Canada and the McGill University of Montrealunder the Colombo Plan.

Another founding father was Mr. Iqbal Ahmad. He had qualifications from both the Instituteof Cost and Works Accountants of London and that of India. In 1951, he was working as CostAccountant in Pakistan Aviation Ltd. An agile and dedicated worker, he was elected theNational Council’s first Honorary Joint Secretary for 1951-52 and was, in the following term,made Honorary Secretary and Treasurer. In 1956, he became the Council’s Honorary General Secretary and held that office for six years. He was elected as Vice President in 1966 andcontinued to hold that office until 1969, when he was made President. He remained President of the Institute upto 1972.

Then there was Mr. M. H. Khan who was a Cost Consultant in Tariff Commission,Government of Pakistan. He served in the first National Council as Honorary Secretary andTreasurer. The Institute could not continue to benefit from this founding member’s skills andexperience for long as he left the country in 1953.

Mr. Rahim Jan was a Chartered Accountant of Lahore. He remained on the National Councilfor the first two terms and then did not seek further election because his professionalpreoccupations did not allow him to leave Lahore frequently.

Mr. N. M. Postwala was yet another member of the founding group. He was an IncorporatedAccountant, who served on the National Council right from day one to 1969. During thisperiod, he was elected Vice President for nine years.

The last of the founding fathers was Mr. R. M. Billimoria, a famous Incorporated Accountantof Karachi. He remained on the National Council of the Institute from its inception to 1962,always ready to contribute his professional abilities and always willing to use his personalcontacts for the benefit of the Institute but never aspiring for any office.

Objects:

The objects for which these men had conceived and founded the Institute were clearly speltout in the Memorandum of Association (Appendix A). Most important among these were:

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(a) To provide a professional organization of Industrial Accountants in Pakistan andgenerally to do all such things as may from time to time be necessary to elevate thestatus and procure the advancement of the interests of the profession.

(b) To provide for training in Industrial Accountancy by arrangement of facilities fortuition and by a system of examinations and the issue of certificates.

(c) To promote and foster in commercial circles, engineering profession and academicinstitutions a higher sense of the importance of a knowledge of systematic and correctIndustrial Accounts, and to encourage a greater degree of efficiency in those engaged in such work.

(d) To provide opportunities for intercourse amongst the members, and to give facilitiesfor the reading of papers and delivery of lectures and the maintenance of a library andfor the acquisition and dissemination by other means of useful information connectedwith the profession, and to encourage improved methods of costing.

(e) To watch over, promote and protect the mutual interests of its members.

(f) To assist necessitous members, and any of the dependent kindred of deceasedmembers and the widows of members, to act as treasurer and distributor of anybenevolent fund or funds, which may be contributed by members or others for thesepurposes or any of them, and to make any contribution out of the surplus assets orincome of the Institute from time to time to any such benevolent fund or funds.

(g) To hire, purchase, have, hold and dispose of any buildings to be used as an institute,college or lecture rooms, or any other property, real or personal, for the advancement of the above objects or any of them.

(h) To borrow or raise or secure the payment of money, in particular, by the issue ofdebentures or debenture stock, perpetual or otherwise, charged upon all or any part ofthe undertaking, revenue and property of the Institute (present or future) and topurchase, redeem or pay off any such securities.

(i) To procure the Institute to be registered or recognized in Pakistan and other countries.

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(j) To grant pensions or gratuities to any persons who are for the time being, or shall at any time, have been paid officers or employees of the Institute or the relations ordependents of any such persons.

(k) To provide scholarships, prizes, medals or other awards in connection with the subjects of the examinations held by the Institute or otherwise in relation, to the profession ofIndustrial or Cost and Works Accountancy.

(l) To admit men and women alike to membership of the Institute on the same terms andconditions.

(m) To do all such other lawful things as are incidental or conducive to the attainment of the above objects or any of them.

Teething Problems:

Considering these ambitious aims and tasks, the conditions under which the Institute had tooperate in its infancy looked discouragingly primitive. There were no facilities, no textbooks,and only a handful of teachers capable of teaching the basic subjects of accountancy. To topthem all, there was no building to house the Institute.

The first meeting of the signatories to the Memorandum and Articles of Association, then still under registration, was held at Mr. M. Shoaib’s residence – House No. 203-B, E.I. Lines,Ferere Street – and the second in Room No. 37, Old Sind PWD Secretariat Building. Onhaving been formally established, the Institute had to have a permanent home but it did nothave funds to buy office accommodation, what to speak of purchasing land to construct abuilding which, the founding fathers fully realized, was a sine qua non for any instituteworth its name. Having no option available, Mr. Shoaib offered a portion of his residentialhouse to be used as the office of the Institute. Most of the administrative work was carried out from the veranda of the founder President’s residence. This arrangement continued forseveral years.

In the meantime, strenuous efforts were made to arrange funds for meeting the variousrequirements of the Institute. Mr. Shoaib himself met the Finance Minister and requested agrant from the Government to meet the Institute’s initial capital expenditure. He was assured that a suitable grant would be considered “in the first instance”. However, the FinanceMinister, in a rather diplomatic way, also emphasized the importance of trying to collectfunds from industrial and commercial concerns to substantiate eligibility for officialassistance. Efforts were, therefore, launched to raise donations from businessmen. After all,

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they were the ones to be the end-users of the Institute’s crops. These efforts did produce some positive results, thanks mostly to the personal contacts of the founding members. Anencouraged Shoaib announced at a meeting on January 18, 1952: “Now that the Institute hasbeen able to collect Rs. 25,000, the Government should be asked to contribute Rs. 50,000 forthe purpose of constructing a suitable building for the use of the Institute.

While efforts were still underway to find ways and means to arrange a permanent home forthe newly established Institute, Mr. Shoaib left Karachi to join the World Bank. Therecognition of his abilities at the level of the world’s highest financial institution was nodoubt a matter of pride for the young nation but it was also a big loss to the Institute he hadconceived and founded. In his departure from Karachi, the nascent Institute lost not only itsspiritual father and its guiding light, but also the benefit of having at approachable distanceits most highly respected, most prominent and most resourceful member. While these losseswere more or less made good by Mr. Mumtaz Mirza’s continued presence, who succeededMr. Shoaib as the Institute’s President, the loss the Institute suffered in the shape of its officeaccommodation was no less than a bolt from the blue. When the National Council wasinformed at its meeting on 28th January 1956 that a notice had been given by the Governmentto Mr. Shoaib to vacate his house, silence prevailed at the meeting for quite some time.Nobody knew where to shift the Institute’s office. It was a big problem – real and urgent. Allthat the Council was able to resolve in that meeting was “to hire another place at a reasonablerate”.

Seven anxious months passed in utter helplessness and no solution was in sight. Offices were available but at rents the Institute could not afford. Then came to the rescue another founding member: Mr. R. M. Billimoria. He offered a room measuring 16’ x 16’ for the office of theInstitute at a rental of Rs. 75 per month in his own office at Forbes Building at Bunder Road.When this offer was disclosed to the Council members at a meeting on 7th August 1956, all ofthem broke into protracted applause at the thoughtful gesture of one of their own colleagues.The meeting resolved to shift the Institute’s Secretariat to the office of Mr. Billimoria withoutany loss of time.

These make-shift arrangements out of necessity apart, efforts were made in all seriousnessfrom the very beginning to acquire a suitable place to construct the Institute’s own building.And some success was in fact achieved. When Mr. Shoaib was still in Karachi and headingthe Institute, Mr. Mumtaz Mirza had been able to persuade the Ministry of Defence, whom he was serving as Financial Advisor on Military Finance, to give for the Institute a piece out ofthe lands in its possession. The Council was informed of this development in its meeting held on 22nd August 1955. It was informed that land measuring 1,000 square yards, situatedbehind the Holy Family Hospital in Soldier Bazar, had been allotted to the Institute on

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payment of Rs. 30,000 as premium. The Council welcomed the offer but thought the pricewas too high for the Institute which had meagre resources. It resolved to request the Ministryof Defence to charge only a nominal premium from what was essentially an educational andtraining institution. However, the Council was not sure if this plea would find favour withthe Ministry officials. On the other hand, the land offered was most suitably located and thechances of finding an acceptable alternate were not promising. The Council was in no moodto risk missing the opportunity so it decided that, if the Government insisted on payment asindicated, the offer be accepted willy-nilly.

Building physical infrastructure for the Institute was a basic requirement, whichunderstandably engaged a good part of the founders’ attention, but never so much as todistract them from the main objects for which the Institute had been founded i.e. education,training and examinations. Here too, the Institute had to start its activities in vacuum. Therewere no facilities to start coaching classes; only a handful of teachers capable of teaching thebasic subjects of the syllabus and not even a single teacher available for hiring to teach costaccountancy. Then there was the problem of textbooks, most of which were not readilyavailable in the market. Suitable examiners to set question papers and check the answersheets were also not to be readily found. The Institute even did not have a place to conductexaminations at. Add to this list the problem of newness of the Institute. It was a totallyunknown entity in the educational circles and to the student community.

These challenges, though formidable, were not unexpected. The founders, as they set out tofound the Institute, knew very well the magnitude of the problems they would have toconfront and were armed with the will and determination to take the bull by the horns. Howthey did it is an inspiring story of perseverance, dedication and brave survival against theheaviest of odds.

First, the problem of coaching classes. In view of the difficulties in the way of arranging theInstitute’s own coaching classes, it was proposed at the National Council meeting held on18th January 1952 that arrangements be made with some commercial institute to conductthem on behalf of the Institute. When the Council met on 7th April 1953 to discuss starting thesecond session of coaching classes, it was informed that Mr. M. H. Khan was likely to leavethe country and Mr. Iqbal Ahmad was unavailable due to health reasons. They were two ofthe founder members who had taken it upon themselves to take some coaching classes. Thiscreated a difficult situation in conditions that were already not very conducive for teaching.The council, however, did come up with a solution. According to the recorded minutes of themeeting, “the Council resolved that the Karachi Institute of Business Administration run byMr. K. J. Joseph, ACMA and Associate Member of our Institute, be recognized by us forcoaching of our students and the students be diverted to that Institute. The Institute is

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already coaching students for ICWA, London examinations in all subjects of the Intermediate examinations and Mr. Joseph is willing to take classes of our students preparing for theexamination of our Institute. All the registered students of the Institute should be advisedaccordingly.”

To compensate for the inadequacy of systematic coaching, the Council decided in a meetingon 20th October 1954, that occasional lectures be arranged at regular intervals. For thispurpose, prominent accountants were to be requested to give lectures on the subject ofFinancial Accounting from 5th November 1954. Those identified specifically by the Councilwere Messrs Mumford, Mama, Ohlson and Glasgow Clark.

The start of regular lecture classes for students, however, had to wait until a room was finallyhired in B.V.S. Parsi High School in Karachi at a monthly rent of Rs. 100. Regular classesbegan in that room in the evening from 1st November 1955. As qualified teachers were notavailable for appointment, responsibilities of coaching subjects of accountancy had to beassumed by some of the founding members. Teachers for other subjects of the syllabus,mainly part-timers, came from the relevant professions and the Karachi University, mostlylawyers and economists.

Much before coaching classes were conducted, in fact within months after coming into being, the Institute held its first examinations. These were made up by members of the foundinggroup. Since then, examinations have been held twice a year every year.

The Articles of Association of the Institute clearly spelt out that “… no person shall be eligible for admission as an Associate (of the Institute) unless he has attained the age of twenty-oneyears, and has had at the date of his application for admission as an Associate, three years’practical experience of cost accountancy and has satisfied the requirements of the Councilrespecting the qualifying examinations as may be decided by them….” Obviously, theholding of qualifying examinations had to be given the highest place in the Institute’s scheme of priorities.

The second examinations, first of 1952, were held not only at Karachi but also at Lahore,Rawalpindi and Chittagong on 14th April 1952. The first date of admission to them was fixedas 29th February 1952 and a suitable advertisement was published in English newspapers forthe information of potential candidates.

Those being the first regular examinations and necessary arrangements not being in place,the Council had to take extra care to ensure their proper conduct at the appointed time. Itconstituted a committee consisting of Messrs M. H. Khan, Iqbal Ahmad and R. M. Billimoria

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to appoint examiners in time to get the question papers set by them. A bigger problem was ofarranging examination halls. The President, Mr. Shoaib, took it upon himself to approach theVice Chancellor of the Federal University (subsequently re-named as Karachi University) formaking available an examination hall at Karachi. The responsibility of making arrangementsof an examination hall as well as an invigilator at Lahore was given to the Vice President, Mr.Mumtaz Mirza. Mr. Faqir M. Khan, an Associate Member of the Institute at Rawalpindi, wastasked to make these arrangements at Rawalpindi. It fell on the shoulders of Mr. IqbalAhmad to try to arrange for the examination hall and invigilator at Chittagong.

In the circumstances sketched in the foregoing pages, it might be suspected that there wassome temptation to compromise on standards. Far from it, the Council adopted standardswhich were the highest because it wanted the Institute’s qualification to be as good as anyoffered in Europe or North America. The founding members, most of them being themselvesBritish-trained, were determined to equal the standards required of accountants in theUnited Kingdom. The decision to institute and maintain the highest standards appeared tothem eminently rational; if there was in it an element of demonstrating to their departingBritish friends that their absence would involve no deterioration in efficiency, that elementwas quite small and harmless. In any event, having made the decision, the Councilmaintained it without wavering.

It involved a severe and even ruthless regime. The standard of general education in Pakistanwas not as high as in the United Kingdom. All textbooks and other literature were in theEnglish language, and while this language was even then used fairly generally in Pakistan,the national languages of the country were Urdu in West Pakistan and Bangali in EastPakistan, and many students had difficulty in expressing themselves in the fairly technicalEnglish of accountancy. The Institute thus imposed heavy burdens on its students, and in theearly years few were able to carry them.

Attracting students to the Institute was a problem of sorts. Cost and Industrial Accountancywas a new discipline in this part of the world. Few knew about it and fewer realized whatpromise it held as a profession in an emerging industrial economy. Introduction of IndustrialAccountancy as a branch of professional education and projection of the newly establishedInstitute called for a promotional campaign.

But at a time when media campaigns of the kind we see today were a rarity, the job had to bedone by the founding members themselves and that too through personal contacts. Theytravelled from city to city and visited various colleges and educational institutions tointroduce the Institute and inform the students and teachers of its aims and objects throughlectures. During these visits, they also used to distribute brochures and profiles of the

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Institute and answer questions about the job market potential of the new profession, and alsoabout how it was different from Auditing or Chartered Accountancy.

Such personal efforts, though well directed, were not good enough to introduce the subject in the vast and scattered right circles. Realizing this, the Council decided at its meeting on 13th

March 1952 to approach the relevant authorities of the country’s institutions of higherlearning for help in bringing the subject of Cost Accountancy in the main stream ofeducation. It was decided to convince the Universities of Karachi, Sind, Punjab, Peshawarand Dacca to include cost Accountancy in their curricula. To arm the Council members withan additional argument by way of precedent, Mr. Mohammad Shoaib informed them that the University of Bombay had been considering this matter for quite some time, and had evenapproached him to advise them in the prescription of the course and related matters.

The efforts made by the Council did help in increasing student enrolment but their numberswere not sustained in the early years. The following of several courses and the consequentpassing of the examinations constituted a long and difficult task for the students, who weremostly working full days at their regular employment. Some students found great difficultyin purchasing textbooks or providing the necessary deposits for texts issued on loan. Othersdid not have home surroundings or leisure hours conducive to adequate study andhomework necessary for the various courses. Some did not receive much encouragementfrom their employers and could not see much tangible benefits to themselves on thecompletion of their efforts. The fees charged by the Institute were very low and far fromcovering the costs of the courses and instruction, but to many students they presentedserious obstacles. For these reasons, and others, too large a number of students who enrolledin the initial years became discouraged and fell by the wayside. Only one or two a yearbecame APIAs’.

Having established the Institute in Karachi, the founders realized that if it was to be effectiveand impact the growth of industries in the country, it must expand its efforts to every region.Examination centres were accordingly set up at Lahore, Rawalpindi, Hyderabad and Wah inWest Pakistan and at Dacca and Chittagong in the eastern wing of the country.

But these were centres where only the candidates’ knowledge and skills were tested throughexaminations but where no facilities existed to provide them with back-up support andcoach them in subjects in which they were to take the examinations. So towards the end of1956, the Council began to explore the possibilities of starting coaching classes at least atsome of these centres. As a result, coaching classes were started at Hailey College in Lahore in 1957 under the supervision of the Principal, Mr. Hassan, who was paid an honorarium of Rs.100 per month for his extra responsibility. During the same year, coaching classes were also

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started at Chittagong through the help and assistance of the Principal of the ChittagongCollege, Mr. Coffey, himself, an American Cost Accountant and Mr. James Finley. At Wah,classes were started during the following year through the efforts of Mr. F. M. Khan, who was able to enlist, through personal visits, the active support and cooperation of the Controller ofAccounts of the Ordnance Factories for making the necessary arrangements for conductingcoaching in that small town.

Simultaneously with infrastructural arrangements, efforts continued to make textbooksavailable to the students. Being virtually a new discipline, books on Cost Accountancy werejust not available in the local market. Booksellers did not even know what relevant books tostock. The founding members, therefore, had to do a little bit of marketing research on behalfof the booksellers and prepare for them lists of books that would be required by the students.In this, Mr. Iqbal Ahmad played an active role in Karachi and Mr. Faqir M. Khan inRawalpindi. On the directions of the Council, they contacted M/s. Kitabistan, a leadingbookseller and importer in Karachi, and the London Book House in Rawalpindi. Orders were also placed with Kitabistan to arrange books for the Institute, as well as question papers ofthe Institute of Cost and Works Accountants, London.

But despite all these efforts, some prescribed books could not be made available in the market and the students had to experience many difficulties. The Council, therefore, decided in ameeting in January 1952 that in place of books which were not available, such alternate booksbe prescribed as were or could become available in the immediate future. But that did notfully solve the problem. Even books which were available in bookshops were practically outof the reach of most students due to their high prices. The best solution appeared to be to setup a properly stocked library. But the Institute had no place to establish a library in!

Mr. Mumford, a prominent local accountant who used to give occasional lectures to theInstitute’s students and was also otherwise actively involved in the Institute’s activities,contacted the British Council in 1954 and impressed upon them the requirement to buyreference books on Cost Accounting and related subjects for students to read in their library.The British Council agreed.

Subsequently, the National Council considered the question of procurement of books for thestudents of coaching classes in Hailey College, Lahore in particular and students of othercentres in general. It decided to address a circular letter to all the registered students to findout their requirements of books. The Council requested Mr. Mumford to find out, in themeantime, from the British Council whether it would be possible for them to obtain books for the Institute and, if so, at what price. It was decided that the books, if procured, would besupplied to students at cost price.

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Besides procurement on payment, attempts were also made to get books as gifts from foreigncountries and organizations. And these timely endeavours and approaches did producesome results. Gifts of books were received from the Asia Foundation and from the BritishHigh Commission. Out of the books donated by the latter, six copies each of three books –Statistics by Boddington, Economics by Crews and Office Organization by Rowland – weresent to the Principal of Lahore’s Hailey College. Gifts of books from Asia Foundationcontinued to be received upto 1994.

Assistance Under Colombo Plan:

It was around this time that the Canadians became interested in the Institute, thanks to thepersonal efforts of Mr. Mumtaz Mirza who had by then taken over the Institute’s presidency.He had several meetings with Mr. Mills of the Canadian High Commission as well as withPakistan’s Ministry of Economic Affairs for securing the services of instructors and othertechnical assistance from Canada under the Colombo Plan. In December 1956, he reported tothe National Council that Mr. Mills had assured him of full support in this behalf and hadagreed to come for a meeting with the Council members in his personal, and not official,capacity. In view of this promised help frorm the Canadian Government, it was in that verymeeting that the Council decided to step up efforts to start coaching classes in Chittagong,Dacca, Lahore and Rawalpindi.

Mr. Mills met the Council in February 1957. An account of the meeting, as recorded in theminutes, is reproduced below:

“Mr. Mirza welcomed Mr. Mills to the meeting and apprised other members of the Council ofthe interest which Mr. Mills had shown in the activities of the Institute during thePresident’s previous meetings with him. Mr. Mills was told in brief about the aims andobjects of the Institute and was also given a description of the current projects in hand e.g.coaching classes and the construction of the office building. He was told that in respect ofcoaching classes, the greatest difficulty standing in the way of their extension to places likeRawalpindi and Lahore was the non-availability of instructors of suitable experience andknowledge. In this connection, a request had been made to the Ministry of Economic Affairsto secure the services of three instructors from abroad under the auspices of the Colombo Plan.

“Mr. Mills said that he was present in the meeting in his personal and not official capacity.He said that the request for assistance had been forwarded by the Ministry of EconomicAffairs to the Canadian High Commission for being forwarded to Ottawa. He stated that, asfar as he could judge, the application would receive very sympathetic consideration there. Headded that another request for the services of some Cost Accounting experts had been made by

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the PIDC, and he had been thinking whether it would not be possible to set up a consultingoffice of Cost Accounts in Karachi from which benefits could be drawn by the PIIA, PIDC and any other organization in need of Cost Accounting instructions or advice. This proposal wasdiscussed at some length and practical difficulties of this arrangement were brought out. Itwas decided by Mr. Mills that he would discuss the matter further with the officials of thePIDC and hold another meeting with M/s. Mumtaz Mirza and V. H. Mumford.

“Mr. Mirza then expressed his gratification on the fact that the visit of Mr. Mills to themeeting of the Council had helped in mutual understanding of the problems and efforts whichare being made to solve them. The members of the Council then thanked Mr. Mills for beingkind enough to attend the meeting.”

The Canadian High Commission’s genuine interest in helping the Institute and the officialapproaches made by the Ministry of Economic Affairs yielded the most welcome results:Canada scheduled the project for assistance under its Colombo Plan Programme.

In 1958 and 1959, eight young accountants from Pakistan were sent to Canada for full-timestudy. Although they did well, and this in itself was a valuable contribution, the Canadiansfelt that they could offer to the Institute further help. They realized that the number ofPakistanis who were in a position to take advantage of this extended sojourn in a foreigncountry was so small in relation to the needs of that country that some other method oftraining had to be devised. They, therefore, decided that it would be very much better if thetraining of Industrial Accountants in Pakistan could be raised to such a high standard that itwould not be necessary to rely upon that given in any foreign country. That would be a greatadvantage to Pakistan.

A leading Canadian accountant and teacher, Professor Donald R. Patton of McGill, who hadbeen instrumental in founding the Society of Industrial and Cost Accountants of Canada(SICA), and Mr. J. Nelson Allan, one of the Society’s senior officers, were accordingly sent toPakistan to advise the Canadian Government on the best method of implementing theassistance project and to advise the Institute on its administrative and educationalprogramme.

Prof. Patton was a well-known educationist of Canada, who combined the rare qualificationof being an expert in Chartered as well as Industrial Accounting. He held the Queens Medalin recognition of contribution in the realm of Accounting education. He was not totallyunknown to Pakistan. He had come here once before and seen much of the country – bothEast and West wings. He had also seen at first hand many of Pakistan’s newly- establishedindustries and their methods of production. He and his colleague, Mr. Nelson Allan of SICA,

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worked really hard to formulate a sound organizational setup, course contents, case studies,editing of lesson notes, establishment of reference library, preparation of long- term plansand every other matter related to the establishment of the Institute on a sound, strongfoundation. The Canadian experts recommended textbooks, which were provided to theInstitute by the Canadian Government. SICA even provided its own course notes, whichwere adapted to Pakistani conditions.

The various proposals that Professor Patton made, and that were adopted, added up to theformation of a very close association between the young Institute in Pakistan and the well-established Society of Industrial and Cost Accountants of Canada, and, beyond that, withMcGill University. Following Professor Patton, other members of the Society in turnrepresented it in Pakistan, taking up residence here for lengthy periods. Directors andofficials of the Pakistan Institute also paid lengthy visits to Canada.

The result of this close relationship was an immense strengthening of the Institute. Itsprestige and standing was raised in the eyes of the industrial and business sectors and itsqualifications soon came to command good reputation and wide respect.

Canada’s technical assistance continued for eleven long years – from April 1960 to May 1971.And it was a highly successful undertaking. One of the factors leading to its success was thatthe Canadians were content to play an inconspicuous role. The training scheme was alreadyin being and already successful. The Canadian did not have, and did not seek, thepsychological stimulus of providing inspiration or leadership. They accepted goals that hadalready been set, and fitted themselves into an existing framework. Their technical assistance was all the more genuinely helpful for being entirely unostentatious.

On his side, Professor Patton is quoted to have said that the Institute’s eagerness to be helpedseemed to him very important. It led to a willingness to accept advice even when theindividuals being advised were doubtful of its wisdom – they were prepared to try and totake the risks of trying. It meant, too, a spirit of ambition on the part of the students, andpersistence in conditions that were often difficult. Another factor was that what was wantedby the Institute in Pakistan – from the actual content of courses to experience in organizingthem – was exactly what Canada’s SICA and McGill University were equipped to provide.

Reaching Out:

Although the founding of the Institute represented a modest venture in a young countrywithout much of an international profile, it never shied away from reaching out to theinternational accounting bodies. According to the available record, the earliest attempt in

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this behalf was made in July 1956 when the President, Mr. Mumtaz Mirza, wrote a letter tothe International Accounting Congress enquiring about the terms on which the Institutecould join it as a member and participate in its seventh session to be held in Amsterdam,Holland in September 1957. In December 1956, the proposal to send a delegate to theAmsterdam session again came up for consideration and the list of subjects, which wereproposed to be discussed at the meeting, was shown to the Council members who, after some discussion, agreed that the interests of the Institute and the profession in Pakistan would bewell served by participating in the deliberations of the Congress. Three names were agreedupon: Mumtaz Mirza, Iqbal Ahmad and Billimoria. One of them was to be finally selected torepresent the Institute.

When the Council met to make the final selection, Mr. Mumtaz Mirza informed that he hadagreed to go to Holland under the impression that it would be possible for him to combinethat visit with his impending visit to the United States; but since the dates of the Amsterdammeeting and his sojourn to America were not likely to coincide, it would not be possible forhim to attend the Congress session. The Council members felt that it would be a pity if theInstitute could not avail itself of this opportunity of being represented at an internationalcongress and getting introduced to the world fraternity of accountants at so little expense. Incase of Mr. Mirza’s going to Amsterdam on his way to the United States, the cost of travellingto and from Amsterdam would have been automatically saved. The question to decide thenwas whether to send somebody else to represent the Institute. It was pointed out that in viewof the plans for the construction of the Institute’s building during that period of rising prices,it was imperative that the Institute should save as much money as possible and it shouldreconsider its earlier decision to send a delegate to the Congress in Holland. It wasmentioned that Mr. Rahim Jan was going to attend the Congress as the leader of thedelegation of the Pakistan Council of Accountants. Since he happened to be a Fellowmember of the Institute, he could be requested to represent the Institute of IndustrialAccountants also. After some discussion, it was decided that Mr. Rahim Jan should be askedofficially about this and, if he agreed, he should be requested to represent the Institute also.The saving made as a result of this proposal was to be utilized for the purpose of constructing the Institute’s building. What a sorry episode of resource constraints! And what an inspiringexample of judicious use of what little was in the kitty!

A Place Called Home:

In fact, the highest priority of the Institute at that time was construction of a home of its own.Having shifted from Mr. Shoaib’s house to a rented room in Mr. Billimoria’s office, theInsitute still had no place to house its offices, lecture rooms, library, etc. No education andtraining institute worth its name could have possibly continued in such a “shelterless”

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condition for long. The Government had allotted a plot measuring 1000 square yards to theInstitute in Soldier Bazar in 1954. A grant of Rs. 50,000 had also been provided forconstruction purposes. In addition, the Institute had collected from the city’s businessmenand industrialists donations to the tune of Rs. 25,000. Enough funds were thus at the disposalof the Council to start construction. It, therefore, decided at a meeting on 20th October 1954 tohave the construction work started straight away. Building plans were made and gotapproved. Contracts were awarded and within, months, building materials started arrivingat the site. Another of the founding fathers’ dreams began to take concrete shape. Thebuilding was completed in 1960 and the Institute’s office and all its educational andexamination activities were moved to the new building. At long last, the Institute had cometo have a home of its own – a spacious, impressive, purpose-built home.

But what appeared to be a commodious enough premises in 1960, did not take long to fallshort of the fast growing requirements of the Institute whose popularity and standing wererapidly increasing. Number of students grew so much so fast and administrative workexpanded so rapidly, that first an annexe consisting of four class rooms had to be added in1970 and then a whole new block had to be constructed on an additional plot of 169 squareyards adjacent to the annexe in 1975-76, to provide additional space for lectures and offices atthe Head office. But even these additions subsequently proved insufficient and the Institutehad no option but to plan another home. This time, it had to build it entirely out of its ownresources with no help coming from anywhere. And it was ready for the challenge.

After detailed surveys, a piece of land measuring 4500 square yards was acquired from theKarachi Development Authority (KDA) in Block 6, Gulshan-e-Iqbal, Karachi in 1974 for Rs.88,000. After approval of the building plan, construction work started in 1989 and wascompleted in 1992 at a total cost of fifteen million rupees. In the arduous task of getting thebuilding constructed, Mr. Riyaz H. Bokhari, then the President of the National Council, Mr.Mumtaz Abullah, then the Council Vice-President and Chairman of the Building Committeeand Mr. Qaisar Mufti, Council Member, rendered yeoman’s services. Without theirpainstaking efforts, the building could not have been completed within less than three years.

The new campus was inaugurated by Mr. Sartaj Aziz, Federal Minister for Finance on 16th

July, 1992, and the Institute’s Head office was shifted from the old campus in Soldier Bazar tothe new campus in Gulshan-e-Iqbal. All the departments were also moved to the newbuilding during the same year. Apart from administrative offices, the splendid two-storeyednew building has ten lecture rooms, a well-equipped seminar hall, computer centre, library,cafeteria and a ladies common room. An independent wing to house the ExaminationDepartment with modern facilities was added in 1999.

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The Institute had also planned to build a hostel for its students in Karachi. In 1982, it paid asum of Rs. 640,000 to KDA for the purchase of 8,000 square yards of land in Gulistan-e-Johar.However, in 1998, the KDA allotted only 3,950 square yards, half the size of the land actuallyrequired and applied for, putting the plan to have students hostel on the back burner.

The Institute had been equally concerned about raising its own buildings at centres otherthan Karachi. During the year 1969-70, it purchased a plot in Lahore measuring four Kanalsfor Rs 140,000 as well as one at Dacca and started construction there during the followingyear. The building at Lahore got completed in 1973 under the active supervision of Mr. RiazBokhari, Chariman, Building Committee and Mr. Mohammad Iqbal, Director, Lahore Centreand classes commenced there from the academic year 1973-74. It was formally inauguratedon 27th March, 1974 by the Finance Minister, Mr. Mubashir Hasan.

Another plot, measuring 12 canals, was acquired in 1986 at Raiwind Road to build anadditional coaching centre. No construction on the plot has so far been undertaken.

The Institute’s building at Islamabad was completed in July 1984, thanks to the active interest shown by Mr. Ainuddin Siddiqui, a Council Member, who got it constructed with limitedfunds without much help or contribution from anywhere. Classes were started there fromthe winter session that year. The building underwent major renovation and reconstructionwork in 1992-93 with welcome donations from private industrialists, like Mr. Ahmad Daud,Mr. Farooq Dadabhoy, Al-Karam Textile Mills and the Prudential Group. An auditorium, anew library, six new class rooms, a computer centre, council room, ladies common room,cafeteria, mosque and two guest rooms were added.

Multan also received a ICMAP building in 1996, the credit for whose construction goes to thesole efforts of Mr. Khalid Mehmood, Chairman, Multan Branch Council and to the generousdonations from the Colony Group.

The distance from the veranda of the founding President’s house in E. I. Lines to the presentmagnificent campus in Gulshan-e-Iqbal took the Institute forty years to traverse. It has been a journey that signifies not merely remarkable development of physical infrastructure but,more importantly, tremendous progress towards achieving all the educational andprofessional objectives for which the Institute was brought into being.

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Chapter Three

On the Statute Book

The sapling planted in 1951 had, by 1966, taken firm roots and was happily growing into ahealthy tree. But its status was still that of a registered company and those who had planted it knew fully well that with that status it would always remain vulnerable to the vicissitudes ofchanging times and would have to struggle under certain inherent constraints andlimitations. The Institute had undoubtedly come of age and was well set on the course to abright future. It was time for it to be accorded the lawmaker’s approval and be placed on thestatute book. The founding fathers could imagine that, if re-constituted through an act ofparliament, not only would the Institute gain a permanent statutory status and henceenhanced standing and stature but the profession of Cost and Industrial Accountants wouldalso come to be regulated and recognized with legal sanctions behind it. And at least two ofthe founding fathers were at that time placed in positions where they could make it happen.Mr. Mohammad Shoaib was the Finance Minister of Pakistan and Mr. Mushtaq Ahmad washeading the Institute.

The Act:

At Mr. Shoaib’s initiative and under his guidance and with Mr. Mushtaq’s painstakingefforts, well -supported by his Council colleagues, work earnestly started on drafting a billfor presentation in the National Assembly of Pakistan. First draft, second draft, many moredrafts, rewritings, revisions, vetting by the Ministry of Law and finally the Cabinet’sapproval for moving the bill.

The bill ” to make provision for the regulation of the profession of Cost and IndustrialAccountants and for that purpose to establish an Institute of Cost and IndustrialAccountants”, was finally moved in the National Assembly by Mr. Shoaib on 27th July 1965. It was explained in the introductory part of the bill that “the national interest of Pakistan inrelation to the achievement of uniformity …… requires central legislation in the matter”. Thestatement of the bill’s ‘objects and reasons’ read as follows:

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“The increasing tempo of industrialization in the country and the drive for maximumearning through export of semi-processed and finished goods instead of primary producehas focused attention on the maximum use of labour, material and other resources atminimum cost. It is now recognized that this can be ensured only by a proper system ofcosting operated by qualified and experienced personnel.

“Examinations in Cost Accounting are at present held in Pakistan by two Institutes, namely,the Pakistan Institute of Industrial Accountants and the Institute of Cost and WorksAccountants, London. The London Institute, however, does not provide coaching facilities,nor is it in a position to keep a watch over the professional conduct of its members inPakistan.

Another Institute of International Cost and Works Accountants functioned in Pakistan for awhile, but now has been dormant for quite some time. Sundry persons who have passedexamination by correspondence in certain Institutes of the United Kingdom also claim to bequalified Cost Accountants.

“In the circumstances, it appears necessary to regulate the profession of Cost and IndustrialAccountancy in Pakistan through a statutory body, which can impart requisite standard oftraining within the country, hold examination in the subject, award distinctive designationsto its members and watch and guide their professional conduct. The Bill is designed toprovide for the formation of a statutory Pakistan Institute of Cost and Industrial Accountants for the regulation of the profession of Cost Accountancy.”

The bill was referred to the Standing Committee on Finance, which took about a year tothoroughly discuss it and finalize the report. The Standing Committee’s report waspresented before the House and a motion for its adoption was moved by Mr. MohammadHaneef Khan, Parliamentary Secretary for Finance, on 31st May 1966. A lively debate ensuedin which several members from both sides of the House took part, most vocal among thembeing Shah Azizur Rahman, Deputy Leader of the Opposition, Mr. Hasan A. Shaikh, Mr.A.S.M. Sulaiman and Mr. Md. Yusuf Ali from the Opposition benches and Mr. MohammadHaneef Khan and the Law Minister, Mr. S. M. Zafar, from the Treasury benches.

Shah Azizur Rahman’s main line of argument was that the bill infringed upon the rights ofChartered Accountants and took away from them the right to function as liquidators,trustees, administrators and as representatives for costing. Laws already existed providingfor the profession of Cost Accountancy and there was no need for a new legislation. Heargued that there was no provision for Cost Accountancy in the Companies Act. Moreover,the bill was in conflict with the Chartered Accountants Ordinance, 1961, which made

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Chapter Three: On the Statute Book

Chartered Accountants eligible to report on costing also. He was of the view that the Institutevisualized in the bill would not be of any public utility and would impede and retard thegrowth of industry.

Replying to the objections raised, the Parliamentary Secretary explained that the work of aCost Accountant was quite different from that of the Chartered Accountant and the tworepresented two entirely different realms of services. The Law Minister also advancedidentical arguments, emphasizing that the bill did not bar anyone, including CharteredAccountants, from acquiring the Institute’s qualifications. It was explained that with thegrowth of a society, new problems arise for which new legislations are required. If there wasno provision in the Companies Act for cost accounting, it was all the more necessary to createan institution to promote that concept.

Mr. Haneef Khan argued that every citizen was interested that the country’s industry shouldproduce more with less cost and that was why the bill had been moved to bring down cost ofproduction through the efficient intervention of Cost Accountants. Mr. Md. Yusuf Ali of theOpposition disagreed as he thought that claim was unsubstantial for there was no provisionin the bill for price control and the industrialists would remain free to pocket huge profits.

Taking part in the debate, Mr. A.S.M. Sulaiman pleaded that Cost Acountants with therequisite qualifications working in various industries but not members of PIIA etc. shouldalso be made eligible for automatic membership of the Institute visualized in the bill.

Mr. Hasan A. Shaikh was of the view that in all sectors, where professional examinationswere permissible, the universities should be allowed to step in to conduct courses and holdexaminations. He thought that holding of a professional examination by that particularprofession gave way to nepotism and entailed monopoly, which must be discouraged. Healso pleaded for the inclusion of Chartered Accountants in the profession of CostAccountancy as they had been practicing for many years as such quite effectively.

Mr. Haneef Khan again underlined the vast difference and distinction between CostAccountants and Chartered Accountants and remarked that they were just opposite to eachother in their functions. Elaborating, he said that the Chartered Accountants were there onlyto ensure that the shareholders’ money was not misused, while it was the duty of the CostAccountants to keep the cost of production down in the interest of consumers.

Messrs Md. Yusuf Ali, A.S.M. Sulaiman and A.H.M. Kamaruzzaman moved a motion thatthe bill be circulated to elicit public opinion. The Parliamentary Secretary opposed themotion on the ground that it would unnecessarily delay passage of the bill whereas the

55


Government was keen to speed up industrialization and create efficiency in the industrywithout wasting time. The bill had been published in the Gazette in 1965 and no suggestionfrom the public or comments in the newspapers had been seen in one year. Moreover, the billwas a highly technical subject beyond the understanding of the common man. The Houserejected the motion.

The Deputy Leader of the Opposition moved an amendment, seeking to delete the provisionrelating to Certificate of Practice. His argument was that the Chartered Accountants wereentitled under the existing laws to practice as Cost Accountants and had been functioning assuch for long. Any other certificate for them was wholly redundant and unwarranted. Theamendment was negatived by the House.

Another amendment moved by Shah Azizur Rahman was also rejected by the House. Itrelated to the provision about punishment for a person not being a member of the Instituteand representing to be a member or using the Institute’s designatory letters. After that, theNational Assembly proceeded to pass the bill.

The bill was passed on 30th June 1966 and the President’s assent to it was received on 14th July1966. The Act, called the “Cost and Industrial Accountants Act, 1966”, was published in theofficial gazette on 19th July 1966. It came into force on 20th August 1966. (It was amended in1976 to be known as “Cost and Management Accountants Act, 1966” (Appendix C). Thisstatutory recognition and elevation of the status undoubtedly created a profound effect onthe performance of the Institute and the profession throughout the country.

On the commencement of the Act, the company registered under the Companies Act, 1913, as the “Pakistan Institute of Industrial Accountants” stood dissolved and all the assets andliabilities of the dissolved company were transferred to the Institute established by the Act.Under the provisions of the 1966 Act, all employees of the dissolved company automaticallybecame employees of the Institute.

Rose by Another Name:

At its birth in 1951, the Institute was named as “Pakistan Institute of Industrial Accountants”. When the company so named was dissolved on the commencement of the Act, the Instituteconstituted under this Act was called “Pakistan Institute of Cost and IndustrialAccountants”. Adoption of the word “cost” in the Institute’s name was obviously madetaking cognizance of the fact that the concept of costing had by then gained currency inindustrial establishments and had come to be regarded as a vital aspect of industrialaccountants’ job. The need to clearly distinguish the specialized profession from that of the

56


usual run of the mill accountants might have also played on the draftsman’s mind. Whateverthe rationale, the Institute continued to be known for ten years, from 1966 to 1976, by thename the 1966 Act had given it. Then came a further change of name in 1976.

The Institute originally founded in 1951 was modelled on the lines of the Institute of Cost and Works Accountants of the United Kingdom. That British Institute changed its name twice –first from ICWA to Institute of Cost and Management Accountants (ICMA) and from that tothe Chartered Institute of Management Accountants (CIMA). The obvious emphasis in boththe cases was on “Management” to underscore the increasing involvement of this class ofaccountants in decision-making at the management level. Inspired by the change of name ofthe British Institute and taking note of the changing role of industrial accountants inPakistan, members of the Pakistani Institute also began to feel strongly in favour of a changeof name. This issue was discussed in several meetings of the Institute’s Council but, in amatter directly affecting all the members of the Institute, the Council did not want to gosolely by the wishes of its own members. It, therefore, issued a circular in October, 1973 to allthe members of the Institute, inviting them to give their views in the matter and, if theyfavoured a change of name, to suggest a suitable name. This was the first time ever that theCouncil held an opinion-poll before taking a decision. In response, an overwhelmingmajority of members voted for changing the name and most of them favoured adoption ofthe name “Institute of Cost and Management Accountants of Pakistan”. The opinion-pollresults were considered in a Council meeting and it was decided unanimously that theInstitute’s name be changed to “Institute of Cost and Management Accountants of Pakistan”and the designatory letters of Fellows and Associate to FCMA and ACMA respectively.

These recommendations were again presented to the members for final approval and againtheir overwhelming majority voted for the proposed change. But the desired changes couldnot have come about simply by asking or, for that matter, by a resolution of the Council. Thename had been decided in the Act under which the Institute was constituted. Changes in theprovisions of the Act could only be made by an act of Parliament. The Council could onlyrequest the Government to take another bill to the Parliament, to provide for therecommended amendments in the original Act. This request was made in March 1975 andthe same long drill had to be followed, taking over six months to complete. Finally, theFinance Minister, Rana Mohammad Hanif Khan, moved an amendment bill in the NationalAssembly on 11th November 1976. It was titled “The Cost and Industrial Accountants(Amendment) Bill, 1976”.

Explaining the objects and aims of the bill, the Finance Minister said that the Institute’snomenclature and the designations used by its members were causing confusion, as thosewere different from nomenclatures and designations in use in other countries. That being the

57


case, members of the Institute found it very difficult to explain the exact nature of theirqualifications to other peoples, particularly to foreign employers. It was, therefore, necessary to remove the confusion, for which the views of the Institute’s members had been ascertained in a democratic way. Accordingly, the Institute had suggested changes in its name anddesignations to bring them in line with nomenclatures used in other parts of the world.

Three Assembly members – Mr. P. K. Shahani and Mr. Ghulam Nabi Chaudhry of theTreasury benches and Prof. Ghafoor Ahmad from the Opposition – spoke on the bill, allsupporting it and in fact appreciating the proposed amendment.

Mr. Shahani described the initiative as a wise move and hoped that the accounting profession would thus be enabled to help in the resolution of many management problems being facedby the private sector as well as the general public. He also hoped that the bill would enablethe profession to play a very useful part in the management of all tax enterprises, eventhough they might not be industrial.

Supporting the bill, Mr. Ghulam Nabi said that the Institute was imparting education andtraining in Cost Management, which would help raise the country’s industrial managementto international level and could also solve the many problems faced by smaller units inproducing goods at competitive prices.

Prof. Ghafoor Ahmad, in his speech, pointed out that mere annual audits were not enoughand it was necessary for management to continue to receive round-the-year usefulinformation from Cost and Management Accountants for better and more effective decision-making. He suggested that the Government should give necessary encouragement to theInstitute and extend to its members recognition such as they deserved.

The National Assembly passed the bill on 16th November 1976. It also had a smooth sailing inthe Senate where it was adopted without discussion. The bill received assent of the Presidentof Pakistan on 26th November 1976. From that day onwards, the Institute came to be knownby its new name: Institute of Cost and Management Accountants of Pakistan.

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Chapter Four

At the Helm: The Council

The apex body steering the Institute is its Council. It conducts and manages the Institute’sbusiness and affairs, formulates the policies which govern its functioning, and uses all thepowers, authorities and discretions for having an effective control on its activities and, on ahigher plane, for developing the profession of Cost and Management Accountancy,elevating its status and advancing its interests.

The Articles of Association (Appendix B), with which the Institute was originallyincorporated as a registered company, defined the Council as “the Governing Body of theInstitute”. And the Cost and Management Accountants Act, 1966, which now governs theInstitute, describes the Council in these words:

“There shall be a Council of the Institute for the management of the affairs of the Institute and for discharging (its assigned) functions.”

Composition:

Under the Articles of Association, the Governing Body, the Council, consisted of:

(a) The 1st President of the Institute as long he is alive.

(b) The immediate past President of the Institute.

(c) Elected members, not exceeding 12 in number, of whom a minimum of 7 must alwaysbe Fellows of the Institute.

(d) Co-opted members, as provided.

(e) Ex-officio members, comprising the Chairmen of the Branch Councils, as provided.

The co-opted members were those who were co-opted by the Council for special purposes ina limited number “by a resolution passed by a majority of not less than three-fourths of themembers of the Council to hold office for a period upto two years, but to be eligible for re-co-

59

option if desired”. They were not required to be Fellows or even members of the Institute.They were entitled to vote at meetings but not to exercise any other rights of membership.

The ex-officio members comprised the Chairmen of the Branch Councils. While the principalmanagement and general superintendence of the business of the Institute was to be inKarachi, the Articles did provide for the establishment of such branches of the Instituteelsewhere in Pakistan as the Council might from time to time decide. These branches weremanaged by Branch Councils whose heads were called Chairmen.

The Articles of Association had taken care to ensure that the elected members of the NationalCouncil were never outnumbered, They specifically provided that the aggregate number ofex-officio and co-opted members of the Council would always be one less than the number ofthe elected members of the Council.

The composition of the first Council was, however, different from what had been provided in the Articles. It had to be. It came into being when the Institute was still under registration andthere were only the founding fathers to serve the Council – Messers Mohammad Shoaib,Mumtaz Mirza, M.H. Khan, Rahim Jan, N.M. Postwala, R. M. Billimoria and Iqbal Ahmad.Mr. M. H. Khan had left Pakistan for a long period of time, therefore, Mr. Khurshid Ahmadwas included in the Council. This Council was authorized under the Articles of Associationto continue to remain in existence until December 1955.

The 1966 Act provided for a different composition of the Council from what had been givenin the Articles of Association of the Institute as a company. It reduced the number of theelected members from a maximum of twelve to eight and inducted “not more than fourpersons nominated by the Federal Government”. There is no mention in the Act of either theco-opted members or of the Chairmen of the Branch Councils. However, the composition ofthe Council given in the Act, applicable to every other Council, did not apply to the firstCouncil. The Act provided that:

“ The first Council shall be composed of such of the members of the Council of the dissolvedcompany as are entitled to have their names entered in the Register as follows;and everyother Council shall be composed of the following members, namely:-

a) the first President of the dissolved company:

b) not more than eight persons elected by members of the Institute from amongst theFellows of the Institute, and

c) not more than four persons nominated by the Central Government.”

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Chapter Four: At the Helm: The Council

One provision both in the Articles of Association and the Act is person specific. It relates tothe perpetual inclusion in the Council of Mr. Shoaib, obviously in recognition of his being thefounder President of the Institute and all that he did for the profession. The Articles, whilespelling out the composition of the Council, provided that it “shall consist (inter alia) of thefirst President as long as he is alive….” Similarly, it is provided in the Act that “every…Council shall be composed (inter alia) of ….the first President of the dissolved company. “

As to the election of Council members, the Articles had the provision that they were to takeplace at the Ordinary General Meetings. That could have created legal difficulties withregards to the first Council, as it had come into being in a meeting of the signatories to theMemorandum of Association, much before members existed to assemble for an OrdinaryGeneral Meeting. Therefore, a provision was made to validate the creation of that Council. Itsaid:

“Notwithstanding the provisions herein-before contained, the first Council, including office- bearers, shall be elected by the signatories to the Memorandum of Association, at a meetingto be convened by any such signatory and the members of the Council so elected shall bedeemed to be elected as Fellows of the Institute and such Council shall elect the officers at itsfirst meeting and the Council and the officers so elected shall hold office until the 31st ofDecember, 1955 or until a fresh Council and officers have been elected in accordance with theprovisions of these Articles, whichever is later.”

The 1966 Act slightly changed the provision relating to the elections by substituting the word“annual” for “ordinary”. The Act provides that “Election of members of the Council… shallbe held at the annual general meeting of the Institute in such manner as may be prescribed.”It also provides for a tribunal to be appointed by the Federal Government to decide electiondisputes, as also for nomination by the Federal Government in case the members of theInstitute fail to elect any of the eight persons they are required to elect to the Council fromamongst the Fellows of the Institute.

Duration of a Council is three years from the date of its first meeting, on the expiry of which anew Council is constituted. Notwithstanding the expiry of its duration, a Council is requiredto continue to perform its functions until its successor is constituted, whereupon the Councilso functioning stands dissolved.

As to the office- bearers of the Council, the Act provides for a President; a Vice-President; aSecretary; and a Treasurer. They all are honorary office bearers and are elected from amongstthe Council members. Their election is mandated to take place at the Council’s first meeting,within one month of the election of the eight persons from amongst the Fellows of the

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Institute. If the Council fails to elect any of the office- bearers within one month, the FederalGovernment is empowered to appoint any of the Council members to fill the vacancy. ThePresident, who is the Chief Executive authority of the Council, and other office- bearers“shall, subject to their continuance as members of the Council, hold their respective officesfrom the date on which they are elected… until the expiry of the duration of the Council”,which is three years. Notwithstanding the expiry of their term, they are required to continueto perform their functions until their successors are elected by a new Council.

The manner of elections to the Council has been prescribed in the Cost and ManagementAccountants Regulations, which also lay down procedural details of matters relating toelections. The power to make regulations has been conferred on the Council by section 34 ofthe Act. That brings us to the functions and powers of the Council.

Functions:

When the Institute was registered as a company, its objects were defined in theMemorandum of Association. Being the Governing Body of the Institute, it was the primeresponsibility of the Council to fulfil those objects. The Council’s functions were specificallyspelt out in the Articles under the caption “Duties and Powers”. The Council wasempowered to conduct and manage all the business and affairs of the Institute, exercise allthe powers, authorities and discretions of the Institute, enter into such contracts and do allsuch other things, as might be necessary for carrying on the business of the Institute.

When the Institute was made a statutory body, the Council’s functions were defined anew indefinite terms in the Act under a separate section titled “Functions of the Council”. These arereproduced below:

1) The Council shall exercise such powers and perform such functions as may benecessary to carry out the purpose of this Act.

2) In particular, and without prejudice to the generality of the foregoing provision, thepowers and functions of the Council shall include:-

a) the examination of candidates for membership of the Institute and theprescribing of fees for such examination;

b) the registration and training of students;

c) the prescribing of qualifications for entry of persons as members of the Institute;

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d) the recognition of foreign qualifications and training or experience for purposesof membership of the Institute;

e) the refusal, granting and cancellation of certificates of practice;

f) the maintenance of the Register and publication of the list of members of theInstitute and also the names of the members who hold certificates of practice;

g) the levy and collection of fees from members, students, examinees and otherpersons;

h) the removal of names from the Register and restoration to the Register of nameswhich have been removed;

i) the regulation and maintenance of the status and standard of professionalqualifications of the members of the Institute;

j) the carrying out, by financial assistance to persons other than members of theCouncil, or in any other manner, of research in Cost and ManagementAccounting;

k) the maintenance of libraries and publication of books and periodicals, relating to Cost and Management Accounting and allied subjects;

l) the exercise of such disciplinary powers over the members and servants of theInstitute as may be prescribed; and

m) the exercise of such other powers and the performance of such other functions asare required to be, or may be, exercised or performed by the Council under thisAct or Regulations made thereunder.

The Act also confers on the Council the powers to make Regulations. The relevant section–Section 34- reads:

“(1) The Council may, by notification in the official Gazette, make regulations for carryingout the purpose of this Act.

(2) In particular, and without prejudice to the generality of the foregoing powers, suchregulations may provide for all or any of the following matters, namely:

(a) the standards and conduct of examinations under this Act;

(b) the qualifications for entry of the name of any person in the Register as a member of the Institute;

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(c) the qualifications for the purpose of sub-section (4) of Section 5;

(d) the conditions under which any examination or training may be treated asequivalent to the examination or training prescribed for membership of theInstitute;

(e) the conditions under which any foreign qualifications may be recognized;

(f) the manner in which and the conditions subject to which applications for entryin the Register may be made;

(g) the fees payable for membership of the Institute and the standard of professional qualifications of members of the Institute;

(h) the manner in which election to the Council and the Branch Councils may beheld;

(i) the particulars to be entered in the Register;

(j) the functions of Branch Councils;

(k) the regulation and maintenance of the status and standard of professionalqualifications of members of the Institute;

(l) the carrying out of research in Cost and Management accounting;

(m) the maintenance of libraries and publication of books and periodicals, relating to Cost and Management accounting and allied subjects;

(n) the management of the property of the Institute and the maintenance and auditof its accounts;

(o) the summoning and holding of meetings of the Council and Committees thereof, the times and places of such meetings, the procedure to be followed thereat andthe number of members necessary to form a quorum;

(p) recording and certifying minutes of meetings of the Council and the annualgeneral meetings and extra-ordinary meetings;

(q) appointment and removal of auditors of the Institute;

(r) the manner in which the annual list of members of the Institute shall bepublished;

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(s) the powers, duties and functions of the President and Vice-President;

(t) the functions of the Standing Committees and other Committees, and the

conditions subject to which such functions shall be discharged;

(u) the terms of office, and the powers, duties and functions of the Secretary,

Treasurer, and other employees of the Council;

(v) rules of professional and other conducts and the exercise of disciplinary powers

in relation thereto;

(w) the terms and conditions of service of the employees of the Institute, including

persons who have become its employees under Section 29;

(x) the registration of students and the fees to be charged for such registration; and

(y) any other matter which is required to be or may be prescribed under this Act.

(3) All Regulations made by the Council under this Act, shall be subject to the condition ofprevious publication and to the approval of the Federal Government.

(4) The Council shall, as soon as practicable, send a copy of any Regulation made by it toevery member of the Institute.

(5) Notwithstanding anything contained in this Section, the Federal Government maymake the first Regulations of the Council and such Regulations shall be deemed to havebeen made by the Council and shall have effect accordingly.

As provided in the Act, the first Regulations were made by the Central Government in

August 1966. However, considerable changes became necessary with the passage of time to

cater for new requirements. The Regulations were consequently re-made by the Council, of

course with the approval of the Government, in 1990. The new version of the Regulations,

presently in force, was notified on 8th September 1990.

Like the governing bodies of most other educational and training institutions, the real

effectiveness of the Council of the Institute in developing the institution and projecting and

raising the status of the profession of Cost and Management Accounting does not owe as

much to the Council’s legal position or powers as to the competence, professional standing

and dedication and commitment of those who serve on it. Men like the founding members

and those who subsequently joined or replaced them were people of unreserved

commitment and unwavering resolve. They were men of high respect and prestigious

positions in their own right. And they always willingly gave time and expertise to the

Institute and worked with devotion to improve and promote its management and academic

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activities. Even from a cursory glance at the composition of the National Council from 1951onwards, which appears as Table I, anyone in the profession can see, which and how manystalwarts have worked over the years to make their’s an elite profession.

Committees:

For carrying out the various functions of the Council, there exist a number of smallerfunctional units known as Committees. Four of these have been provided for in the Act itself.These are:

a) the Executive Committeeb) the Education Committeec) the Examination Committee; andd) the Disciplinary Committee

According to the Act, the Executive Committee consists of the President, the Vice Presidentand three other members nominated by the Council from amongst its members. TheEducation Committee is composed of the President and such other members, nominated bythe Council from amongst its members, as are prescribed. The third Committee, theExamination Committee, consists of the President, or the Vice President, as the Councildecides, and such other members, nominated by the Council from amongst its members, asare prescribed. The Disciplinary Committee comprises the President and two other members of the Council, one of whom is nominated by the Federal Government and the other by theCouncil.

For having some idea of persons who have so far headed these statutory StandingCommittees and performed four of the Institute’s most important functions, Table II may beconsulted.

In addition to creating the four Standing Committees, the Act authorizes the Council toestablish “such other committees as it deems necessary for the purpose of carrying out theprovisions of the Act”. Their membership is also left to the Council to decide. However, theAct does provide that “the President shall be the Chairman of every Committee of which heis a member and, in his absence, the Vice President, if he is a member of the Committee, shallbe the Chairman”

Non-Standing Committees are formed by the Council, as and when required, to deal withsubjects demanding concerted attention and special handling at a given time. TheseCommittees, therefore, may or may not have permanent existence and may wither away

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when their purpose has been achieved. Having said that, most of the Non-StandingCommittees are seen to have been in existence for term after term, as the subjects dealt withby them are more or less of a continuing and enduring nature. At the end of 2006, there wereten Non-Standing Committees of the Council.

Branch Councils:

Having established the Institute in Karachi in 1951, the Council soon realized that it had toextend its reach to other cities, to be able to effectively serve the purpose of its creation.Examination centres were accordingly set up at five different places in the country. Thesecentres were at first used only for examination purposes, but later Branch Councils wereformed there to administer the Institute’s affairs in the respective areas. This expansion wasprovided for in the Articles of Association, which said: “There shall be Branch Councils forthe management and general superintendence of branches of the Institute where such areestablished”. The Chairmen of these Councils were included in the National Council as ex-officio members. However, with the commencement of the Cost and ManagementAccountants Act, emphasis in the role of the Branch Councils shifted slightly. The Actprovides for their constitution “for the purpose of advising and assisting (the NationalCouncil) in the discharge of its functions”

What else are the Branch Councils required to do? Their functions have been enumerated inthe Regulations as under:

(1) The Branch Council shall at all times function subject to the control, supervision anddirection of the Council and its Standing Committees.

(2) Subject to sub-Regulation (1), the duties of a Branch Council shall include:

a) to advise the Council on the matters referred to it by the said Council and to offersuch other help as may be required of it by the Council;

b) to make suggestions to the Council in connection with matters of professionaland business interest in the area and for raising the standard and status of theprofession and for improvement of the law applying to it;

c) to provide necessary information to the members and to the prospectiveregistered students;

d) to arrange, if found practicable by the Council, for the coaching of candidates, for the examinations of the Institute in the various centres of the Branch area and toappoint local instructors for this purpose;

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e) to maintain an up-to-date and well-equipped library and reading room for theuse of members and students;

f) to promote membership and public relations in the Branch area and the holdingof local public or members meetings, technical addresses, seminars and similargatherings;

g) to engage local office personnel with the previous permission of the Council;

h) to organize a students section for the benefit of the registered students; and

i) to perform such other functions as may be entrusted to it from time to time by the Council.

Branch Councils are constituted at Federal / Provincial Headquarters and at places wherethere are at least 25 members of the Institute. Each Council consists of a) the members of theInstitute stationed in the area for which it is constituted; b) not less than three or more thanfive members elected from amongst themselves by the members of the Institute stationed inthat area; and c) not more than three persons nominated by the National Council. All Fellowsand Associates stationed in the Branch area are eligible for election to a Branch Council. Itsduration is one year from the date of its formation.

In its early years, the Institute had Branch Councils at Lahore, Rawalpindi, Hyderabad andWah. Subsequently, these were constituted at other centres also, but did not always havepermanent or continuous existence at every of those cities. The reason for their off and onconstitution in some of the cities is to be found in the fluctuating number of the Institute’smembers there. A case in point is Hyderabad. Having had a Branch Council upto 1970, thecity lost its entitlement to have a Council and did not have one until 1981. A Council wasagain constituted there in 1982 which survived upto 1989. Since 1990, Hyderabad has had noBranch Council.

Islamabad, the country’s capital, emerged on the scene in 1978 and has had a Branch Councilever since, except for one year – 1989-90. Lahore is the only city where Branch Council hasexisted right from day one. As of 2006, Branch Councils existed at Karachi, Lahore,Islamabad, Multan, Faisalabad, Quetta and Peshawar. Table III presents a clearer picture.

Meetings:

Business of the Council is formally transacted at its meetings. The first meeting of a Council is held within one month of the date of being constituted. Thereafter, the Council is required tomeet at least once in every three months. Notice for the meeting is given to the members a

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minimum of ten days in advance, and, so far as possible, they are also informed of thebusiness proposed to be taken up. However, in case of urgency, the President is empoweredto summon a meeting at any time but is, in that case, required to inform the members of thesubject matter to be considered at the meeting and the reasons for which he thinks the matterto be urgent.

A provision also exists for calling special meetings; but this can be done by the President onlyon receipt of a written requisition by at least one third of the members of the Council for thetime being.

Decisions are taken at the Council meetings by passing resolutions. In the event of differenceof opinion, the votes of the majority prevail. In case votes in favour and against a decision areequal in number, the presiding officer exercises a second or casting vote. Proper minutes ofthe proceedings of every meeting are mandatory to be recorded, containing every resolutionpassed and every decision taken.

Since the first meeting held on 12th March 1951, to the last meeting of calendar year 2006, theCouncil had held 350 meetings. However, for some strange reasons, the meetings are alwaysnot known necessarily by their sequence number. The available record shows that upto the16th meeting held on 20th October, 1954, their numbering did follow the logical sequence, butmeetings held after that date were somehow not called by their sequential numbers. Thepractice of giving a reference number to a meeting stopped altogether from February 1955 toJanuary 1985. It was only restored in May 1985 when the meeting held on the fourth day ofthat month was described as the 104th meeting, whereas in fact it was the 226th meeting to take place. As a consequence, the 350th meeting held on 25th December, 2006 has been recorded asthe 229th meeting.

The highest number of meetings was held in 1961 when the Council met 15 times, followedby 1962 in which 14 meetings were held and 1963 during which the Council met on 12occasions. The Council President in the first two years was Mr. Mumtaz Mirza and in thethird Mr. Mushtaq Ahmad. During most of the years of its existence, the Council has heldmeetings much more frequently than four times in a year as is the mandatory requirement.The list of Council meetings held upto December 2006, given at Table IV, substantiates thepoint.

The Cost and Management Accountants Act, under which the Institute is presently governed and from which extensive quotes appear in this book, and the Regulations made under theAct are legal instruments, regulating the profession of Cost and Management Accountancyin Pakistan. Perhaps these would not have been such comprehensive instruments had the

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Council itself not played the key role in their drafting. True that the bill was moved in theNational Assembly by the Minister for Finance, but he was no other than the founderPresident of the Institute. It was his idea to give the Institute a statutory status and it was theCouncil which, of course, with his guidance, took the initiative to give it a concrete shape.

Presidents:

Mr. Shoaib and subsequent Presidents of the Council did whatever it took to develop theInstitute and bring it to the present position of prestige and respect. It will be in the fitness ofthings to briefly look at the professional life and achievements of the men to whom theInstitute, nay, the profession of Cost and Management Accountancy in Pakistan owes all thatit can today be proud of.

Mr. Mohammad Shoaib(1951-1955 and 1966-1969)

Mr. Mohammad Shoaib, the Founder President of the Pakistan Institute ofIndustrial Accountants, was one of Pakistan’s ablest financial experts whoheld many important appointments including Finance Minister ofPakistan, Vice President of the World Bank, and Consultant to the WorldBank, a position, he continued to hold until his death on 12th May 1976.

Mr. Shoaib was one of the most brilliant and outstanding civil servants to join theGovernment of Pakistan at the time of Partition. He had an outstanding academic career andwas a reputed financial expert. In 1947, he served on various committees to work out thedetails of the Partition, and was Pakistan’s representative on the Joint Defense Council.

Mr. Shoaib was born on September 6, 1905 in Jaunpur, India. He took his Master’s Degreefrom Allahabad University, and joined the Audit and Accounts Services of the Governmentof India. In Pakistan, he served as Financial Adviser to the Ministries of Defense,Communication, Economic Affairs, Planning & Development. In 1952, he was appointed asExecutive Director of the International Bank for Re-construction and Development. In thiscapacity, he represented nine countries, including Egypt, Ethiopia, Iran, Saudi Arabia andAfghanistan.

In the development of accounting profession in the Sub-Continent, Mr. Shoaib’s pioneeringcontribution will always remain outstanding. In 1944, he founded the Indian Institute of Cost and Works Accountants, and was its founder President upto 1948. After independence, hefounded the Pakistan Institute of Industrial Accountants in 1951 and was its Founder

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President. In 1966, when he was Pakistan’s Finance Minister, the Cost and ManagementAccountants Act was passed and life Membership of the Council of the Institute wasconferred upon him. He was again elected as President of the Institute for the years 1966 to1969.

While his contribution to the development of Cost and Management Accounting professionin the Sub-Continent will always be remembered with a sense of gratitude, his dedication tothe whole area of effective accounting for economic development also will not be easilyforgotten.

Mr. Mumtaz Mirza(1955-1963)

Mr. Mumtaz Mirza was the President of the Institute for the years 1955-1963. Being one of the Institute’s founding fathers and having renderedinvaluable services to the development of Management AccountingProfession in Pakistan, as elucidated in other contexts in the book, Mr.Mumtaz Mirza’s tenure as President was one during which the Institute got solidly founded on strong footings, its academic and training programmes and activitieswere refined and consolidated, and its prestige and standing were greatly enhanced.

He had been Secretary, Ministry of Finance, Government of Pakistan and also held otherpositions of importance and responsibility, both in the Government of Pakistan and in theGovernment of pre-partition India. He was born on January 1, 1908 at Lahore and waseducated at the city’s Government College, from where he obtained his Master’s degree inEconomics. Later, he went to England to study at the London School of Economics. Hecompeted, successfully, for the Indian Audit and Accounts Service Examination and startedhis official career on March 20, 1931.

Mr. Mumtaz Mirza served the Pakistan Government in various capacities, including DeputySecretary, Ministry of Finance; Financial Adviser, Military Finance; Joint Secretary, Ministryof Finance; Financial Adviser, Pakistan High Commission in the United Kingdom; Managing Director, Agricultural Development Finance Corporation; Chairman, AgriculturalDevelopment Bank of Pakistan; Chairman, Pakistan Security Printing Corporation; Director,Pakistan International Airlines Corporation; Director, State Bank of Pakistan. He had alsobeen Executive Director of the World Bank. Despite his many and onerous official duties, hemade outstanding contribution to the growth of the cost and management accountingprofession as a founding father, who actively worked for the cause for about two decades.

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Mr. Mushtaq Ahmad(1963 – 1966)

Mr. Mushtaq Ahmad was a Fellow Member of the Pakistan Institute ofIndustrial Accountants and a Fellow of the Economic DevelopmentInstitute, Washington. He was Comptroller and Auditor General ofPakistan.

He was born on 1st July 1906 in India. He obtained his Master’s degree from AllahabadUniversity. He joined the Railways Accounts Service in 1931 and served the Railways invarious capacities, including Financial Adviser and Chief Accounts Officer. He was also aDeputy Secretary in the Ministry of Finance and Finance Member, Jute Board, Dhaka.

As President of the Institute from 1963 to 1966, Mr. Mushtaq Ahmad rendered valuableservices to the profession of Management Accounting. It was during his presidentship thatthe profession was given statutory status and the Cost and Management Accountants Actwas passed in 1966.

Mr. Iqbal Ahmad(1969 – 1972)

Mr. Iqbal Ahmad was President of the Institute for the term 1969 – 72. Hewas one of the senior most accountants in the country, having qualifiedexaminations from both the Institute of Cost and Works Accountants,London and the Institute of Cost and Works Accountants, India in 1945. He retired as Secretary and Chief Accountant of Sui Gas Transmission Company in 1967.

He was one of the founder members of the Institute and its first Honorary Joint Secretary.Mr. Iqbal Ahmad was appointed as Honorary Secretary in 1953 and was elected as GeneralSecretary in 1956, which office he continued to hold upto 1962. He was elected Vice Presidentof the Council in 1966. He had also been Chairman of various Standing and otherCommittees of the Institute. He was born in the year 1912.

Mr. Mohammad Yakub(1972 – 1975)

Mr. Mohammad Yakub was President of the Institute for the term 1972-75,during which he rendered valuable services for the betterment and uplift ofthe Institute.

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Mr. Mohammad Yakub was born on 13th June, 1920 in India. He did his Master’s in Scienceand Bachelor in Law. He passed the final examination of the Indian Institute of Cost andWorks Accountants in 1946. He was a member of Pakistan Military Service and rose tobecome the Secretary to the Government of Pakistan in the Ministry of Commerce. He alsoheld the position of Chairman, Pakistan Insurance Corporation for a number of years. Earlierhe served as Assistant/ Deputy Controller, Army Factory Accounts in India, in the financialadvisory wing of the Ordnance Factories and in the Ministry of Finance of the Governmentsof both India and Pakistan.

Mr. Khurshid Ahmad(1976-1978)

Mr. Khurshid Ahmad was the President of the Institute for the years 1976-78. He was Managing Director of Pak Glass Ltd., Karachi and Rachna Glassand Refractories Ltd., Lahore.

Mr. Khurshid Ahmad was elected an Associate of the Institute in 1951 and a Fellow Memberin 1956. He had been a Member of the National Council of the Institute for 25 years and waselected to all of its offices, ranging from Joint Secretary to President. He had also been theChairman of various Committees of the Institute.

Mr. Khurshid visited Canada on Fellowship granted by the Canadian InternationalDevelopment Agency in 1965. During his stay in Canada, he studied the working of theSociety of Industrial Accountants of Canada, its Regional Offices and Chapters. In 1969, herepresented the Pakistan Institute of Industrial Accountants at the Silver Jubilee Celebrations of the Institute of Cost and Management Accountants, London.

Before becoming a Member of Pakistan Institute of Industrial Accountants, Mr. KhurshidAhmad was an Associate Member of Indian Institute of Cost and Works Accountants. Hewas one of the few qualified Cost Accountants who opted for service in Pakistan at the timeof independence in 1947.

Mr. Riyaz H. Bokhari(1979- 1990)

Mr. Riyaz H. Bokhari was the longest-serving President of the Institute, forthe years 1979-90, and was a member of the National Council since 1970.

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Mr. Bokhari had an outstanding academic career. He was appointed to the then PakistanRailways Accounts Service in 1950 and rose to become the Comptroller and Auditor Generalof Pakistan. During his employment with the Government, he held many other importantpositions and was a member of various commissions appointed by the Government. He hadalso been Chairman of the National Fertilizer Corporation.

During his long tenure at the apex of the Institute, the profession grew at an accelerated paceand initiatives were taken to expand the physical infrastructure at major cities of Pakistan.

Mian Mumtaz Abdullah(1991-1996)

Mian Mumtaz Abdullah was the President of the Institute during theperiod 1991-1996. He was one of the most prolific Presidents of the Instituteand rendered valuable services for its betterment and uplift.

He was born in November 1934 and did his BA and LLB from the PunjabUniversity. He also received higher education and training abroad in Public Finance,Housing Finance, Human Resource Management, Securities Development Markets andElectronic Data Processing.

Mian Mumtaz Abdullah belonged to the Pakistan Audit and Accounts Service where he helda number of posts, including that of External Auditor in the United Nations. He was theChairman of the former Corporate Law Authority (now Securities and ExchangeCommission of Pakistan). He was also President of SAFA in the year 1990 and held manyother important positions, such as Member Council of the Institute of Chartered Accountants of Pakistan, Member Board of Governors of Institute of Strategic Studies, Director of Pak-Kuwait Investment Company, Director of Pak-Libya Investment Company, Director ofSaudi-Pak Industrial and Agricultural Investment Company and Director of NIT and ICP.He also served as Chairman of various Committees constituted by the Government onCompany Law, Trade Marks Act, Securities and Exchange and Monopolies ControlOrdinances, Private Banking and Housing Finance Companies Authorizations, etc

Mr. Mumtaz Abdullah had been conferred a number of honours and awards in recognitionof his meritorious services, such as Gold Medal by the Karachi Stock Exchange in 1993 for thedevelopment of capital market in Pakistan, Roll of Honour by Lahore Stock Exchange in 1994for development of stocks market in Pakistan and Appreciation Award by the IslamabadStock Exchange for the development of capital markets in Pakistan. He has to his credit over40 publications in national and international journals and magazines.

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Prof. Dr. Khawaja Amjad Saeed (1997- 1999)

Prof. Dr. Khawaja Amjad Saeed was President of the Institute in 1997-2000.He is a versatile scholar. He holds two Masters Degrees, in Commerce fromthe University of the Punjab (1959) and in Business Administration fromthe American University of Beirut (1970). He is a Fellow Member of all thesix professional institutes of Pakistan, i.e. the Institute of Chartered Accountants of Pakistan(1966), the Institute of Cost and Management Accountants of Pakistan (1972), the Institute ofCorporate Secretaries of Pakistan (1974), the Institute of Marketing Management (1986), theInstitute of Taxation Management (1988), and the Institute of Chartered Secretaries andManagers (1990). However, that is not all. He holds a Bachelor Degree in Law from theUniversity of the Punjab (1976), and Diplomas in Industrial Accountancy and ProjectAnalysis from London and Bangkok. He went on to obtain his PhD from USA in BusinessAdministration in 1981.

He has over 40 years of teaching experience, having served as Professor and founder Director of the Institute of Business Administration, Lahore for 23 years and as Director, Planning andDevelopment of the Punjab University for 20 years. He has also been Pro-Vice Chancellor ofthe University of the Punjab.

Prof. Dr. Khawaja Amjad Saeed was elected as President of SAFA in the year 1997. He hastravelled widely and represented Pakistan at a large number of international conferences and seminars. His interface of work and contributions extends to over one hundred countries.

A prolific writer, he has authored 30 books and over 700 articles. He has also made a largenumber of presentations in Pakistan and abroad.

Mr. M. H. Asif(2000)

Mr. Muhammad Hafeezuddin Asif, a senior fellow member of the Institute, was the President of the Institute in the year 2000. He has broad-basedexposure, having over 40 years of work experience in the fields of finance,corporate planning, audit, marketing, procurement, insurance, humanresource management and development and research.

He did his graduation in Commerce in 1962 from the University of Sindh, securing secondposition and obtained Master’s degree in Economics from the University of Karachi in the

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year 1965. Later, he successfully completed the CSS and selection process and held a fewpositions as Civil Servant in the Federal Secretariat. However, he soon discovered that he didnot enjoy the work and resigned from the government service to work for corporate sector.He has spent about 28 years in petroleum sector and has held senior positions. Presently, heis Member (Finance) of Oil and Gas Regulatory Authority (OGRA) of Pakistan.

Mr. M. H. Asif has been involved with the management of the ICMAP in various honorarycapacities for over 25 years. He has been Secretary and then Chairman of the Karachi BranchCouncil, Secretary of the National Council and Chairman and member of various nationalcommittees. He was a non-member Director on the Karachi Stock Exchange Board during1998-1999 as ICMAP’s nominee. He also represented ICMAP as Technical Advisor at PublicSector Committee of the IFAC.

He has to his credit more than one hundred papers, articles / columns on professional andother subjects. He has contributed in various professional conferences and courses at homeand abroad, as a speaker / commentator.

Mr. Muhammad Ashraf Bawany(2001)

Mr. Mohammad Ashraf Bawany was the President of the Institute in 2001.He is currently Secretary and Chief Financial Officer, BOC (Pakistan) Ltd., a multi-national company. Mr. Ashraf Bawany had also been the VicePresident of the Institute in the year 2000. As a member of the NationalCouncil, he has been Chairman of various important national committees,including Examination Committee and I.T. Committee. He was alsonominated as Technical Advisor to IFAC IT committee. He has had extensive involvement inthe Board of Governors of the Association of Accounting Technician (AAT) now PIPFA(Pakistan Institute of Public Finance Accountants) as a nominee of ICMAP. After serving asHonorary Treasurer, Honorary Secretary and Vice President, he became President of PIPFAin 1997.

Mr. Ashraf Bawany was born on 2nd August 1958 in Karachi. He has bachelor’s degrees inCommerce and Law and besides being a fellow member of ICMAP, is a fellow of the Instituteof Corporate Secretaries of Pakistan. He has about 20 years professional experience to hiscredit.

He has attended a large number of national and international seminars and conferences as aspeaker/commentator on Finance, Accounting and General Management.

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Mr. Badruddin Fakhri(2002)

Mr. Badruddin Fakhri was born in Pakistan in 1947. He did his graduationin Commerce from Karachi University in 1968. He was admitted as anAssociate Member of the ICMAP in 1976, and a Fellow Member in 1985. Hehad been a member of the National Council since 1996, was elected as VicePresident of the Institute in 2001 and as President in 2002.

He has done various short courses in Finance and Information Technology and also attendeda three months’ residential course in Advanced Financial Management at the StrachclydeUniversity, Glasgow, U.K. in 1984.

Mr. Fakhri was associated with the Education Committee of IFAC as a Technical Adviserduring 1999-2003. He was also elected Vice President of South Asian Federation ofAccountants and, subsequently, as President SAFA in 2004.

Mr. Fakhri has vast and rich experience in the profession of accountancy and finance. He hasheld key positions in the corporate sector of Pakistan and has been working as Director,Finance and Administration in a reputed company since 1993.

Mr. Sher Afgan Malik(2003, 2004 and 2006)

Mr. Sher Afgan Malik is a senior Fellow Member of the Institute of Cost andManagement Accountants of Pakistan. He was elected President in 2003and held that position in 2004 also. He was again elected as President in theyear 2006.

Mr. Malik has 35 years of extensive and diversified work experience in managing,reorganizing and establishing new industrial and trading companies. He has worked inSaudi Arabia, USA, UAE and Pakistan. He has served as Chief Executive of a large businessgroup in Saudi Arabia and had held several important positions prior to that. He wasresponsible for creating several ventures / joint ventures with major multinationalcompanies of South Korea, Japan, USA etc. Mr. Malik also held the position of ManagingDirector, Pakistan International Airlines during the year 2000-2001.

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Mr. Muhammad Rafi(2005)

Mr. Muhammad Rafi, a senior Fellow Member of the Institute of Cost andManagement Accountants of Pakistan, was the Institute’s President for theyear 2005.

Having done his graduation in science from the University of Punjab in 1975, Mr. Rafiqualified the final examination for Diplomaed Associate of the Institute of Bankers inPakistan (DAIBP) in 1979 and then, in 1983, passed ICMAP’s final examination and attainedits Fellow Membership in 1991. Two years later, he qualified the final examination of theInstitute of Corporate Secretaries of Pakistan and gained Fellow Membership of thatinstitution also.

Mr. Rafi has been on ICMAP’s National Council since 1997 and has held various honorarypositions, including those of Vice-President, Secretary and Treasurer of the Institute, and also Secretary of Islamabad Branch Council. He has actively represented the Institute on differentCommittees of the International Federation of Accountants (IFAC) and also served asChairman of ICAP-ICMAP Joint Committee in the year 2003-04.

Mr. Rafi has to his credit over 30 years of experience of working with Pakistan’s reputablebusiness and commercial organizations. Currently, he is General Manager (Finance) ofPakistan’s largest exploration and production company, the Oil & Gas DevelopmentCompany Ltd (OGDCL).

Mr. Rafi has also been a Visiting Faculty Member of the country’s various universities andprofessional accounting bodies, teaching the subjects of Corporate Finance and Management Accounting. He is vastly traveled and has presented papers on professional topics at national and international conferences.

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Chapter Five

Fulfilling Raison D’etre(a) Education

Men who founded the Institute were qualified and experienced accountants. They did notneed to survey the job market or consult a pundit to find out what kind of education wouldmake a good industrial accountant. Their own educational background, association with thefinest professional institutions and practical experience were enough to give them a clearidea of what education to impart to the prospective accountants, what professional skills tobe taught to them and what abilities would their employers-to-be expect to see in them. Theyknew that the students passing out from the Institute would be expected to have a wideknowledge of business affairs and everything it takes to run a profitable industrial orcommercial establishment, be that cost calculation of all factors of production or thecompilation of taxes, be that the interpretation of accounting data or the management’srequirements for sound forecasting and planning. So the founding fathers kept the practicalaspects of the profession in view and, based on them, prescribed the Institute’s syllabus.

Syllabus:

As syllabus is a very significant aspect of any educational scheme, because it reflects thescope as well as level of the course, the founding members took pains to ensure both thesequalities. They prescribed a syllabus in 1951 that emphasized an understanding of CostAccountancy and Advanced Costing in-depth within the framework of accountingprinciples on the one hand, and knowledge of subjects like Economics, General CommercialLaw and Industrial Management on the other. The syllabus was divided into two main parts:Intermediate and Final. Both these parts were, in turn, further divided into two parts, each tobe known as Intermediate Part I and Part II and Final Part I and Part II.

It is interesting to note that the Institute of Cost and Works Accountants, London toodeveloped a syllabus having similar qualities a year later – in 1952. All the core and othersubjects of the two syllabi were more or less similar to each other. The Pakistani Institute

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continued with its syllabus upto 1962, whereas the London Institute’s syllabus remainedeffective until 1963.

PIIA’s syllabus, introduced in 1951, had the following subjects:

Syllabus 1951

Intermediate (Part I)1. Statistics (One paper – 3 hours)2. Economics (One paper – 2 hours)3. General Commercial knowledge (One paper – 2 hours)4. Accountancy (One paper – 3 hours)

Intermediate (Part II)1. Production Engineering (1 paper – 3 hrs)2. Costing (4 papers – 2 hrs each)

Final (Part I)1. Industrial & Commercial Law (1 paper – 2 hrs)2. Auditing & Income Tax (1 paper – 3 hrs)3. Advanced Accounting (1 paper – 3 hrs)

Final (Part II)Industrial Management (1 paper – 3 hrs)Advanced Costing (3 papers – 3 hrs each)

As it was the first syllabus of the Institute, it will be interesting to look at the course contentsof the two core subjects. These are reproduced below:

Intermediate - Part IICosting: (Four papers - 2 hours each)

Labour – Paper I

Remuneration: Methods of remuneration, Fixing of wage rates, Incentives and payment byresults, Effect on remuneration of defective work.

Records: Records of engagement, grading, absence, lateness, overtime, night work, transferand dismissal. Time and work recording. Job records, Wage computation and payment,

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Chapter Five: Fulfilling Raison D’etre (a) Education

Computing and verifying earnings, Routine of payroll, Voluntary and statutory deductions,Wage summaries.

Classification and Collection: Classification, allocations to jobs and departments, Analysisof wages.

(ii) Materials - Paper II

Control and Storage of all materials, Purchase and manufacturing specifications;Components lists. Routine of issue of purchase orders and receipt of goods; Checkingspecification and quality; Maximum/minimum stocks re-order level; Store-keeping system;Stores for work-in-progress, finished goods, tools, patterns and maintenance of plant,Treatment of defective materials: Centralized, decentralized and sub-stores, Prevention andelimination of waste.

Records: All forms and records (for the receipt, control and issue of all materials).

Classification and Collection of Costs: Method of pricing classification and analysis oftransactions. Stock Ledgers; Waste.

(iii) Overhead Expenses – Paper III

Overheads: Production, Selling, Distribution and Administration:

How classified, collected, apportioned and allocated?

(iv) Methods of Costing – Paper IV

Compilation, Summarizing and control of accuracy of Cost Records, Cost Records of Process, Job or Terminal, Operating or Working, Single Output, etc., costs.

Financial and Factory statements and summaries, Asset Records, Cost Journals and Ledgers,Operating Statements for Processes and Departments, Reconciliation of Cost and FinancialAccounts, Control Accounts.

Final Examination Part IIAdvanced Costing: - 3 Papers of 3 hours each

Covering the advanced aspects of the subjects set out in the Intermediate Syllabus forCosting, with special reference to the following:

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Compilation of Costs: Application of costing methods and techniques (including Budgetary Control, Standard Costing and Marginal Costing) to manufacturing, wholesales, retail,distribution, business and public undertakings and local authorities. Cost control accounts.Costing of by-products. Treatment of waste in Cost Accounts. The mechanization of CostingRoutine.

Organization and Presentation: Organization of Cost departments and its relationship toother departments. Cost Audit, design of methods and the drawing up of forms throughoutthe costing organization in works and offices. Presentation of Costs. Costing Statistics andComparative Cost Budgets. Relation of Standard and Actual Costs. The effects of averagingCosts and the choice of the unit of measurement. Graphical and statistical presentation.

Interpretation: Analysis of Variances and their use in relation to control, policy andadministration. The use of Cost information by Management. Stock valuation and theincidence of overheads, influence of idle capacity on Cost. Costing in relation to Price-Fixing.The effect upon Costs of the activities of the technical, production, selling and distributionfunctions.

As can be appreciated, the course outlines of both the subjects reflected the real picture ofprofessional needs. The Costing subject of Intermediate indicated that the students wererequired to undertake comprehensive study and preparation for qualifying four papers. Incase of Advanced Costing of Final, the students had to cover all theoretical and practicalaspects of the subject to pass in three papers.

The Institute’s syllabus could not have remained unchanged for long, in the wake of variouschanges and developments taking place in the discipline of Industrial Accounting as abranch of knowledge, in the realm of Pakistan’s fast growing industrial and business sectorsand in market demands and conditions. The syllabus had to be revised from time to time.The first revision came in 1963. The revised syllabus was divided into three sections i.e.Primary, Intermediate and Final.

All the subjects of the 1951 syllabus were retained but in a revised order and modified format. A major salient point of the revised syllabus was the introduction of ManagementAccounting. The structure of the 1963 syllabus was:

Revised Syllabus 1963

Primary1. Principles of Accounting (2 papers of 3 hours each)

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2. Commercial Law (1 paper – 2 hours)3. Production Methods (1 paper – 2 hours)4. Industrial & Commercial Law (1 paper -2 hours)5. Economics (1 paper – 2 hours)

Intermediate1. Advanced Accounting (2 papers – 3 hrs each)2. Fundamentals of Cost Accounting (2 papers – 3 hrs each)3. Statistics (1 paper - 3 hrs)

Final1. Management Accounting (2 papers – 3 hrs each)2. Advanced Cost Accounting (2 papers – 3 hrs each)3. Industrial Organization & Management (1 paper – 1 hr)4. Auditing & Income Tax (1 paper – 3 hrs)

A second revision was carried out in 1973, with a view to meeting the requisite standards and bringing the courses in line with modern techniques. This time, the syllabus was spread overfive parts instead of three. The Regulations were also amended, in order to provide forrevisions necessary to keep the syllabus up-to-date by including in it the latest in the field ofaccounting, as and when required.

The 1973 syllabus included four new subjects. These were: Business Mathematics;Quantitative Techniques and Data Processing; Office Management and Report Writing; and,Financial Management. Even subjects of the previous syllabus retained in the new versionunderwent revision and updating of their course contents.

The 1973 syllabus was as follows:


Part I1. Accounting I (2 papers – 3 hrs each)2. Economics ( 1 paper – 3 hrs)3. I. C. L. (1 paper – 3 hrs)

Part II1. Cost Accounting (2 papers – 3 hrs each)

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2. P. T. M. (1 paper – 3 hrs)3. B.M.S.T (1 paper – 3 hrs)

Part III1. Accounting II (2 papers – 3 hrs each)2. Off. Mgt. & Report Writing (1 paper – 3 hrs)3. Q. T. D. P (1 paper – 3 hrs)

Part IV1. ACMA (2 papers – 3 hrs each)2. Management (1 paper – 3 hrs)

Part V1. Financial Management (2 papers – 3 hrs each)2. Taxation (1 paper – 3 hrs)3. Auditing and Company Law (1 paper - 3 hrs)

Obviously, such a substantial revision could have created problems for the students.Therefore, it was decided to introduce the new syllabus gradually and withdraw the old onepart by part. The result was that the first examination to be conducted in full accord with the1973 syllabus could only be held in 1977.

The 1973 syllabus remained effective for 12 years. It was revised in 1986 to have the followingstructure: -


Part I1. Accounting (2 papers – 3 hrs each)2. Economics (1 paper – 3 hrs)3. I.C.L. (1 paper – 3 hrs)

Part II1. Cost Accounting (2 papers – 3 hrs each)2. B.C & R.W (1 paper – 3 hrs)3. B.M.S.T (1 paper – 3 hrs)

Part III1. Advanced Accounting (2 papers -3 hrs each)

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2. P. T. M. (1 paper – 3 hrs)3. Taxation (1 paper – 3 hrs)

Part IV1. A.C.M.A (2 papers – 3 hrs each)2. M.I.S. D.P.Q.T. (1 paper – 3 hrs)3. C.L.S.P. (1 paper – 3 hrs)

Part V1. Financial Mgt. (2 papers – 3 hrs each)2. Auditing (1 paper – 3 hrs)3. O & M. M. (1 paper – 3 hrs)

Distinctive feature of the 1986 syllabus were as under :

(i) Production Technology and Management was shifted from Part – II to Part – III.

(ii) Accounting II in Part – III of the 1973 syllabus was replaced with Advanced Accounting in Part – III.

(iii) Q. T. & D. P. of Part – III was shifted to Part – IV with a slight addition in its name asMIS, Q.T. and D.P.

(iv) One new subject C.L.S.P was included in Part IV.

(v) Taxation of Part V of 1973 syllabus was shifted to Part III of the revised syllabus.

(vi) Auditing and Company Law of Part V was replaced with Auditing.

(vii) A new subject of O. & M. M. was included in Part V.

This syllabus remained valid for a number of years, but a need was growingly felt for itsrevision so as to produce proficient CMAs with capabilities commensurate with newchallenges in the field of management accounting. There was also a felt need to increase thevery low percentage of students passing the Institute’s examinations. When the causes wereanalyzed, the following three main reasons were identified:

1. Not all the students join the Institute with management accountancy as their ultimatecareer goal.

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2. There was wide difference in the intelligence levels of the students attending theInstitute’s coaching classes, because admission was granted purely on the basis ofacademic qualifications without any test or interview.

3. The standard of education in the country’s educational institutions had deterioratedconsiderably. The students passing their graduation examination from the collegesand universities were accustomed to a culture of study and examination, which wasaltogether different from the requirement of study for a professional qualification inManagement Accountancy. It was, therefore, considered necessary that they beprovided intensive coaching during their first year of registration with the Institute.

To address all these problems, the National Council approved a New Scheme of Educationand Examination and put it into effect from January, 1994. Following were the salientfeatures of the New Scheme:

Registration of the students was based on an entrance test to be conducted twice a year.

All the students selected for registration on the basis of entrance test were required toattend coaching classes for a Foundation Course spread over 10 months and a total of700 periods.

The policy of granting exemption in some subjects on the basis of subjects passed bystudents in their graduation examination was discontinued.

The ability to express themselves orally and to operate computers with knowledge ofsome of the common software packages was considered necessary for the studentspassing the Foundation Course of the Institute. A provision, thereof, was made in theNew Scheme for oral examination in the subject of ”Communication” and practicalexamination in the subject of “Computer” in addition to the normal writtenexamination.

The contents of the syllabus of different subjects were revised to meet the requirementof modern trends in business and management. The subjects of English Grammar andComposition, Computer, Corporate Performance Evaluation and Management wereintroduced in the scheme of studies for final examination for the first time.

The following Syllabus structure was approved by the Council for the New EducationalScheme, 1994:

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(a) Foundation Course:1. Principles of Accounting (2 papers – 3 hrs each)2. English Grammar and Composition (1 paper – 3 hrs)3. Quantitative Techniques (1 paper – 3 hrs)4. Computer (1 paper – 3 hrs)5. Economics and Business Environment (1 paper – 3 hrs)

(b) Professional - I1. Financial Accounting (1 paper – 3 hrs)2. Cost Accounting (1 paper – 3 hrs)3. I. C. L. (1 paper – 3 hrs)4. B. C. & R. W. (1 paper – 3 hrs)

(c) Professional - II 1. Advanced Financial Accounting (1 paper – 3 hrs) 2. Taxation (1 paper – 3 hrs) 3. P. T. P. M. (1 paper – 3 hrs) 4. C. L. S. P. (1 paper – 3 hrs)

(d) Professional - III1. Management Accounting (1 paper – 3 hrs)2. Advanced Cost Accounting (1 paper – 3 hrs)3. Auditing (1 paper – 3 hrs)4. Management (1 paper – 3 hrs)

(e) Professional IV1. Financial Management (1 paper – 3 hrs)2. Corporate Performance Evaluation (1 paper – 3 hrs)3. M. I. S. (1 paper –3 hrs)4. M. M. O. B. (1 paper – 3 hrs)

Main features of the 1994 Syllabus were as under:

1. Foundation Course was introduced with a view to removing deficiencies, amongstudents, due to faulty education at college level.

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2. New subjects of English Grammar and Composition and Computer wereincluded in the Foundation Course.

3. A new subject, Management, was included in Professional – III.

4. New subjects of Corporate Performance Evaluation and Management InformationSystem were included in Professional IV.

5. Two papers of accounting-based subjects were reduced to one, except the papers ofPrinciples of Accounting.

6. Duration of Course study of the Foundation Course was prescribed to be 10 months.

7. Admission in the Foundation Course was granted to those students who qualified theEntry Test.

The 1994 syllabus, prescribed under the new education scheme, soon fell in need of revisiondue to the fast changing needs, practical difficulties and new technological advances. TheCouncil, therefore, approved a new syllabus in 1998. Its structure was as under:


Foundation – I1. Principles of Accounting (1 paper – 3 hrs)2. Computer System and Application (1 paper – 3 hrs)3. Business English (1 paper – 3 hrs)4. Economics and Business Environment (1 paper – 3 hrs)

Foundation II1. Financial Accounting (1 paper – 3 hrs)2. Information Technology (1 paper – 3 hrs)3. Industrial and Commercial Law (1 paper — 3 hrs)

Professional I1. Cost Accounting (1 paper – 3 hrs)2. B.C & R.W (1 paper – 3 hrs)3. Quantitative Methods (1 paper – 3 hrs)4. Management Science Applications (1 paper – 3 hrs)

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Professional II1. Advanced Financial Accounting (1 paper – 3 hrs)2. Operational Cost Accounting (1 paper – 3 hrs)3. Business Taxation (1 paper — 3 hrs)4. C.L.S.P (1 paper – 3 hrs)

Professional III1. Financial Reporting (1 paper – 3 hrs)2. Str. Management Accounting (1 paper – 3 hrs)3. Orgl. Beh. and Str. Management (1 paper – 3 hrs)4. Auditing (1 paper – 3 hrs)

Professional IV1. Strategic Financial Management (1 paper – 3 hrs)2. Corporate Performance Audit and Evaluation (1 paper – 3 hrs)3. Marketing Management (1 paper – 3 hrs)4. Information Management (1 paper – 3 hrs)

The 1998 revision brought about changes in a number of things of the syllabus thitherto ineffect.

The Foundation Course was divided into two parts i.e. Foundation–I and Foundation–II.English Grammar and Composition was replaced with Business English. A new subject -Information Technology - was included in Foundation – II. The subject of QuantitativeTechniques was replaced with Quantitative Methods. P. T. P. M. was replaced withManagement Science Applications. The new subject of Operational Cost Accounting wasintroduced in Professional II and Organizational Behaviour and Strategic Management wasintroduced in Professional III.

The introduction of the new syllabus was not without problems. It became quite difficultfrom the administrative point of view to conduct examination of two syllabi at a time.Therefore, the National Council, in its meeting held on 4th February, 2001, decided that theexaminations of old students, registered prior to 1998 Syllabus, in the following subjects beconducted according to the updated course outlines of 1998 Syllabus:

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Foundation

Subject Applicable Syllabus

1. Principles of Accounting 19982. English Grammar and Composition 19983. Quantitative Techniques *19943a. Business Communication and Report Writing 19984. Computer 1998 (amended to-date)5. Economics & Business Environment 1998

Professional I

6. Financial Accounting 19987. Cost Accounting 19988. Industrial and Commercial Law 19989. Business Communication & Report Writing 19989a. Quantitative Techniques *1994

Professional II

10. Advanced Financial Accounting 199811. Taxation 199812. Production Technology and Plant Management *199413. Corporate Laws and Secretarial Practice 1998

Professional III

14. Management Accounting 199815. Advanced Cost Accounting *199416. Auditing 199817. Management *1994

Professional IV

18. Financial Management *199419. Corporate Performance Evaluation 199820. Management Information System 1998 (amended to-date)21. Marketing Management and OrganizationalBehaviour *1994

* Students registered under the course of 1994 Syllabus were asked to appear in the examination as per courseoutlines of 1998 syllabus.

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It was also notified for the information of students that under Management InformationSystem, (Information Management) of Professional – IV, there would be a computer-basedpractical examination in Advanced Spread Sheet(s) of 20 marks. All remaining prescribedtopics would be covered in a theory paper of 80 marks. The Institute organized SpecialRefresher Classes for the additional course contents at all its centres where a minimum of 25students were available.

The 1998 syllabus was revised in 2005 and the new syllabus came into effect in 2006.However, the latest examinations held in November, 2006 were conducted under the 1998syllabus. These were the last examinations of that syllabus.

The motivation for these many revisions of the Institute’s syllabus has been nothing else but a search for the best available choices for preparing the students to serve their country’seconomy better and better. The Institute has never suffered from a lack of will to improveupon a choice once made and has always been receptive to new ideas and innovativedevelopments and responsive to emerging challenges and demands. What has guided theInstitute all along in prescribing or revising the syllabus, is a commitment to producingquality professionals, capable of measuring up to the challenges of the given time. Just howwell they serve the country’s economy, depends upon the degree of proficiency they attain.The Institute always encourages them to realize that ‘qualification’ is not the end of learning.It is really only the beginning. The syllabus can teach them upto a certain level. They have tocontinue to improve upon what they learn in the classrooms and to add to that knowledgeand try to gain mastery of their skills. In this lies their enduring worth and value.

In 1999-2000, contents of the Information Technology-related courses were revised, keepingin view the requirements of the International Education Guidelines (IEG-II) of IFAC, in orderto remain compatible with advances taking place in all the important fields of InformationTechnology. The revised courses were made effective from the Summer Session of 2001.

During the following year, the Institute, being pro-active and interactive with thedevelopments taking place in trade and profession both at the national and internationallevels, initiated some major reforms in its Educational Delivery System. Some of them were:

A process of restructuring the syllabi was initiated. Using a modular approach, facultyand experts were requested to review the syllabi of Foundation stages; to be followedby updating of syllabi of Professional stages. The syllabi restructuring process was

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quite responsive to International Education Standards issued by IFAC, as well as, tolocal needs.

A course was designed to enable the students to equip themselves with skills necessaryto effectively meet the challenges of the 21st century.

In order to provide an opportunity to students, who wished to enter the stream ofICMAP after passing Intermediate Examination, a Bachelor’s degree programme inManagement Accounting was developed.

The Institute made plans to embark upon an Internet-based Distance LearningProgramme, which is expected to revolutionize the delivery of professional accountingeducation in Pakistan. Using information and communication technologies to theirfullest advantage, the programme would fortify the existing education delivery system and extend its reach to far-flung parts of the country. This was developed keeping inview various pros and cons of the course and in line with the IFAC’s recommendations.

The Council also decided to introduce focused study material for students to help them prepare more effectively for their Foundation and Professional examinations.

A protocol for classroom presentation was developed and was implemented at allcentres. The objective of the presentation is to develop communication andpresentation skills of the students and build the level of their confidence.

In order to create discipline in the learning environment and foster a professionalculture, codes of conduct for both students and faculty were developed.

Entrance Requirements:

Like the syllabi and course contents, the Institute’s entrance requirements have also beenundergoing changes from time to time in pragmatic consideration of the prevailing objectiveconditions and, more importantly, in direct relation to the imperatives of maintaining a highstandard of education in the Institute, which is intrinsically linked to the quality of intake.

In the early years, the Institute could not afford to be much choosy about who seeksadmission to it. It was more concerned with the students’ number than their educationalgrounding. From 1951 to 1967, the Institute welcomed to its lecture classes and itsexaminations all those who had passed their Intermediate, or its replacing Higher SecondarySchool examination, preferably in Economics and / or Commerce. Those who, in lieu of

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Intermediate Standing, had practical Accounting or Cost Accounting experience for at leastthree years were also eligible for admission.

The level was subsequently raised in 1968 when it was made compulsory for every candidate applying to become a registered student to produce evidence that “he (a) is not less than 18years of age on the date of his application (b)(i) has passed the Intermediate Examination ofany University/Board or (ii) an Examination recognized by the Central Government asequivalent thereto or (iii) the Matriculation Examination and has three years’ accountingexperience, or (iv) the Intermediate or Final Examination of the Institute of CharteredAccountants of Pakistan; or (v) of the Institute of Chartered Accountants in England andWales, Scotland, or Ireland, or (vi) of the Society of Incorporated Accountants, London, or(vii) of the Institute of Cost and Works Accountants, London.

The 1968 entrance policy also provided that, in case the registration of students to any lecturecourse was more than the number that could be accommodated, preference would be givento Bachelors of Commerce and to those with higher standing in the Intermediateexaminations.

Entrance requirements were further revised in 1970 to accommodate those students also who had passed the Intermediate examination of other professional institute. The relevant policyclause read:

“Every candidate applying to become a registered student must produce evidence that he:

(a) is not less than 18 years of age on the date of his application; and

(b) (i) has passed the Intermediate Examination of any University/Board; or (ii) anexamination recognized by the Central Government as equivalent thereto; or (iii) theIntermediate Examination of the Institute of Chartered Accountants of Pakistan, or any foreign Institute of Chartered Accountants; or (iv) of Intermediate Examination of theSociety of Incorporated Accountants London; or (v) the Intermediate Examination ofthe Institute of Cost & Works Accountants, London or India; or (vi) the IntermediateExamination of the Society of Industrial Accountants of Canada.”

The educational level of students seeking admission to the Institute was made even higher in1973, when a degree from any recognized University of Pakistan or from any Universityrecognized by the Government of Pakistan was made a compulsory requirement. Then camethe Institute’s New Education Scheme in 1994, which introduced the system of entry tests.The New Scheme provided that a prospective student be required to qualify an entry test,

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designed to assess his aptitude for accounts and the level of his knowledge in this regard aswell as to check his general intelligence and knowledge of English and Arithmetic. Thefollowing rules were framed:

“1. The basic qualification required for appearing in the Entry Test is graduation (B. Com.,B.A., or equivalent foreign qualification as may be approved by the Council), or a studentmust have Senior Cambridge A Level with five passes at the Ordinary and Advanced Levelprovided (i) that two of the passes have been obtained at Advanced Level, (ii) that passes beobtained in mathematics and English language at the Ordinary and Advanced Level, orequivalent qualification.

2. In case a student has appeared in Final Examination of B. Com., B. Sc., or B.A. and iswaiting for declaration of result, he will be allowed to take Entry Test.

3. In case he passes the Entry Test, registration will be granted only when he clears thedegree examination.

4. In case he fails in degree examination, his candidature will be cancelled and he will notbe allowed registration as a student of the Institute.

5. Students having the following qualifications will be exempted from the entry test:

“Intermediate/ Part-II/ Stage–II Examination of the Institute of Chartered Accountants ofPakistan, Institute of Corporate Secretaries of Pakistan, Chartered Institute of ManagementAccountants of U.K., Society of Management Accountants of Canada or any otherprofessional institutions as approved by the Council/Master’s degree/Part-I of FoundationCourse of ICAP, subject to holding graduate degree/Intermediate of AccountingTechnician/B. Com. with 60% marks and 3 years post qualification experience in anycommercial organization.”

The classes of Foundation Course were started at Karachi, Lahore, Islamabad, Quetta,Multan and Peshawar. Experienced teachers were engaged to conduct the classes. In the firsttest, 2925 candidates appeared at all centres and 1200 of them were declared successful. In the second Entry Test, 1993 candidates appeared and 951 were declared successful. The coaching classes of the first batch of Foundation Course commenced in January, 1995 and July, 1995 atKarachi, Lahore, Islamabad, Multan, Faisalabad, Quetta and Peshawar..

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Coaching:

Being the backbone of the Institute’s education delivery system, coaching received theutmost attention from the very inception of the Institute. Initially, however, it wasincapacitated by the absence of the basic ingredients of a regular coaching system, as hasbeen sketched out in Chapter Two under the sub-heading ‘Teething Problems.’ With thepassage of time, however, the Institute’s concerted efforts succeeded in establishing a soundcoaching delivery system at all the centres. And in this effort, the Institute was admirablyhelped by the Canadians under the Colombo Plan.

In the first few years, students had to prepare themselves at their own for the examinations.In 1954, some assistance was arranged for them in the form of occasional lectures at regularintervals. The first regular coaching classes were started in a hired single room in a local High School of Karachi in 1955. Later, arrangements were made to conduct coaching classes atLahore, Hyderabad, Rawalpindi, Wah, Dacca and Chittagong. Subsequently, other growingindustrial centers, like Lyallpur, Multan, Daudkhel, Khulna and Rajshahi, were added to thelist. Initial expenses of setting up a coaching centre at Multan were borne by the WestPakistan Industrial Development Corporation (WPIDC).

As time passed, a few of these centres had to be wound up for want of students in viablenumber. At some of these places, classes were started, continued for some time, thendiscontinued and started again when the number of desirous students warranted and whenfavourable conditions prevailed and local support was forthcoming. Just to cite one example, coaching programme at Rawalpindi and Wah was started in 1956, was kept in abeyance forsome years and was resumed in 1962 when the Institute got active cooperation of Mr.F.M.Faizi in Wah and Mr. Ibnul Hussan in Rawalpindi.

It was approximately at that time that the Council decided to concentrate more onconsolidation and expansion of the education programme at the existing centres rather thanincreasing the number. But compelling demands kept surfacing and the Institute had torespond positively. A coaching centre was established in Quetta in 1970 – 71 and in Peshawar in the following year. Islamabad was added to the network in 1973-74 but the coaching centre there was merged with the Rawalpindi centre after two years. Next to come was Larkanawhere coaching classes were started in 1977 – 78.

By the year 1983 – 84, the number of students at Karachi had increased so much that all ofthem could not be accommodated in the Soldier Bazar building, though its capacity hadalready been increased in 1969 with the addition of an annexe, consisting of four rooms goodfor some 250 students. It was, therefore, decided to arrange rented accommodation for

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conducting coaching classes. The Institute succeeded in its efforts with the help of theEducation Department of the Sindh Government and got an accommodation in theGovernment Teachers’ Training College in F.B. Area and started a second coaching centrethere. It became functional from the academic session of May – November of 1984 withclasses for Part – I and Part – II. These were in addition to the coaching programmecontinuing at the Institute’s Soldier Bazar building.

Another major expansion of coaching activities had been effected during the preceding yearwith the introduction of an afternoon shift in Karachi. The idea behind it was to facilitategovernment officials and teachers to pursue the course of study after office hours. The shiftproved an instant hit, attracting large number of students.

After a lapse of about a decade, new coaching centres were opened at Abbottabad andSukkur in 1986-87 and at Sargodha in the following year. In 1989 – 90, a centre was alsoestablished at Dera Ghazi Khan on experimental basis. Subsequently, Mirpur (AJK) andGilgit were also brought on the map. The latest coaching centre to be established was inKohat in 2002 – 03.

After 1970, some overseas centres were also set up. Those were at Kuala Lumpur,Dahran/Alkhobar, Riyadh, Jeddah, Dubai, Abu Dhabi, Bahrain, Muscat, Kuwait, Dar-es-Salaam, Tehran, Tripoli and Dodoma. But due to lack of supervision, these centres could notbe run permanently and many of them had to be closed down. Presently, there are 12 centres in Pakistan and two in Canada and Dubai. Both these overseas centres are essentiallyexamination centres and do not offer any coaching facilities. The 12 centres in Pakistan are atKarachi (two centres), Lahore, Hyderabad, Mulatn, Faisalabad, Quetta, Islamabad,Peshawar, Abbottabad, Gilgit and Kohat. Coaching classes are conducted at all these centresboth in Winter and Summer Sessions, normally commencing on a uniform basis.

As coaching classes are the mainstay of the Institute’s education programme, particularattention is paid to the selection of lecturers. It is they who first represent the Institute to thestudents and are the front-line operators. Upon their ability and their dedication to their taskdepends the quality of the Institute’s products. Therefore, it is but natural for the Institute toexercise extreme care to ensure that only the best available teachers are taken on the faculty. It is perhaps one reason among many other that the Institute has always kept in its own handsthe initiative of changing instructors, if needed, from session to session. It does not employ apermanent faculty and works with a visiting faculty, as is the practice in other professionalinstitutes. And in the visiting faculty, there have always been well-known subject specialistsand professional experts of high standing and repute. Some of the faculty members are alsosent to attend workshops organized abroad by international organizations for the training of

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accounting educators. Seminars on faculty training are also held by the Institute, though their frequency is not as high as it should be.

In recent years, the Council has taken several steps to improve further the coachingstandards, These include increase in the remuneration of teachers, more stringent selectionprocess, greater supervision, improved teaching environment and enhanced use of audiovisual aids. More recently, a programme has been developed to appoint the promisingstudents as teaching assistants in each subject. A stipend is to be offered to them.

Correspondence Courses:

Coaching classes, the centre piece of the Institute’s education programme as they are, are notand cannot be expected to be sufficient in themselves to educate and train all the students, alarge percentage of whom comprises working men and women. These students either haveno time to attend classes or they live in areas to which this facility has not been extended. Fortheir benefit, the Institute started correspondence courses as early as in 1965. The programme met with immediate response and a substantial number of students got themselvesregistered. The Council of the Institute had been toying with the idea of startingcorrespondence courses since 1960 and had decided to open one initially for the students ofPrimary and Intermediate stages at Karachi, Lahore and Dacca with effect from February,1962. Correspondence course lesson notes were got written by primary writers on foursubjects and reviewed by final writers. The four subjects were: General CommercialKnowledge, Industrial and Commercial Law, Economics, and Statistics. Lesson notes inPrinciples of Accounting, Fundamentals of Cost Accounting, Advanced Cost Accountingand Advanced Accounting, made available by the Society of Industrial and CostAccountants of Canada, were adapted. Primary authors for lesson notes in ProductionMethods and Auditing had also been appointed. In 1963-64, the Council even authorizedcapital expenditure likely to be incurred on these courses. However, for a number of reasons,much progress could not be made towards the introduction of the scheme andimplementation of the programme. Then came 1964-65 and the Canadians entered thepicture.

A study of the progress made in the preparation of correspondence courses was undertakenby the Canadian Colombo Plan Adviser, Mr. A. E. Low, soon after his arrival at the Institute.As progress had been disappointingly slow due to various difficulties encountered in thewriting up of lesson notes, he undertook the job of preparing the correspondence course andadvised that the programme be introduced at the Advanced level first, as no coaching classeswere being conducted in advanced subjects in any centre other than Karachi. In fairness tothe students in other centres, it was felt that the need was most urgent for coaching the more

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difficult subjects at that level. The students at the Primary level had been well taken care of in the matter of provision of coaching facilities, but since some branches were not thenconducting classes in the Intermediate group, these subjects were to be made available justafter the introduction of the advanced courses. No doubt, the need for coaching, whether bymeans of lectures or correspondence course notes, was more particularly felt in the difficultsubjects at the Advanced and Intermediate levels. Therefore, hectic efforts were made toprepare the lesson notes for Correspondence Course. Lesson notes on the subjects ofAdvanced Cost Accounting and Management Accounting were completed and madeavailable to students by the end of October 1965. Within months after that, lesson notes onother subjects such as Auditing and Income Tax, Fundamentals of Cost Accounting andAdvanced Accounting, were also completed and made available to students from February1966.

With the accomplishment of the correspondence course programme, not only did the Finallevel students benefit substantially, but also a good number of out-station students ofIntermediate level took advantage of it and enlisted their names for postal tuition. By the year 1968, correspondence courses for all the subjects covered under the Primary level were alsointroduced. These courses produced excellent results and the pass percentage of thecorrespondence course students proved exemplary.

In view of the success of the programme and with the intent of consolidating the project andproviding it with an institutionalized organizational structure, a Correspondence CourseDepartment was established under a full-time Director and with a Marker at theheadquarters in Karachi in 1968. Both the officers were members of the Institute. The mainpurpose of setting up this department was to ensure maintenance of standards and provision of timely guidance to the students. It was also made responsible for the preparation andpublishing of lesson notes of different subjects. These were prepared primarily forinstruction of students by correspondence, but were also used as a basis for instruction by the lecture method. Thus was ensured an element of uniformity in lecture contents. This elementof uniformity was an essential requirement, because coaching was conducted at differentplaces by visiting faculty whose members kept changing.

Subsequently, it was decided that Karachi, Lahore and Islamabad would handle all activitiesrelated to the correspondence courses in their own areas. The Institute prepared its ownstudy material upto Part V level in 1976. It was printed and issued to students on nationalbasis. Its preparation involved tremendous efforts over three years and heavy expenditure.

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Another very important development in the context of correspondence courses took placenearly 27 years later, when the correspondence assignments were revised in 2003-2004 and adata bank was established to select different assignments for different sessions.

Canadian Help:

The brief account of assistance rendered by the Canadians in developing the Institute’scorrespondence courses does not do full justice to the sustained valuable help they extendedto the Institute for ten long years. Although it has also been spoken about in Chapter Two ofthe book, it does deserve some more narration, for which we will be deviating from thesubject under discussion for a while.

As has already been discussed, an eminent Canadian expert, Prof. Donald R. Patton of McGill University of Montreal was sent to Pakistan, under the technical assistance programme of the Colombo Plan. He visited the Institute during the first half of 1960 for two months. It wasthrough his untiring efforts that the Institute was able to change its syllabus radically and tochalk out a more comprehensive education programme. About the same time, the ExecutiveVice President of the Society of Industrial and Cost Accountants of Canada, Mr. J. N. Allanpaid a short visit to the Institute and advised it on technical and organizational matters. TheSociety also contributed to the Institute their R.I.A. lesson notes to help in coaching activities.As a follow up measure, the Canadian Government agreed to lend the services of two CostAccounts experts for a period of two years. Mr. Walter William Fee, R.I.A., Chief Accountant, Coleman and Evans Limited, Vancouver, joined the Institute as a Colombo Plan Advisor fora period of one year. After successfully completing his assignment, he left Pakistan on June10, 1961. For the second year, the Canadian Government selected Mr. Douglas S. Beamanwho had already come to Pakistan. He joined the Institute in August 1961 and assisted it inboth administrative and educational fields. His term of service was one year only, but he wasfound so useful that the Council renewed his contract upto August 1964.

Prof. Patton was sent by the Canadian Government again in 1962. He toured all the branchesof the Institute and put-forth valuable recommendations for improving the Institute’sorganization, educational programme and course contents. His services were made available to the Institute for a third time in November, 1966, when he compiled a comprehensive report for future guidance in maters of organization, education and planning.

Mr. Allan also paid a second visit to the Institute in 1967 for two weeks and gave valuableadvice for the Institute’s future development. The National Council conferred HonoraryFellowship of the Institute on him and Mr. A. E. Low, the then Colombo Plan Advisor to theInstitute who had replaced Mr. Beaman.

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Another Canadian to serve the Institute as Colombo Plan Advisor was Mr. E.J. S. Innes, whobasically helped in the Institute’s book adaptation programme - a subject to which we willrevert later in the chapter. His contract was extended in 1970 for one year at the Institute’srequest.

It was not one-way traffic. The Canadians also invited some of the Institute’s active membersto Canada, to study or on observation tour of the Society of Industrial and Cost Accountantsto obtain first-hand Knowledge of its systems and procedures, Messrs Khurshid Ahmad, H.U. Butt and the Educational Director of the Institute visited Canada in 1965. In 1969, Mr. A.M. Ansari, the then Executive Director of the Institute, visited SICA for a period of threemonths to study the working and organization of the Society. On his way to Canada, Mr.Ansari also visited the offices of professional accounting bodies in Singapore, Hong Kongand Japan. He also visited Stamford College, Singapore, and studied the organization of their Correspondence Courses Department. On his way back from Canada, Mr. Ansari visited theoffices of the Institute of Cost and Works Accountants in London.

When Mr. Innes left for Canada at the completion of his extended contract, that signalled theconclusion of Canada’s assistance programme under the Colombo Plan – over ten years longassistance and help to the Institute in a variety of effective ways to build the foundations of its organizational structure, its educational training programme and its future development.

Other Initiatives:

And now back to the topic under discussion. In addition to direct education through lecturesand correspondence courses detailed out in the preceding pages, the Institute also employsother means and methods to augment the students’ professional knowledge, to enlarge thescope of their interaction with professional and industrial wizards, to enhance their practicalobservations, to develop their confidence and their communication skills and to increasetheir ability to better use the latest tools of trade to full advantage. These means and methodsinclude lesson notes issued to students, lecture meetings addressed by eminent foreign andlocal experts, study tours of industrial and commercial organizations, student conferences,where students present papers, chapter meetings, seminars, extension services, computercourses, refresher courses, computerized assignment question bank for students ofcorrespondence courses, short-term courses in English and course-related subjects, practicaltraining sessions to enhance the skills of the newly-qualified students and internship training with different organizations in public and private sectors.

The list is far from exhaustive and certainly not descriptive at all. The various means andmethods adopted by the Institute have only been identified here, with a view to conveying

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some idea of what else the Institute does to improve the knowledge and skills of its students,other than teaching by the conventional methods of lecturing and postal tuition. However, itmust be admitted that not all of these have been constantly employed. Some were tried forsome years and then were given up for various reasons. A classical case is theCommunication Skills Course, which was designed in 2001 to help the students improvetheir oral and written skills of communication, so as to be more effective in their professionalwork, in personal interactions, in public speaking, in handling work groups, in coping withinterviews, examinations and so on. It was a very useful course but was not conductedsecond time due to poor response.

Conducted tours of industrial and commercial establishments are one of those activitieswhich have been carried out fairly regularly. It was appreciated within years of the Institute’s founding that the students might acquire excellent theoretical knowledge of industrialaccountancy and yet have very little practical understanding of how a factory operates. Asthis practical aspect was considered essential in the training of students, conducted tours ofindustrial concerns and commercial organizations were included in the training programmeof the Institute from the beginning and have continued to be arranged todate. During thesevisits, students are given a guided tour of a selected establishment, shown its variousdepartments and sections and briefed about its functioning, organizational set-up,production processes and related matters. They also get an opportunity to meet themanagement and interact with them on management-related topics. Such visits are mostlyarranged to industries, but not to the total exclusion of the country’s stock exchanges,business houses, financial institutions and the relevant government departments.

Besides catering to the training needs of its own students, the Institute also undertakestraining of the employees of other organizations. There exists in the Institute a CorporateRelations Department, which was established as part of its endeavour to improve theprofessional and technical skills of executives in the country. The Department is chargedwith the responsibility of conducting special courses, tailor-made to the needs of respectiveorganizations. In 1992-93, the Asian Development Bank selected ICMAP to impart training to the officers of Karachi Water and Sewerage Board. During the same year, the PakistanTelecommunication Corporation, after acquiring autonomous body status, contracted withICMAP to train about 500 of its officers in batches of 25 at Karachi, Lahore and Islamabad inaccounting and allied subjects. Training has also been provided to the officers of theInvestment Corporation of Pakistan, Central Board of Revenue, State Bank of Pakistan and anumber of other organizations. This programme has greatly helped introduce the Institute topotential employers.

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A computer centre was added to the Institute’s educational facilities at Karachi in 1991 andnamed after Mr. Riyaz H. Bokhari, a past President of the Institute, in recognition of hisservices. It is a modern and well-equipped centre having been provided initially with twofile-servers 486 and 386 based on “LAN” and “UNIX” respectively. The Software Libraryinitially included LAN Software, UNIX, ORACLE, FOXPRO 2.0, LOTUS 123 3.1, VENTURA3.0 and Microsoft Windows 3.0.

From 1992, training programmers were started for students, members and trainees of otherorganizations in DOS, Computer Concepts, LOTUS and FOXPRO. Additional programmeswere soon to follow. Two more computer centres were set up at Lahore and Islamabad in1993-94 and later also at Peshawar, Multan, Faisalabad, Quetta, Mirpur and Hyderabad.Computer Courses are regularly arranged at all these centres and large numbers of studentsand interested members are trained every year. In 1998, 29 Nos. ACER Power 6100computers were installed at Karachi, Islamabad and Multan Centres.

Another very helpful initiative taken during recent years is the installation of the latestaudio-visual equipment to upgrade classroom facilities, thereby improving the learningenvironment for students. Besides television sets, VCRs, audio cassettes and video films,which have been in use for decades, all the branches are today equipped with multimediaprojectors and other latest tools of learning and communication.

Books and Libraries:

No account of the Institute’s education development activities can be complete withoutcovering its pains-taking efforts to make available to the students the textbooks and forbuilding a library of its own. As has been mentioned briefly earlier in the book, provision ofbooks presented a formidable problem during the Institute’s formative phase. The problemwas solved, at least to a bearable extent, with the cooperation of the British High Commission and the British Council in Karachi. But the development of a sizeable inventory of books,such as may be called library, had to await the start of aid under the Colombo Plan. It wasunder this Plan that the Institute started to receive books from the Canadian Government _initially worth $ 15,000. This first consignment arrived in 1960-61 and was followed by manymore shipments in the years to follow. The Society of Industrial and Cost Accountants,Canada also donated books in addition to supplying issues of its magazine ‘Cost andManagement’. Another valuable source of books donation was the Asia Foundation. Otherorganizations also showed generosity towards the newly-founded Institute. All the booksthus received were not kept in Karachi only. Lahore, Hyderabad, Rawalpindi, Wah, Daccaand Chittagong also received their share. A great number was loaned to the registeredstudents.

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Gifts of books received from abroad free of cost, though most welcome and highlyappreciated, were not enough by themselves to meet the requirements of building libraries at any of the Institute’s branches. The Institute, despite paucity of funds, had to go on a buyingspree. Books readily available were purchased and orders placed for those not found in thelocal market. All the books, magazines, journals and pamphlets received in gift andpurchased were classified, catalogued and stored in a systematic manner. Work was alsodone to expand other information records, such as annual reports and statements of accounts of different companies, etc. Efforts were made to establish liaison with internationalpublishing houses for the regular supply of catalogues, so as to keep the interested studentsand members posted with the latest publications all over the world. Soon proper, fairly well-stocked and useful libraries were in place, growing in size and facilities with each passingyear. A Library Information Service was initiated in 1985, whereby students were informedabout the topics of relevant material published in newspapers, periodicals and journalsreceived at the library so as to help them locate material of interest without having to wastetime in searching for it. In the early nineties, the library also started indexing of articles andprofessionally relevant material appearing in the journals of professional accounting bodies.Today, the Institute can rightly be proud of one of the finest professional libraries in thecountry.

Another important task undertaken by the Institute for the benefit of the students and in theinterest of the profession was book adaptation. By the late sixties, growth of studentmembership in both the mediums of instruction i.e. coaching and correspondence, and theirconfusion in appreciating professional situations and requirements referred to in bookswritten in foreign lands, had brought the Institute to the stage of taking in hand theimperative, but arduous, task of adapting the prescribed textbooks to suit local conditionsand their printing in Pakistan. Initial steps taken to that end had the full support andcooperation of the Government of Pakistan, Government of Canada, SICA and the AsiaFoundation. The following three books were first selected for re-writing:

Accounting Principles by Niswonger & Fess - 10th EditionIntermediate Accounting by Simons & Karenbrock - 4th Edition; and Cost Accounting by Matz, Curry & Frank - 4th Edition

Authors appointed by the Council to do this important work were Mr. Iqbal Ahmed, FPIA,for Accounting Principles; Mr. Zaheeruddin, MBA, for Intermediate Accounting and Mr.A.R. Khan, FPIA, for Cost Accounting. The objectives of the text book adaptation programme were:

(a) To provide accountancy students in Pakistan with textbooks, which portray the localconditions in Pakistan.

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(b) To use accounting terminology which is common throughout the country.

(c) To provide accounting textbooks which take cognizance of the laws and economicconditions of Pakistan, so that the students would be readily able to relate the textbookprinciples and examples to the business situations found in Pakistan.

(d) To provide accounting text books at a cheap price throughout the country.

The Canadian Government, under the Colombo Plan Aid Programme, had agreed to provide the services of two Accounting Professors to assist and advise the Pakistani authors. Both ofthe Professors, recommended by the Society of Industrial Accountants of Canada, were wellexperienced in adaptation of textbooks and gave valuable assistance and guidance to thelocal authors. The Asia Foundation provided the necessary financing for the programme.

The manuscripts of two books were ready by October 1969. Those were first reviewed byProf. W. J. McDougal of the University of Western Ontario and by Prof. Blazouske of theUniversity of Manitoba. A final review was carried out by a special committee, comprisingrepresentatives of the Institute itself and of the Institute of Chartered Accountant of Pakistan, Institute of Business Administration, University of Dacca and the Sindh University.Adaptation work of the two books was completed in 1970. Adaptation of the book onIntermediate Accounting was temporarily postponed due to the heavy workload of the firsttwo books. The two adapted books were to be printed within a few months and madeavailable for sale from the academic year 1972-73. But that was not to be. The publishers tooka very long time to finish their job and the books could only become available in the following year. Once the books were in the market, the Institute approached various universities andother educational institutions to prescribe them for their students also.

The Institute also had a textbook lending scheme for students who could not afford buyingthem. Although the scheme provided to the students a very useful service, it wasdiscontinued in the late 90’s for various reasons. The good news is that the scheme has beenrevived with effect from 2003 – 2004. Students can now borrow books from the library for thewhole session.

Enrolment:

Let us now have a glance at the students’ enrolment pattern so as to appreciate the gradualincrease in their number. It was the growth in the strength of the student body that wasessentially responsible for the expansion of the Institute’s network, as also for the

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enlargement of its educational programmes and related activities described in the foregoingpages.

Starting with only a few scores of students in 1951, the Institute had on its rolls a total of 902students in 1960 and 1078 by 30th June 1961. Of these, 839 were registered in West Pakistan,Karachi being on top with 614, and 239 in East Pakistan where the majority –170 – was inChittagoing. In 1961 – 62, the total number fell to 640. However, it almost doubled in thefollowing year, reaching 1257. The trend of increase in the number of students admitted tocoaching classes continued in subsequent years, reaching 3810 in 1971. The number fellslightly after that because of the turbulent political situation within the country and war withIndia. Still, their number in June 1972 was 3525. Of these, only 114 were in Dacca andChittagoing. Karachi continued to contribute the largest number. Students enrolled there asof June 1972 numbered 2435. Students membership picked up again in 1973 and reached atotal of 4638. However, only 933 new students were enrolled in 1974-75. Admissionsremained subdued for a few years but showed an upward trend in 1979-80, when 1546 newstudents were registered. It took a dip again towards the end of the last millennium and thebeginning of the new.

Taking cognizance of the situation, the Institute’s Council, during the second half of the year2001, approved a number of steps to arrest the declining trend. Depending uponexaminations and results of the country’s various universities, admissions to the Instituteused to follow a cyclical and comparable pattern of similarity of session, that is summer withsummer and winter with winter. The Council revised this pattern. After revision not only did the number of admissions increase, but also a large number of students who had done BBA or MBA were attracted to the Institute. Thus was also enriched the quality of the Institute’sintake. Besides this, an extensive marketing campaign was launched. Because of all theseefforts, the admissions of new students registered a phenomenal growth of 45% during 2001-02, which was the highest in the SAFA region. The growing trend of admissions continuedsubsequently as well. Overall admission position during 2001-2002, however, showed adecline of 7.9%, because total admissions stages other than Foundation-I had droppedmainly due to a drop during the previous four sessions and lower number of studentspassing out.

The number of new admissions in 2003 – 04 was 3174, bringing the number of total studentsin all stages in that year to 10844. Among other things, what attracted more students to theInstitute was the recognition in that year of the Institute’s qualification by the HigherEducation Commission of Pakistan as being equivalent to Master’s Degree in Pakistan for the purpose of higher education and employment.

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Fees:

As the Institute attracts students from all segments of the society, it has been consciously andthoughtfully made one of the least expensive professional institutes of the country. Since thevery beginning, all possible efforts were made to provide education and training to thestudents at the lowest fee rate, so that more and more students could get education in thefield of Management Accountancy and take part in strengthening Pakistan’s economy.Further, the Institute has always had a liberal policy for giving fee concessions to deservingcandidates. The fee structure of different periods, as given in Table V, VI and VII, wouldshow clearly that the Institute has always had a very low fee structure, with a view to makingprofessional education in Cost and Management Accounting available to the largest numberof students at an affordable cost. The total fee for the entire course for three years was onlyRs.247 prior to 1962. It included registration, annual subscription, coaching and examinationfees. The fee structure was revised from time to time according to increase in the actualexpenses on providing quality education and training and to pay for the enlarged scope ofacademic activities. However, the Institute was never driven by commercial motives and,therefore, from its very inception, it took special care of the poor students. Besides adoptingthe lowest fee structure for the benefit of all students, it had established a Poor Students Fund in 1953, within two years of its coming into being, to give a helping hand to the deservingstudents.

Messrs M. H. Khan, N. M. Postwala and Iqbal Ahmad were appointed as Trustees of theFund. Mr. M. H. Khan was the first person who had donated Rs. 500 to this Fund. A similartype of Fund was also created in 1995 to be known as Ansari Memorial Fund.

Similarly in 1969, a concession of 50 per cent of correspondence course fee was allowed tofemale students. As coaching classes were held during late evening hours, it wasrecommended that ladies should take the correspondence courses. Their tuition fee wasmade payable in two equal installments, the first being payable on enrolment and the secondand final within three months of enrolment. This was also a sort of help to the students.Moreover, a system of giving concession of 50 per cent in tuition fee (coaching orcorrespondence) was started in 1968, to allow one of two real brothers or sisters registeredwith the Institute to pay half the fee. This concession is still allowed.

A scheme for waiver of tuition was also put in effect in 2002. Under this scheme, thedeserving students can fully avail this concession on merit/need basis. When service to thecountry is the driving force of any venture, altruistic considerations do take precedence!

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Chapter Six

Fulfilling Raison D’etre (b) Examinations

All education and training institutions are, by their very nature, concerned with thestandards of student’s competence. How much of the knowledge imparted to the studentshas actually been absorbed by them ? How many of the skills taught have actually beenpicked up? To what extent has the time spent in learning actually impacted theirunderstanding and thought processes? The established way to test all this is no other thanexaminations. Passing such a test of competence is what the Cost and ManagementAccountants Act has made a mandatory condition for admission to the Institute’smembership. Examinations, like education and training, are thus among the very purposesfor which the Institute was created.

Policy:

The object of examinations of the Institute, as in the case of all other professional institutions,is to ensure that the students are adequately trained to meet the overstretching professionaldemands, situations and challenges. The Institute, therefore, has to be wary, on the one hand, of setting very high educational standards thereby discouraging all but the very brilliantstudents and, on the other hand, has to be circumspect to ensure that the graduating studentsare capable of handling the great responsibility that is their’s in today’s economy. TheInstitute’s examination policy has, from the beginning, been aimed at offering such anintellectual challenge to the students as may encourage and stimulate the development of the students’ mental faculties, yet not be so difficult to meet as to discourage those with naturalabilities and the right aptitudes. And striking this balance involves, firstly, the standard ofcourses and then the quality of examinations. The Institute has always shown full realizationof the fact that no matter how thoroughly the students study for an examination, they canonly do as well as the course prepares them for. Thus, the Institute’s constant endeavours tokeep its courses commensurate with educational developments and the economy’srequirements are faithfully put to test in its examinations. All its attempts to raise theexamination standards have invariably been consequential to a parallel rise in materialquality.

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The Institute’s qualification examinations have been so patterned as to ascertain whether astudent has acquired a sound knowledge of all aspects of accounting techniques and of thebusiness environment; whether he has the special mental attitude, aptitude and orientationrequired by the accounting profession; whether he has the ability to concentrate, analyze andmeet situations; whether he can think clearly and logically; and above all, whether he canrelate the knowledge he has gained constructively to practical problems. If a student’sanswer scripts provide answers to these searching questions in the affirmative, he isconsidered to have reached the standard set by the examination authority and is declared tohave passed the examination.

In its early years, the Institute took into account only the practical aspects of the professionand introduced in 1951 a curriculum based on them for its Intermediate and Finalexaminations. These examinations were so designed as to require the students to be familiarspecially with two types of disciplines. A substantial part of the examinations required anunderstanding of Cost Accounting and Advanced Costing in-depth, within a framework ofaccounting principles. The other part required the knowledge of Statistics, Economics,General Commercial Law, Advanced Accounting and Industrial Management.

In addition to the qualification examination, a plan to award a diploma in Cost Accountingwas temporarily introduced in early 1952 to meet the fast increasing demand of CostAccountants. The diploma was awarded to students who had passed the Intermediate andFinal examinations in Cost Accounting and Accountancy papers only. Such diploma holders could become eligible for Associate Membership of the Institute only after passing theremaining subjects of the Intermediate and Final examinations. In the same period, acombined examination in lieu of the Intermediate and Final examinations was alsointroduced for the benefit of Registered, Chartered and Incorporated Accountants and forthose who had, for not less than ten years, held gazetted posts in the Accounts Department ofthe Government. That examination considered of the Production Engineering paper of theIntermediate examination and all papers of the Final examination.

Since the fifties, the Institute’s examinations have come a long way and become verycomprehensive, corresponding to the frequent syllabus revisions, responding to shifts ofemphasis in product quality assessment and measuring up to the changing criteria ofacceptability in the market. A policy was framed in 1998 to make training, for a minimumperiod of two years compulsory for students who did not have proper work experience. They were made eligible to appear in the examination of Professional IV only on submission of anexperience certificate.

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Chapter Six: Fulfilling Raison D’etre (b) Examinations

System:

All activities related to examinations, such as setting of question papers, holding ofexaminations, marking answer scripts, compilation of results and their declaration werecarried out by the members of the Council themselves from 1951 to 1966. But when the Costand Management Accountants Act came into force, a properly institutionalized system andorganizational set-up was brought into being for handling examination matters. The Actprovided that the Council shall form an Examination Committee, comprising the Presidentor the Vice President and such other members as may be prescribed. The Regulations framedunder the Act lay down that a Committee shall be constituted by the Council at its very firstmeeting and will be composed of five members, including the President or Vice President.

The Committee so constituted is responsible for the holding of examinations, admissionsthereto, selection and appointment of examiners, moderation of examination papers, theirprinting and distribution, maintenance of discipline during the course of examinations,assessment of the answer books and compilation and declaration of results. The Committeealso has the responsibility of ensuring consistency between the syllabus and the questionpapers and making sure that question papers are set with full regard for the material taughtby the Institute’s lecturers or contained in its correspondence courses. The Committee has tosafeguard confidentiality of papers before the examination and the intact transmittal ofcandidates’ answer books to the examiners after the examination. Particulars of the papersetters and examiners are kept secret. All the activities relating to paper setting, moderation,printing, storage and packing of question papers and answer books, conduct ofexaminations, marking answer scripts and preparation of results are carried out strictly inaccordance with the Examination Guidelines approved by the National Council.

Since the inception of the Institute, it has been its practice, like other professional accountingbodies, to hold examinations twice in a year. In 1952, examinations were held in April andOctober, but subsequently this policy was changed and examinations began to be held inJune and December from 1954. As a matter of fact, the National Council has been changing,from time to time, the periods for holding examinations. Presently examinations are held inMay and November.

Results are generally declared in July and January. The results of each examination areprepared and compiled under the supervision of the Director Examinations and thereafterput up in the meeting of the Examination Committee. The Examination Committee submitsthe results with its recommendations to the National Council for obtaining its final approval.The Examination Committee checks the results thoroughly before submitting them to theNational Council. The National Council approves the results after satisfying itself about

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their accuracy and authenticity. The results are published in newspapers, the Institute’sJournal and Government Gazette. They are also uploaded on ICMAP, ARY Digital andKalsoft websites.

In 1998, the National Council, on the recommendation of the Examination Committee,decided to reconstruct the Institute’s Examination Department and to re-organize it onmodern lines. The reconstruction and reorganization work took one year to complete. Thenew-look Examination Department started functioning according to the improved systemfrom 1999. An independent wing, with all modern facilities, was also constructed to housethe Examination Department.

Exemptions:

It has been the Institute’s practice to grant exemptions to prospective students on the basis oftheir academic and professional qualifications. However, the policy has never remainedconstant and has been changed from time to time. In 1994, when a new education schemewas introduced, the practice of granting exemptions on the basis of academic qualificationwas discontinued but was adopted again in 2002. The exemption policies followed by theInstitute at different times are reproduced below :

Exemption Policy 1955 - 1961

In the Intermediate and Final examinations, exemptions from individual subjects, interalia,may be granted as under:

Parts and Subjects Basis of Exemption

Intermediate

1. Economics Those who have passed a degree examination in thissubject or have passed the R. A. Final Examination or theFinal Examination of the Society of IncorporatedAccountants and Auditors, or of the Institute of CharteredAccountants in England, and Wales, Scotland or Ireland.

2. Book Keeping and Accountancy

Those who have passed B. Com. (with AdvancedAccountancy), M. Com. or M. A. (Com) in Accountancy ofany University approved by the Council; R. R. firstExamination or Intermediate Examination of the Society of Incorporated Accountants and Auditors, or of the Instituteof Chartered Accountants in England, and Wales, Scotland or Ireland or the G.D.A. Examination.

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3. General Commercial Knowledge

Graduates in Commerce and those entitled to exemptionfrom Advanced Accountancy.

4. Elements of Statistics Graduates with Statistics as a subject in the degreeexamination of a recognized University.

Final

Advanced Accountancy andAuditing

(i) Those who have passed the G. D. A. or FinalExamination of the R. A. Board or of the Society ofIncorporated Accountants and Auditors, or of the Instituteof Chartered Accountants in England and Wales, Scotlandor Ireland.

(ii) The Council may consider any other special case on itsown merits.

Exemption Policy 1962 - 1967Parts and Subjects Basis of Exemption

Exemptions in the followingParts / Subjects may beobtained on formalapplication and bysubmitting all supportingdocuments and required feeto the local Branch Councilby students who havesuccessfully passed anequivalent examination:

Exemption will only be granted on the basis of eachexamination passed, which the Institute recognizes asequivalent to that examination for which exemption isapplied.

Practical experience will not be considered as the basisfor exemption.

1. Principles of Accounting.2. Commercial Knowledge/

Production Methods.3. Economics.4. Advanced Accounting.5. Statistics.6. Industrial Organization

and Management.7. Auditing and Income Tax.

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Exemption Policy 1968 - 1969Parts and Subjects Basis of Exemption

Primary

1. Principles of Accounting B. Com., M. Com. (with Advanced Accounting, Statisticsetc) M.B.A (without B.Com), S.A.S (Civil, Military, Supply, P & T.and Railway Accounts, Chartered Accountant,A.C.I.S. (London).

2. General CommercialKnowledge/ ProductionMethods

B. Com., M. Com. (with Advanced Accounting, Statisticsand other relevant Parts and Subjects ), CharteredAccountant.

3. Economics B. Com., M. Com. (with Advanced Accounting, Statisticsetc), Graduate or Post-Graduate in Economics withstatistics, M.B.A. (without B.Com), Chartered Accountant,A.C.I.S. (London).

4. Industrial and Commercial Law

B. Com., M. Com. (with Advanced Accounting, Statisticsetc), LL.B/B.L Chartered Accountant.

Intermediate

1. Statistics B. Com., M. Com. (with Advanced Accounting, Statisticsetc), Graduate or Post-Graduate in Economics / Statistics,M.B.A. (without B.Com), Chartered Accountant.

2. Auditing and Income Tax Exemption in Equivalent Parts and Subjects :Students who have passed a full part of I.C.W.A (London)examination or R.I.A. (Canada) examination would beexempted from equivalent Parts and Subjects in the PIIA’scourse.



Primary

1. Principles of Accounting B. Com., M. Com., M.B.A., M. Ed. (with Accounting) S. A.S. (Civil Military Supply. P&T. Railways Accounts) P.A &A. S., P.T.S., PMAS. Finance Service Academy Certificate,Chartered Accountants, ACIS (London), ICWA (London),RIA (Canada).

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2. General CommercialKnowledge

B. Com., M. Com., Chartered Accountants.

3. Production Methods B.E., B.Sc. (Engg), Mercantile Navy EngineeringCertificate, as recognizedby the Government of Pakistan.

4. Economics B. Com., M. Com., MBA, Graduate or Post-Graduate inEconomics. M. Ed. (with Economics) CharteredAccountants, ACIS (London).

5. Industrial & CommercialLaw

B. Com., M. Com. (with Industrial and Commercial Law),LLB., BL., Chartered Accountants.

Intermediate Chartered Accountants, ACIS (London).

1. Advanced Accounting2. Fundamentals of

Cost Accounting

ICWA (London) RIA (Canada), B. Com., M. Com. (withStatistics), Graduate/Post Graduate (with Statistics), M B.A., Chartered Accountants.

Final

1. Advanced Cost Accounting ICWA (London).

2. Industrial Organizationand Management

ICWA (London), Chartered Accountants.

3. Auditing and Income Tax ICWA (London), Chartered Accountants.

Exemption Policy 1973 – 1985


Part – I

1. Accounting – I B.Com., BBA, M.Com., MBA., M.Ed. (with Accounting),SAS (Civil Military Supply, P&T and Railways), CivilServices Academy Certificate, Chartered Accountants,ACIS (London), ICMA (London), RIA (Canada), Diplomaof Institute of Bankers in Pakistan.

2. Economics B.Com., B.B.A., M.Com., M.B.A., Graduates or Post-Graduates in Economics, M.Ed. (with Economics),Chartered Accountants, A.C.I.S. (London), Civil ServicesAcademy Examination, Diploma of Institute of Bankers inPakistan.

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B.Com (with Industrial and Commercial Law), L.L.B., B.L.& Chartered Accountants.

Part – II

1. Cost Accounting I.C.M.A. (London), R.I.A. (Canada).

2. Production Technology and Management

B.E., B.Sc., (Engg), B.Tech., Mercantile Navy (Engg)Certificate recognized by the Government of Pakistan.

3. Business Mathematics B.B.A., M.B.A., B. Engg.,

4. Statistics Graduates/Post Graduates (having completedMathematics and Statistics Courses.

Part – III

1. Accounting –11 Chartered Accountants, A.C.I.S. (London), I.C.M.A.(London).

2. Office Mangment. & Report Writing

I.C.M.A. (London), B.B.A., M.B.A. (upon specificcoverage).

3. Quantitative Techniques and Data Processing

I.C.M.A. (London).

Part – IV

1. Advanced Cost and Management Accounting

I.C.M.A. (London).

2. Management I.C.M.A. (London).

Part – V

1. Financial Management I.C.M.A. (London).

2. Taxation Chartered Accountants.

3. Auditing & Company Law Chartered Accountants.

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Part – I

1. Accounting – I B. Com., B.B. A., M.P.A., M. Com. M.B.A, M. Ed. (withAccounting) S.A.S. Accountant (Civil, Military Supply,Post Office, T&T, and Railway Accounts), Civil ServicesAcademy Certificate, Chartered Accountants, ACIS(London), CIMA (London), SMA (Canada), Diploma ofInstitute of Bankers in Pakistan, ACCA, AAT (London).

2. Economics B. Com, BBA, MPA, M. Com, MBA, Graduates or PostGraduates in Economics, M.Ed. (with Economics),Chartered Accountants, ACIS (London), Civil ServicesAcademy Certificate, CIMA (London), Institute of Bankersin Pakistan, SMA (Canada) ACCA, AAT.


B. Com., and Chartered Accountants (with Industrial &Commercial Law), LL.B., B.L., Institutes of CorporateSecretaries of Pakistan.

Part – II

1. Cost Accounting CIMA (London), SMA (Canada).

2. Business Communicationsand Report writing

CIMA (London), MBA, SMA (Canada) M. Com., ACCA.

3. Business Mathematics &Statistics

BBA, MBA, B. Engg., and other Graduates/PostGraduates, SMA (Canada), ACCA, CIMA (London)(having completed Mathematics and Statistics courses).

Part – III

1. Advanced Accounting Chartered Accountants, ACIS (London), SMA (Canada),CIMA (London), ACCA.

2. Production Technology and Management

B. Engg., B. Sc.(Engg)., B. Tech., Mercantile (Navy)(Engg),Certificate as recognized by the Government ofPakistan.

3. Taxation Chartered Accountants, Institute of Corporate Secretariesof Pakistan.

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Part – IV

1. Advanced Cost & Management Accounting

CIMA (London), SMA (Canada).

2. MIS. Data Processing &Quantitative Techniques


3. Corporate Laws &Secretarial Practice.

Chartered Accountants, Institute of Corporate Secretariesof Pakistan.

Part – V

1. Financial Management CIMA (London), SMA (Canada).

2. Auditing Chartered Accountants.

3. Organization and Marketing Management



No exemption will be granted in the following Parts and Subjects to any students:

1) Computer (Foundation)2) I.C.L. (Professional – I)3) Production Technology and Plant Management (Professional-II)4) All Parts and Subjects (Professional III & IV)


Foundation

All subjects, other than the subject of Computer

Members of the I.C.A.P., C.I.M.A. (U.K.), S.M.A.(Canada),I.C.S.P., I.C.S.A.(U.K.) or other professional bodies as maybe approved by the Council of the Institute.

Professional - I

1. Financial Accounting Members of the I.C.A.P., C.I.M.A. (London), S.M.A.(Canada) or other professional bodies as may be approvedby the Council

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2. Cost Accounting Members of the C.I.M.A. (London), S.M.A. (Canada) orother professional bodies as may be approved by theCouncil.

3. Business Communication and Report Writing

Members of the C.I.M.A. (London), S.M.A. (Canada),I.C.A.P., I.C.S.P. or other professional bodies as may beapproved by the Council.

Professional - II

1. Advanced FinancialAccounting

Members of the I.C.A.P., C.I.M.A. (London), S.M.A.(Canada) or other professional bodies as may be approvedby the Council.

2. Taxation Members of the I.C.A.P., I.C.S.P. or other professionalbodies as may be approved by the Council.

3. Corporate Laws and Secretarial Practice

Members of the I.C.A.P., I.C.S.P. or other professionalbodies as may be approved by the Council.


Exemptions will be granted on the basis of qualifications which have been completed. Thosehaving passed only part(s) for various qualifications will not be allowed any exemption fromICMAP Parts and Subjects.

Members from CIMA (U.K.) and SMA (Canada) are eligible for grant of ICMAP Membership upon submission of application along with requisite fee. For Certificate of Practice, thesemembers will have to qualify the Parts and Subjects of Industrial & Commercial Laws,Corporate Laws and Secretarial Practices and Business Taxation.

Members of other Professional Accounting Bodies, which are members of IFAC, may beconsidered for exemption on case-to-case basis


Foundation

All Parts and Subjects Members of ACCA (U.K.), ICAP, ICSP, AAT.

Professional - I

All Parts and Subjects Members of ACCA (U.K.), ICAP.

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Professional - II

1. Advanced FinancialAccounting

Members of ACCA (U.K.), ICAP.

2. Business Taxation Members of ICAP.

3. Corporate Laws and Secretarial Practices

Members of ICAP, ICSP.

Professional - III

1. Financial Reporting Members of ACCA (U.K.), ICAP.

2. Auditing Members of ACCA (U.K.), ICAP.



Foundation - I

1. Principles of Accounting B.Com., BBA, APA (Pak), MPA, M.Com., MBA, ACA(Pak), ACCA (U.K.), ACMA (U.K.), SMA (Canada), IBP.

2. Business English MCS, APA (Pak), M.Com., MBA, MPA, ACIS (Pak), ACA(Pak), ACCA (U.K.), ACMA (U.K.), SMA (Canada), M.A.(English).

3. Economics and BusinessEnvironment

B.Com. BBA, B.Sc.(Economics), B.A.(Economics),M.Sc.(Economics), M.A.(Economics), APA (Pak), MPA,M.Com., MBA, ACA (Pak), ACIS (Pak), ACCA (U.K.),ACMA (U.K.), SMA (Canada), IBP.

4. Computer Systems BCS, BBA., (with Computer), B.Sc., (with Computer),B.Engg., MCS., APA., (Pak), M.Com., MBA, MPA, ACIS(Pak), ACA (Pak), ACCA (U.K.), ACMA (U.K.), SMA(Canada).

Foundation - II

1) Financial Accounting M.Com., MBA, MPA, APA (Pak), ACIS (Pak), ACA (Pak),ACCA (U.K.), ACMA (U.K.), SMA (Canada).

2) Management InformationSystem – II

BCS, B.Engg.(with IT), MCS, MBA, M.Com., MPA, APA(Pak), ACIS (Pak), ACA (Pak), ACCA (U.K.), ACMA(U.K.), SMA (Canada).

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3) Industrial and CommercialLaw

B.Com., LLB, LLM, M.Com., MBA, APA (Pak), ACIS (Pak), ACA (Pak), MPA, ACMA (U.K.), SMA (Canada).

Professional – I

Cost Accounting M.Com., MBA, ACA (Pak), ACMA (U.K.), SMA (Canada).

Quantitative Methods B.Sc.(Maths or Statistics), B.Engg, MCS, M.Sc.(Maths orStatistics), M.Com., MBA, ACA (Pak), ACMA (U.K.), SMA(Canada), MPA, MA(Statistics or Maths or Econometrics).

Business Communication andReport writing

M.Com., MBA, ACA (Pak), ACMA (U.K.), SMA (Canada),MPA.

Management Science Applications

ACMA (U.K.), SMA (Canada).

Professional - II

Advanced FinancialAccounting

ACA (Pak), ACMA (U.K.), SMA (Canada).

Operational Cost Accounting ACMA (U.K.), SMA (Canada).

Corporate Laws and Secretarial Practices

ACA (Pak), ACIS (Pak), LLM, ACMA (U.K.), SMA(Canada).

Business Taxation ACA (Pak), ACMA (U.K.), SMA (Canada).

Professional - III

Financial Reporting ACA (Pak), ACMA (U.K.), SMA (Canada).

Strategic ManagementAccounting


Organizational Behavior and Strategic Management


Auditing ACA (Pak), ACMA (U.K.), SMA (Canada).

Professional - IV

Strategic Financial Management


Corporate Performance Audit and Evaluation


Marketing Management ACMA (U.K.), SMA (Canada).

Information Management and Auditing


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Exemption Policy 2006


Stage – 1

Fundamentals of Accountingand Taxation

B.Com, BBA, M. Com, MBA, MPA, DAIBP (IBP), APA(PIPFA), ACIS (ICSP), ACA (ICAP), ACCA (UK), ACMA(CIMA-UK) CMA (SMA-CANADA), CMA/CFM (USA),CGA (CANADA), IIA (USA).

Business Economics B.Com, BBA, B.Sc., B.A., M.Sc., M. Com, MBA, MPA, M.A., DAIBP (IBP), APA (PIPFA), ACIS (ICSP), ACA (ICAP),ACCA (UK), ACMA (CIMA-UK) CMA (SMA-CANADA),CMA/CFM (IMA-USA), CGA (CANADA), IIA (USA).

Business Law B.Com, L.LB., M. Com, MBA, MPA, L.LM., APA (PIPFA),ACIS (ICSP), ACA (ICAP), ACMA (CIMA-UK) CMA(SMA-CANADA).

Business English BBA, M.Sc., MCS, M. Com, MBA, MPA, M.A., L.LM., APA(PIPFA), ACIS (ICSP), ACA (ICAP), ACCA (UK), ACMA(CIMA-UK) CMA (CANADA), CMA/CFM (IMA-USA),CGA (CANADA), IIA (USA).

Stage – 2

1. Fundamentals of Cost and Management Accounting

M. Com, MBA, ACA (ICAP), ACMA (CIMA-UK) CMA(SMA-CANADA), CMA/CFM (IMA-USA), CGA(CANADA).

2. Management andMarketing

M. Com, MBA, MPA, ACMA (CIMA-UK) CMA (SMA-CANADA), CMA/CFM (IMA-USA).

3. Business Mathematics and Statistics

BBA, B. Engg., B.Sc., M.Sc., MCS, M. Com, MBA, MPA,M.A., APA (PIPFA), ACA (ICAP), ACMA (CIMA-UK)CMA (SMA-CANADA), CGA (CANADA)..

4. Introduction to Information Technology

BCS, BBA, B. Engg., B.Sc., M.Sc., MCS, M. Com, MBA,MPA, APA (PIPFA), ACIS (ICSP), ACA (ICAP), ACCA(UK), ACMA (CIMA-UK) CMA (CANADA), CMA/CFM(USA), CGA (CANADA), IIA (USA).

Stage – 3

1. Financial Accounting APA (PIPFA), ACIS (ICSP), ACA (ICAP), ACCA (UK),ACMA (CIMA-UK) CMA (SMA-CANADA), CMA/CFM(IMA-USA), CGA (CANADA), IIA (USA).

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2. Information Systems and I.T. Audit

ACA (ICAP), ACCA (UK), ACMA (CIMA-UK) CMA(SMA-CANADA), CMA/CFM (IMA-USA), CGA(CANADA), IIA (USA).

3. Cost and Management Accounting – PerformanceAppraisal

ACMA (CIMA-UK) CMA (SMA-CANADA), CMA/CFM(IMA-USA), CGA (CANADA).

4. Presentation and Communication Skills

M. Com, MBA, MPA, ACA (ICAP), ACMA (CIMA-UK)CMA (SMA-CANADA), CGA (CANADA).

Stage – 4

1. Advanced Financial Accounting and Analysis

ACMA (CIMA-UK) CMA (SMA-CANADA), CGA(CANADA).

2. Integrated Management ACMA (CIMA-UK) CMA (SMA-CANADA).

3. Corporate Laws and Secretarial Practices

L.LM. ACIS (ICSP), ACA (ICAP).

Stage – 5

1. Management Accounting – Decision Making

ACMA (CIMA-UK) CMA (SMA-CANADA), CMA/CFM(IMA-USA)

2. Risk Management and Audit

ACMA (CIMA-UK) CMA (SMA-CANADA).

3. Business Taxation ACA (ICAP).

Stage – 6

1. Strategic FinancialManagement


2. Financial Reporting ——

3. Management Accounting –Business Strategy


Statistics:

The gradual increase in the demand, standing and popularity of the Institute’s qualificationsover the years is best reflected in the remarkable growth registered in the number ofcandidates appearing in its examinations. Only 151 had taken the exams held in December1960. The number increased to 24,161 in 2005-06. This phenomenal growth has neither beenaccidental nor sudden. It has followed a definite pattern, always corresponding to thecountry’s industrial growth, commercial expansion and overall economic development.

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Seen from this stand point, the account of gradual increase in the number of examinees inessence provides a good insight into the gradual acceleration of Pakistan’s developmentprocess.

If we look at the figures of students who appeared in the Institute’s various stageexaminations and compare them with the numbers of students who actually passed, rightfrom 1960 to2006, we clearly see a more or less constant growth trend in the number ofexaminees but not a steady increase in the pass percentage. While the number of examineeshas been steadily swelling year after year, the pass percentage has been fluctuatingsubstantially. In the sixties, it rose as high as 42.3 (1962-63) and dropped to as low as 10.4(1967-68). The seventies saw the same trend. The highest pass percentage of the decade was20.63 (1978-79) and the lowest only 6 (1972-73). The eighties were no different. The highestpercentage of successful students in various stage examinations was 21.15 (1980-81) whilethe lowest 12 (1984-85). During the nineties, the highest pass percentage was 26.56 (1995-96)and the lowest 18.75 (1990-91).

The explanation for this is to be found in the quality of intake as well as of instruction.However, what is comforting to note is the fact that whenever the pass percentage droppedto worrying levels, the Council acted with a sense of urgency to rectify the situation.Lowering the standards of the examinations has never been considered as an option, as theInstitute jealously guards its standards and does not make compromise on them. Thedropping pass percentage was always attempted to be raised through corrective measureson other sides.

The best example of this policy was noticed in 2001-2002, when the number of successfulcandidates declined considerably and was found to be a matter of urgent concern. Extendedmeetings of education and examination experts were held to look into the causes of excessivefailure and suggest remedial measure. The outcome was a series of steps to improve thesituation. These included the following :

“Intermediate Pass Certificate” was introduced and issued to over 550 candidates, tofacilitate them to compete in the job market on the basis of part qualification. Later, itwas also decided that, effective from Spring 2003 Examination, “Part CompletionCertificates” will be issued to all those students, who complete any part by sitting in the examination. Consequently, 3,967 “Part Completion Certificates” were issued tostudents during the year 2003 – 04.

An “Overseas Examination Centre” was opened in Toronto, Canada from Summer2002 Examination.

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A comprehensive “Guide on Examination Sitting Techniques”, was developed andwas placed on the Institute’s website in May 2002. It was the first electronic publicationof the Institute.

The scope of “Examiners’ Comments,” giving briefly the requirements of a questionand weaknesses/deficiencies found in the candidates’ answer scripts, was expandedand those comments were published in the Institute’s official organ ‘ManagementAccountant’ two months before the examination, instead of one month as had been thepractice.

After the conclusion of examinations, question papers of Fall 2003 and Spring 2004were immediately uploaded on ICMAP website, replacing the sale of papers oncounter for price.

Question-wise analysis of each subject was also forwarded to the respective facultymembers at all coaching centres, identifying weak areas in each question to facilitateimprovement in teaching.

Practical on ‘Peachtree Accounting’ (MIS-II)-(F-II) and Project / Presentation,IMA/MIS-I (P-IV) were initiated.

While the various part examinations conducted by the Institute are important by themselvesas these represent the successive stages the students have to pass through to quality for theInstitute’s qualification, what really matters in the end is completing the Finals. And whenwe scan from this standpoint the results of examinations held each year under the varioussyllabi in effect, the picture that emerges is as follows:

Syllabus 1955

Term of Examination Final Completed

June 1960 Nil

December 1960 1

June 1961 N.A.

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Syllabus 1955 & 1963


December 1961 N.A.

June 1962 6

December 1962 N.A.

June 1963 9

December 1963 6

June 1964 5

December 1964 10

June 1965 8

Winter 1965 3

Summer 1966 7

December 1966 19

June 1967 5

December 1967 8

June 1968 15

December 1968 17

June 1969 10

December 1969 9

June 1970 15

December 1970 29

June 1971 27

February 1972 11

June 1972 13

December 1972 12

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Syllabus 1973


June 1973 37

December 1973 9

June 1974 19

December 1974 25

June 1975 56

December 1975 43

June 1976 27

Winter 1976 54

Summer 1977 21

December 1977 21

June 1978 24

December 1978 36

June 1979 8

December 1979 50

June 1980 17

December 1980 7

June 1981 14

December 1981 13

June 1982 20

November 1982 11

May 1983 14

November 1983 29

May 1984 15

November 1984 6

May 1985 9

November 1985 16

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Syllabus 1986

Term of Examination Final CompletedMay 1986 8November 1986 15May 1987 20November 1987 31May 1988 6November 1988 35May 1989 17November 1989 13May 1990 17November 1990 39May 1991 25November 1991 38May 1992 30November 1992 14May 1993 30November 1993 35May 1994 51November 1994 79May 1995 44November 1995 67May 1996 88November 1996 158May 1997 99November 1997 99May 1998 96November 1998 99May 1999 270November 1999 178

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Syllabus 1994 and 1998


May 2000 (1994 Syllabus) 138

November 2000 (1994 Syllabus) 216

May 2001 (1994 Syllabus) 132



May 2002 (1994 Syllabus) 64










May 2005 (1998 Syllabus) 126


May 2006 (1998 Syllabus) 192


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Awards and Prizes:

To encourage students to do better at the examinations, a system of giving awards to the most brilliant ones was instituted in 1969. Today there are several awards and prizes for examinees who provide the most convincing proofs of their diligence, abilities and ardency to pursueand assimilate knowledge and skills. The awards and prizes are :

i. D. R. Patton Gold Medal:

Named after Prof. D. R. Patton, an eminent educationist of Canada and a foundermember of the Society of Management of Canada, who provided immensely valuabletechnical assistance to the Institute in its formative phase, this gold medal wasinstituted in 1969. It was donated by the professor himself. From 1969, this medal hadbeen awarded to the candidate who passed the whole Part-IV examination andobtained the highest marks in the same examination in the subject of Advanced Cost &Management Accounting. Since 1998, this medal is awarded to such a candidate whopasses all subjects of Professional – III, and in the same attempt achieves the highestmarks in the subject of Strategic Management Accounting.

ii. M. Shoaib Gold Medal:

This medal was instituted in 1978 in the name of the founder President of the Institute.This medal used to be awarded to such a student who passed the whole Part – V andobtained the highest marks in the subject of Financial Management. Presently, thismedal is awarded to a student who passes the whole Professional IV and gets thehighest marks in the same examination in the subject of Strategic FinancialManagement.

iii. NDFC Gold Medal:

This medal, sponsored by the National Development Finance Corporation, wasinstituted in 1986 to be awarded to a candidate securing first position with at least 65%marks in the aggregate in Professional IV, provided he has already cleared the earlierparts of the Institute’s examination. This was previously awarded to the student ofProfessional V subject to the same condition.

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iv. Billimoria Gold Medal:

This medal, donated by the family of one of the founding fathers of the Institute, wasinstituted in1999 and is awarded to a candidate who successfully passes all subjects ofProfessional IV in first attempt and secures the highest marks, but not less than 80% inthe subject of Information Management and Auditing/Management InformationSystem – I (P-IV).

v. KRB Medal:

This medal was donated by Mr. Riaz H.Bokhari, an ex-President of the Institute, and isnamed after his wife Khadija Riaz Bokhari. It is awarded to a candidate of Professional– III who secures first position and also has over 65% marks in the subject of Auditingwithout failing in any other subject in the same part.

vi. Certificate of Merit:

A Certificate of Merit is awarded to examinees securing first position in the subject,provided he or she

(i) obtains the highest marks in the subject amongst the students appearing in thatexamination,

(ii) secures at least 65% marks in the subject, and

(iii) passes all the subjects of that part at the same time.

vii. Special Certificate of Merit and Cash Award:

Examinees securing the highest marks in aggregate in any part are awarded SpecialCertificates of Merit, subject to the conditions that they secure at least 65% marks in theaggregate in a part and pass all the subjects of that part in that examination.

In addition to the Special Certificates of Merit, they are granted a cash prize ofRs.5000/-each. Before 2002, the cash prize used to be Rs.1000/-.

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These awards and prizes are given at the Institute’s annual convocations. The first evercertificate presentation ceremony was arranged in 1964, at which Mr. M. Shoaib, founderPresident of the Institute and the then Pakistan’s Finance Minister, distributed certificates tothe newly elected Associate and Fellow members of the Institute. Speaking on the occasion,Mr. Shoaib observed: “The role of cost and industrial accountants is vital for a growingeconomy, even more than that of, say, a financier, politician or an economist”. And he wasnot guilty of exaggeration!

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Chapter Seven

Proud Products: The Members

Like any other professional institute, the Institute of Cost and Management Accountants ofPakistan owes its reputation, its prestige and its standing mostly to its members. TheInstitute’s reputation, prestige and standing directly and unmistakably correspond to thecompetence, professional abilities and ethical standards of the members it admits. If theInstitute is likened to a tree, members are the fruits by which it is known.

Categories:

The Institute is under a statutory obligation to maintain a Register of its members. It is indeed on the strength of this Register that members of the profession are constituted a bodycorporate by the name of the Institute and are entitled to be called Members of the Institute.

The Council of the Institute is bound by the Cost and Management Accountants Act, 1966 tomaintain this Register in the prescribed manner and to publish a list of its members on thefirst day of July each year. Categories of persons entitled to have their names entered in theRegister have been enumerated in the Act. But before discussing these categories, it appearsrelevant to see what classes of members were mentioned originally in the Articles ofAssociation at the time of the Institute’s founding in 1951.

The Articles contained provisions for three classes of members: Fellows, including HonoraryFellows; Associates, including Honorary Associates; and General Members.

Defining qualification of the Fellows, the Articles said: “ Except as hereinafter provided, noperson shall be eligible for admission as a Fellow of the Institute, unless he has attained theage of twenty-six years and, at the date of his application for admission as a Fellow, has beenan Associate for five years and for a continuous period of not less than five years next beforethe date of his application has held a position as Chief Cost Accountant or an equivalentappointment or has been in practice as a Consulting Industrial or Cost Accountant.” Those

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elected as Fellows were entitled to describe themselves as Fellows of the Pakistan Institute ofIndustrial Accountants and to use with their names the qualifying letters “F.P.I.A.”

The second class of members – Associates – consisted of members who had qualified theInstitute’s examination and gained three years’ practical experience of Cost Accountancy.The relevant clause of the Articles read: “Except as hereinunder provided, no person shall beeligible for admission as an Associate unless be has attained the age of twenty-one years, andhas at the date of his application for admission as an Associate had three years’ practicalexperience of cost-accountancy and has satisfied the requirements of the Council respectingthe qualifying examinations as may be decided by them and is, at the time of election as anAssociate, actually engaged either in service or in profession as an Industrial or CostAccountant or in a similar position.” The persons so admitted were entitled to describethemselves as Associates of the Pakistan Institute of Industrial Accountants and use thequalifying letters “A.P.I.A” with their names.

The third category – General Members – was essentially included with a view to broadeningthe membership base of the newly founded Institute. In this category were placedbusinessmen and professional practising accountants, prominent educationists, and otherpeople who were interested in the teaching and development of industrial accountancy but,who for various reasons, could not undertake the training course leading up to the Institute’sown qualifications. These members took part in the activities of the Institute and contributedtheir experience, while at the same time benefiting by contact with others with the sameinterests.

In February 1955, the Council decided to admit practising Chartered, Incorporated andRegistered Accountants as members on individual merits.

When a legislation was enacted in 1966, it provided for a Register of Members to bemaintained by the Council and covered the categories and designations of members as wellas entitlement to, and disabilities from, membership in detail. The Act also made itcompulsory for every member to obtain a Certificate of Practice from the Council to be able to practise the profession in Pakistan. In view of their importance, the relevant sections of theAct are reproduced below:

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Chapter Seven: Proud Products: The Members

The Register :

“4. Entry of names in the Register. –

The following persons shall be entitled to have their names entered in the Register,namely: -

(1) (a) any person who was, immediately before the commencement of this Act, a fellow or associate of the dissolved company;

(b) any person who has passed such examination and completed such training, asmay be prescribed for membership of the Institute.

(c) any person who has passed such other examination and completed such othertraining outside Pakistan as it is recognized by the Federal Government, or bythe Council with the approval of the Federal Government, as being equivalent tothe examination and training prescribed for membership of the Institute and, incase he is not permanently residing in Pakistan, fulfils such other conditions asthe Federal Government, or the Council with the approval of the FederalGovernment, as the case may be, may deem fit to impose;

(d) any person domiciled in Pakistan, who is, at the commencement of this Act,whether within or outside Pakistan,

(i) studying for any foreign examination and also undergoing training andpasses such examination and completes such training within three years ofsuch commencement, or;

(ii) undergoing training, having passed any such foreign examination, andcompletes such training within the said period, if such foreign examinationand training are recognized by the Federal Government, or by the Councilwith the approval of Federal Government, as being equivalent to theexamination and training prescribed for membership of the Institute.

(2) The Council shall, as early as possible, take such steps as may be necessary for havingthe names of all such persons as are mentioned in clause (a) of sub-section (1) entered in the Register without any application being made in that behalf, or the payment of anyfee and the name of every such person so entered shall be deemed to have been enteredat the commencement of this Act for the purpose of sub-section (1) of section 3.

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(3) Every person belonging to any of the classes mentioned in clauses (b), (c) and (d) of sub-section (1) may have his name entered in the Register on an application made to andgranted by the Council in the prescribed manner and on payment of the prescribed fee.

“5 Associates and Fellows.-

(1) Save as otherwise provided in the Act, the members of the Institute shall be dividedinto two classes designated as fellows and associates.

(2) A person, other than a person mentioned in sub-section (3) shall, on his name beingentered in the Register, be an associate and, so long as his name remains so entered,shall be entitled to use the letters A.C.M.A after his name to indicate that he is anassociate of the Institute.

(3) The name of a person who was, immediately before the commencement of this Act, afellow of the dissolved company shall be entered in the Register as a fellow of theInstitute; and such person, so long as his name remains so entered, shall be entitled touse the letters F.C.M.A after his name to indicate that he is a fellow of the Institute.

(4) A person who has been an associate for a continuous period of not less than five yearsand who possesses such qualifications as the Council may prescribe, may apply to theCouncil for admission as fellow; and if the Council grants his application, his nameshall be entered in the Register as a fellow:

Explanation.- In computing the continuous period during which a person has been anassociate of the Institute, there shall be included any continuous period during whichhe has been an associate of the dissolved company, immediately before he became anassociate of the Institute.

(5) The decision of the Council on an application under sub-section (4) shall be final.

“6. Certificate of practice.-

(1) No member of the Institute shall be entitled to practise within Pakistan unless he holdsa certificate of practice granted by the Council.

(2) The Council may grant a certificate of practice to a member of the Institute, who applies in the prescribed form and pays the prescribed annual fee for such certificate.

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(3) Every member holding a certificate shall pay the annual fee for every year, which shallbe due on the first day of July of that year.

(4) A certificate of practice shall be liable to be cancelled for default in payment of theannual fee for any year.

“7. Members to be known as Cost and Management Accountants: -

(1) Every member of the Institute in practice shall, and every other member may use thedesignation of Cost and Management Accountant;

(2) No member of the Institute in practice using the designation of Cost and ManagementAccountant shall use, whether in addition thereto or in substitution therefore, anyother costing designation;

Provided that nothing in this sub-section shall be deemed to prohibit any such memberfrom adding any other description or designatory letters to his name, if entitled thereto, to indicate membership of such other institute of accountancy whether in Pakistan orelsewhere, as may be recognized by the Council in this behalf, or any otherqualification that he may possess, or to prohibit a firm, all the partners of which aremembers of the Institute in practice, from being known by its firm’s name as Cost andManagement Accountants.

“8. Notwithstanding anything contained in Section 4, a person shall not be entitled to havehis name entered in or borne on the Register if he. -

(i) has not attained the age of twenty-one years at the time of his application for theentry of his name in the Register; or

(ii) is of unsound mind and stands so adjudged by a competent court; or

(i) is an un-discharged insolvent; or

(ii) having been discharged of insolvency, has not obtained from the court acertificate stating that his insolvency was caused by misfortune without anymisconduct on his part; or

(iii) has been convicted by a competent court, whether within or outside Pakistan, ofan offence involving moral turpitude and punishable with imprisonment, or ofan offence, not of a technical nature, committed by him in his professional

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capacity, unless in respect of the offence committed he has either been granted apardon, or, on an application made by him in this behalf, the FederalGovernment has, by an order in writing removed the disability; or

(iv) has been removed from the membership of the Institute on being found oninquiry to have been guilty of professional or other misconduct :

Provided that a person, who has been removed from membership for a specifiedperiod, shall not be entitled to have his name entered in the Register until theexpiry of such period.”

The Regulations made under the Act describe the procedure of admission of themembers. It is as under: -

“(1) An applicant for admission as an Associate or a Fellow shall satisfy the Councilof his having fulfilled the conditions specified by the Act and these Regulationsin such manner as the Council may deem necessary and the Council, being sosatisfied, shall admit him on payment of the prescribed fees. The application ofmembership shall be on form “B” and shall be submitted to the Secretary.

“(2) Every person before becoming a member shall undertake to be bound by the Actand the Regulations in force at the time of his admission or which may thereafterfrom time to time be made.

“(3) Admission as Fellows:- A person who has been an Associate member of theInstitute for a period of not less than five years may, on application in form ‘B’and subject to fulfillment of other conditions prescribed in the Act and theRegulations be admitted as a Fellow, if he has for a period of five yearsimmediately prior to the date of application, held position as Chief Accountant,Chief Cost and Management Accountant or an equivalent appointment bywhatever name designated in an organization acceptable to the Council, or hasbeen in practice for a similar period as a Cost and Management Accountant,provided that nothing herein shall prelude the Council from electing inexceptional cases an Associate member as Fellow member.”

If an application for membership is accepted by the Council, the applicant’s name isentered in the Register and a Certificate of Membership under seal is issued to him.

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Membership Profile:

One of the yardsticks of the success of a professional accounting body is the periodicalincrease in the number of its members. If one looks at the statistics of the Institute’s members,one finds that their number has grown from only two in 1951 to 2928 in 2006. Table VIIIshows the year-wise growth of the Institute’s membership, which had admittedly been veryslow until 1996, with some years being notable exceptions. The trend changed in 1997 andhas since then been on the up swing. The years 1999, 2000, 2002, 2003, 2004 and 2006 havebeen particularly good years, as the number of members who applied and were admitted asFellows and Associates during these years registered very high growth rates. This was, onthe one hand, an indication of the members’ growing confidence in the Institute and itsservices to them and, on the other, a measure of the country’s economic turnaround.

Of the Institute’s 2928 members as of July, 2006, 704 are Fellows and 2224 Associates. Theyare scattered throughout Pakistan and in as many as 31 countries of the world. Those inPakistan total 2508 – 619 Fellows and 1889 Associates. The number of members abroad comes to 420 – 85 Fellows and 335 Associates.

A telling figure in members’ statistics relates to females. There are about 80 female membersof the Institute. Although this figure represents not even 2.75 per cent of the totalmembership, it does indicate a welcome trend. In a society where females have never beenknown for propensity towards accounting, it should be taken as an encouraging change thatthese many females have been able to qualify for the Institute’s membership. It wasparticularly in the early seventies that female students started to get interested in theInstitute’s courses because of the opportunities of bright new careers they had opened. Thefirst female student, Miss Roohi Qureshi, passed the Final Examination in 1975-76 andbecame the first lady member to be admitted.

Where in Pakistan are the Institute’s members serving or practising? Their largestconcentration is found in Karachi : 1084. Then comes Lahore where there are 624 of them,followed by Islamabad where they number 432. The city-wise break-up of members inPakistan is given on next page.

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City-Wise Membership(Pakistan)

City Fellows Associates TotalAbbottabad 2 2 4Attock 1 0 1Bahawalpur 1 2 3Bhai Pheru 0 1 1Dera Ghazi Khan 0 3 3Faisalabad 9 50 59Gilgit 0 2 2Gujar Khan 0 1 1Gujranwala 1 16 17Gujrat 1 3 4Hafizabad 0 1 1Haripur Hazara 0 1 1Hattar 1 3 4Hub 0 1 1Hyderabad 3 4 7Islamabad 89 343 432Jacobabad 0 1 1Jamshoro 0 3 3Jhang 0 1 1Jhelum 0 2 2Kabirwalal 0 1 1Karachi 323 761 1,084Kashmore 1 1 2Kasur 0 5 5Khewra 0 2 2Khushab 0 1 1Kohat 1 0 1Kot Addu 0 1 1

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Lahore 123 501 624Lakky Marwat 0 1 1Lasbella 0 4 4Lodhran 0 1 1Mansehra 1 0 1Mian Channu 0 1 1Mianwali 2 3 5Mirpur (AK) 3 3 6Multan 13 30 43Muzaffarabad 0 2 2Muzaffargarh 4 6 10Nowshera 0 1 1Okara 1 2 3Peshawar 3 8 11Quetta 2 5 7Rahimyar Khan 2 1 3Raiwind 0 1 1Rawalpindi 23 72 95Sahiwal 0 3 3Sargodha 0 1 1Sheikhupura 3 5 8Sialkot 0 10 10Skardo 0 1 1Sukkur 0 1 1Swabi 0 2 2Swat 0 1 1Tarbela 0 1 1Taxila 2 2 4Thatta 0 1 1Vehari 0 1 1Wah Cantt 4 6 10Total 619 1,889 2,508

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Most of the Institute’s members are in employment and hold middle and high-levelmanagement positions in industrial and commercial sectors and in Government. Theirsector-wise absorption is as follows:

Sector-Wise Membership

SECTOR Fellows Associates Total

Auto & Allied 13 51 64

Aviation 4 19 23

Bank/DFI's/Modaraba/Leasing/Investment 35 195 230

Brokerage [Shares] 6 21 27

Cables & Electrical Goods/Electronic 7 12 19

Cement 6 24 30

Chemicals 10 31 41

Communications 5 27 32

Construction / Housing 11 39 50

Consulting 4 23 27

Defence Production 2 12 14

Education 31 98 129

Engineering 15 48 63

Fertilizer 6 16 22

FMGS 16 83 99

Fuel Energy Exploration & Processing 21 89 110

Fuel Energy Marketing 3 24 27

Glass & Ceramics / Plastic 2 10 12

Govt. Organizations/Autonomous Bodies 44 178 222

Healthcare 4 19 23

Hotel 11 14 25

Information Technology 5 33 38

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Insurance 26 46 72

Iron & Steel 6 17 23

Leather 3 7 10

Media and Broadcasting Services 3 13 16

Non-Govt.Organizations (NGOs) 2 30 32

Paper & Board/ Printing / Packages 7 29 36

Pharmaceutical 25 60 85

Power Generation 20 62 82

Practicing Accountants / Professioanl Firms 66 126 192

Sugar 6 11 17

Telecommunication 18 118 136

Textile 42 169 211

Tobacco 3 4 7

Trading, Imports & Exports 11 42 53

Retired 107 38 145

Manufacturing-Others 18 102 120

Services-Others 7 44 51

Others 73 240 313

Total 704 2,224 2,928

As can be seen from the above table, the largest number of the Institute’s members – 230 – isemployed in banks and DFIs. The second highest employers of the Institute’s members areGovernment organizations and autonomous bodies which have taken 222 of them. Nextcomes the textile industry which has absorbed 211. Leather industry has employed only 10and telecommunication sector only 17. One hundred forty five members have either retiredor become professionally inactive. They include 107 Fellows and 38 Associates.

A substantial number of the Institute’s members –192 – are either doing their own practice orare employed in professional firms. Forty-six Fellows and thirty-nine Associates haveestablished their own individual practice.

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Both in employment and in practice, the Institute’s members are rendering highly effectiveservice as management accountants and management consultants. However, it must beregretfully admitted that their position in practising business is not as sound as that of themembers of other disciplines engaged in the field of management consultancy. Members ofother disciplines have stronger statutory support of the Government, are financially stronger and have well-established offices of their audit firms in different cities of Pakistan. The resultis that the majority of the management consultancy business is in the hands of other than theInstitute’s members. Presently, there are about 500 practising firms of CharteredAccountants within and outside Pakistan, whereas ICMAP members have only about 85.

The Institute’s Council realizes this situation and has been taking steps to improve it. It has,in the recent revisions of the Institute’s syllabus, placed special emphasis on better preparingthe students for handling management consultancy assignments more efficiently and withimproved knowledge and skills. The Institute now imparts high quality education andtraining in all aspects of management consultancy and its qualified members are now bettertrained to offer all of the following services in the field of management consultancy:

Financial management planning.

Preparing project/feasibility reports.

Preparing profitability statements.

Preparing capital budgets and revenue budgets.

Inventory management

Price fixation.

Cost control and value analysis.

Management audits.

Business policy and corporate planning.

System analysis and design and computer-related services.

Installation of accounting systems.

In addition to management consultancy, the following fields of practice are available to Costand Management Accountants in Pakistan:

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a. Statutory

(i) Cost Audit:

Cost and Management Accountants along with Chartered Accountants are eligible toconduct cost audit of companies. The story of how this provision was included in theCompanies Ordinance is worth telling.

The Institute, since the very beginning, had been making consistent efforts to convincethe Government to introduce necessary provisions in the corporate laws for makingcost audit obligatory for all manufacturing companies but not to much avail. However,in 1980, when the Draft Companies Ordinance was issued by the Government forcomments, the Institute got a welcome opportunity to accelerate its efforts in thisdirection. Mr. Riayz H. Bokhari, the then President of the Institute, formed a committeeto study the draft Ordinance and formulate recommendations. In January 1981, a 3-member delegation of the Institute, comprising Mr. Riyaz H. Bokhari, President, Mr.Mahmood Ashraf, Honorary Secretary and Mr. Abdul Mateen Ansari, ExecutiveDirector, held a meeting with the then Finance Secretary to impress upon theGovernment the need for making Cost Audit obligatory for manufacturing companies.Later in the same year, two follow-up delegations of the Institute met the Chairman,Corporate Law Authority to discuss incorporation of provisions for Cost Audit in theOrdinance. The first delegation was led by Mr. H U. Butt, Vice President of the Instituteand the second by Mr. Riyaz H. Bokhari, President. In addition, Mr. Abdul MateenAnsari, Executive Director of the Institute, who was on the Advisory Council of theFinance Division, continuously insisted upon the Government to accept therecommendations submitted by the Institute for introducing Cost Audit in the country. Eventually, in 1984, the Government promulgated the Companies Ordinance whichincluded a new Section 258 relating to the audit of cost accounts of companies andallowing both the Cost and Management Accountants and the Chartered Accountantsto conduct cost audit. It was after the promulgation of the Ordinance that the Institutestarted preparing draft Cost Accounting Records Rules, which will be discussed indetail later in the book.

Section 258, as incorporated in the Ordinance, was not to the Institute’s full satisfactionas it did not reserve cost audit as an exclusive domain for the Cost and ManagementAccountants. The Institute, therefore, submitted a recommendation to the CorporateLaws Review Commission (CLRC) in 2005, suggesting that the audit of cost accountsshould be exclusively allowed to the Cost and Management Accountants as they arespecialized in this particular field and possess the required qualification and skills toconduct cost audit. Efforts still continue to get this recommendation accepted.

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As per the Companies (Audit of Cost Accountants) Rules, 1998, Cost Audit is to beconducted every year in all industries for which Cost Accounting Records Orders havebeen issued by the Securities and Exchange Commission of Pakistan (SECP).

(ii) Sales Tax Audit:

The Sales Tax Act 1990 provides that the Central Board of Revenue (CBR) may appointChartered Accountant (or a firm of Chartered Accountants) or a Cost & ManagementAccountant (or a firm of Cost and Management Accountants) for conducting specialaudit of records of persons registered under the Act. The Act further provides that inspite of audit having been taken place by an officer of Sales Tax, the Board or Collectormay direct an Auditor to audit the records of any registered person. In pursuance ofthese provisions, twenty-eight Cost and Management Accountants were appointed in2000 as Special Auditor by CBR. Another thirty have been notified in 2006.

(iii) Certification of Accounts of Private Companies

The Income Tax Ordinance 1979 provides that Income Tax Return of a PrivateCompany with share capital of Rs. 500,000 or more should be supported with Accountscertified by a Chartered Accountant or a Cost and Management Accountant. Thisprovision entitles Cost and Management Accountants, along with CharteredAccountants, to audit the Accounts of Private Companies whose capital is Rs. 500,000or more for purposes of Income Tax Return. A large number of such companies existsbut very few Cost and Management Accountants have been able to take advantage ofthis provision. Most of such companies either get their accounts audited by CharteredAccountants or take advantage of a clause, under which Deputy Commissioners ofIncome Tax can make the assessment at their discretion.

(iv) Certification of Accounts/Stocks under State Bank of Pakistan’s PrudentialRegulations:

State Bank’s Prudential Regulations provide that re-valuation reserves determined byapproved firms of Chartered Accountants/Cost and Management Accountants, inaccordance with International Accounting Standards, would also count as equity. TheRegulations also make it mandatory for every bank to obtain a copy of accountsrelating to the business of each of its borrowers of loans exceeding Rs.500,000 foranalysis and record. In cases where the exposure exceeds Rs.2 million, the accountshave to be counter-signed, among others, by a Cost and Management Accountant in

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case of the borrower being other than a public company, or a private company which isa subsidiary of a public company.

(v) Audit of Sales Tax Refund Claims:

As per Finance Act 2006 and under Section 32A of the Sales Tax Act, 1990, the Cost andManagement Accountants are also eligible to conduct audit of sales tax refund claims.

(vi) Audit of Records of Registered Persons under Federal Excise Act:

Under Federal Excise Act, 2005, the Cost and Management Accountants are eligible forappointment as auditor to conduct audit of the records and documents of any personregistered under this Act.

(vii) Certification of Audited Accounts of Non-Profit Organizations (NPOs):

The Cost and Management Accountants are eligible to attest copies of balance sheetsand of revenue accounts of Non-Profit Organizations (NPOs) under Rule 211 of theIncome Tax Rules, 2002, as notified vide SRO 774 dated 29 July 2006, by the CBR.

(viii) Certification of Accounts of Leasing Companies:

As per the Leasing Companies (Establishment and Regulation) Rules, 2000, where thefinancial exposure exceeds Rs. 2 million but does not exceeds Rs. 10 million, theaccounts could be certified by a practicing Cost and Management Accountants.

(ix) Certification of Accounts of Modaraba Companies:

The Cost and Management Accountants are also authorized by the SECP to certify theaccounts of a Modaraba company, where exposure exceeds Rs. 2 million but does notexceed Rs. 10 millioin.

(x) Appointment as “Chief Accounting Officer” of a Leasing Company:

As per the Leasing Companies (Establishment and Regulation) Rules, 2000, issued bythe Securities and Exchange Commission of Pakistan, a Cost and ManagementAccountant is eligible for appointment as the Chief Accounting Officer of a leasingcompany.

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(xi) Appointment as “Financial or Chief Accounting Officer” of a NBFC:

As per the Non-Banking Finance Companies (Establishment and Regulation) Rules,2003, issued by the Securities and Exchange Commission of Pakistan, a Cost andManagement Accountant is eligible for appointment as the Financial or ChiefAccounting Officer of a Non-Banking Finance Company (NBFC).

(xii) Appointment as Sales Tax Electronic Intermediary:

The Cost and Management Accountants, having sufficient physical and informationtechnology infrastructure, can also be appointed as electronic intermediary, under theSales Tax Electronic Intermediaries Rules, 2006 issued by the Central Board ofRevenue.

(xiii) Appointment as Inspector to investigate affairs of Companies:

The Cost and Management Accountants are eligible to be appointed as Inspectors bythe Securities and Exchange Commission of Pakistan, to investigate the affairs of thecompanies under Sections 263 and 265 of the Companies Ordinance, 1984.

(xiv) Appointment as Member of ADR Committee:

Cost and Management Accountants can also be appointed as members of Committeeson Alternate Dispute Resolution (ADR). The Central Board of Revenue (CBR), vide itsSRO 540(I)/2006 dated 5th June 2006, has notified a panel of 69 persons for constitutionof Committees on Alternate Dispute Resolution (ADR). The panel includes five Costand Management Accountants.

b. Non-Statutory:

The following general fields are open for Cost and Management Accountants:

Act as LiquidatorAct as TrusteeAct as ExecutorAct as Administrator Act as Chief Financial OfficerAct as Internal Auditor and Secretary

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Act as Receiver Act as Advisor Act as representative in costing, financial, company law and taxation matters.Take up any appointment made by Federal or Provincial Governments, Courts of Lawor any other authority established under the law.Act as Secretary of a company in his professional capacity, not being a whole- timesalaried employee.

Besides serving their own country, members of the Institute are also playing their part in theeconomic development of other countries. Four hundred and twenty of them are presentlyserving abroad. Country-wise membership of the Institute is as under: -

Country-Wise Membership(Overseas)

Country Fellows Associates TotalAfghanistan 0 3 3Australia 2 8 10Bahrain 3 7 10Belgium 1 0 1Bermuda 0 1 1Botswana 0 2 2Canada 17 70 87Croatia 0 1 1Georgia 1 0 1Indonesia 0 2 2Italy 0 1 1Kenya 0 3 3Kuwait 2 4 6Luxembourg 0 1 1Malawi 1 0 1Malaysia 2 3 5Nigeria 2 1 3

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Oman 1 12 13Qatar 0 2 2Romania 0 1 1Saudi Arabia 28 88 116Singapore 1 0 1South Africa 0 2 2Sri Lanka 1 0 1Switzerland 0 1 1Thailand 1 0 1U.A.E. 9 65 74U.K. 4 39 43U.S.A. 7 17 24Yemen 0 1 1Zambia 2 0 2Total 85 335 420

As is reflected in the above Table, Saudi Arabia is the largest beneficiary of the services of theInstitute’s members. Their number in that country is 116. There are 87 members in Canada, acountry with which the Institute has had a long relationship dating back to its formativeyears. Forty three members of the Institute are to be found in the United Kingdom, on thelines of whose Institute of Cost and Works Accountants it had originally been modelled.

But regardless of where they are, the Cost and Management Accountants are today anintegral part of the management team in business organizations. They make effectivecontribution in preparing short and long-term plans and in achieving the optimumproductivity out of the available resources. Because of their specialized knowledge andskills, they are providing services in designing and installing the accounting and information systems, preparation of feasibility reports, setting-up small and medium-sized industries,monitoring of projects, revival of sick units and performance evaluation. The Institute’spractising members are providing quality services in tax-advisory, management consultancy and cost audit. They have also been engaged in special audit of tax cases and Sales Tax auditassignments.

How much does one pay to be admitted to the Institute’s membership and how much does he have to pay annually to retain his membership can be found out from Table IX.

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Chapter Eight

Keeping Up-to-Date

“My last lesson will be in my death”. Such burning desire to continue learning till onebreathes his last may not be common in men save the truly great. However, the importance of continuing to learn that these words connote is true of all professionals. No professional canafford to close the books or his ears and eyes after coming out of his professional school andlet the unfolding new knowledge, new techniques and new innovations pass by himunnoticed. If he commits such a mistake, he soon finds himself left by the wayside by theadvancing march of technical knowledge, out of step with time and, more agonizingly, out of demand. Who will feel comfortable being attended by a doctor who had qualified in 1950 and has made no further studies since? This is true of all professionals, especially of thosebelonging to professions fast developing and progressing with the passage of time. Hencethe imperative need for continuing professional education for all professionals, management accountants being no exception. The management accountants must constantly endeavour to know, understand and assimilate the current trends. They must try to keep up-to-date withthe latest developments in their area of work, thereby saving their technical knowledge andskills from becoming obsolete. They must ensure that the quality of their knowledge and thestandards of their service at all times measure up to the expectations of their employers ortheir clients in this age of merciless competition.

But updating one’s technical knowledge and keeping current is something which neither theindividual management accountant nor his professional body can do alone. In the case ofnormal educational institutions, once a student passes out, enhancing his knowledge furtheris supposed to be his own responsibility. But management accountants are the products of aprofessional institute and professional institutes hold out a generalized promise ofproficiency of their members and cannot absolve themselves of the responsibility withregard to their technical know-how so long as they remain members of the profession. Truethat the individual member has to continue to keep learning on his own through reading,experience and observation of what is going on and coming up in the realm of his profession.But equally true is the fact that in today’s world, where so much is happening so fast, so many

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developments are taking place globally, such significant changes are being brought about inregulatory frameworks, in accounting standards, in legislation and taxation and suchrefinements are being made in modern technologies, particularly computers applicable tothe management accountants’ work area, that it is just not possible for any individual to keepabreast with them all. He needs help. He needs facilities. He needs guidance. And it is herethat his professional institute has to share the responsibility and play a role – the role of afacilitator, the role of a forum provider, the role of a fountain-head of continuing education.

The Institute of Cost and Management Accountants of Pakistan realizes the importance ofthis role too well to take it lightly. In fact, the Institute recognized the significance ofContinuing Professional Education (CPD) programme from the very beginning and pursued it as one of its avowed objectives, though resource constraints kept it from any ambitiouslaunching. For many years, activities related to CPD remained confined to the basics, such aslecture meetings, chapter discussions, conferences, etc. and were carried out in a manner thatwas not characterized by a systematically structured pattern. They lacked thoughtfulorganization and, at times, smacked of casualness. But the state of affairs changed graduallyand, over the years, the Institute developed and put in place a well-defined CPD programme.

IFAC Guidelines:

In this respect, the Institute grossly benefitted from the intellectual input of the InternationalFederation of Accountants (IFAC), whose broad objective is “the development andenhancement of a coordinated worldwide accountancy profession with harmonizedstandards”. In furtherance of this objective, IFAC has been providing guidelines to itsmember bodies on CPD. These guidelines have helped them substantially in themaintenance and updating of technical knowledge of their members and the enhancement of their judgment, attitude and ability to apply appropriate principles to practical situations inan environment of socio-economic change.

In its guidelines issued in 1982, IFAC recommended two types of learning under CPD i.e.structured and unstructured learning activities. The examples of these two learning activities were provided as under:

1. Examples of structured learning activities:

(i) Courses run by or under the auspices of member bodies of programmes.

(ii) Study undertaken for the purpose of preparing the student for a post-qualification e.g. a specialist qualification in taxation.

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Chapter Eight: Keeping Up-to-Dates

(iii) Studies undertaken after qualification with a view to preparing the candidate for a post-graduate degree.

(iv) Suitable courses run by a University or other appropriate institution.

(v) Relevant courses run by a member firm in public practice, by an industrialcompany or other business organization.

(vi) Courses run by a private educational establishment of a standard comparable tothat described in (i) above.

(vii) Correspondence courses, audiotapes or videotape packages, courses ofprogrammed texts or other individual study programmes which requireparticipation of the member.

(viii) Writing of technical articles, papers or books.

(ix) Working as a lecturer, instructor, or discussion leader on a structured course(repeat presentation of the course should not be considered for this purpose).

(x) Participation in conferences, briefing sessions or discussion groups (wheretechnical material is prepared by the member).

(xi) Service as a member of technical committee of professional body or individualfirm (to the extent that technical material is prepared or reviewed by themember).

(xii) Service as a member of the examining board of an IFAC body (to the extent thattechnical material is prepared or reviewed by the member).

2. Examples of unstructured learning activities:

(i) Reading technical, professional, financial or business literature.

(ii) Use of audiotapes, videotapes, correspondence courses etc.

(iii) Participation in meetings, briefing sessions or discussion groups(where no technical material is prepared by the member).

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Chapter Eight: Keeping Up-to-Date

(iv) Service as a member of a Technical Committee of a professional accounting body or individual firm (where no technical material is prepared or reviewed by themember).

The following details of these activities were provided in IFAC’s guidance issued in 1998:

“Structured learning activities” are measurable, verifiable activities that are designed toimpart specific technical and general knowledge. Examples would include coursespresented by educational institutions, member bodies or employers; individual studyprogramme (correspondence courses, audiotape or videotape packages, computerizedlearning programmes) that require some evidence of successful completion by the member,and participation as a speaker or attendee in conferences, briefing sessions or discussiongroups.

“The Federation suggests that each member who is active as an accounting professionalshould participate in a minimum of 30 hours per year, or a minimum of 90 hours in eachthree-year period, of structured learning activity, whether compliance with that norm isvoluntary or mandatory. The recommended period of structured learning need not be takenin one span of time. It can also be made up by participation in a number of shorterprogrammes throughout the period. In making this recommendation, the Federationrecognizes that the effectiveness of CPD is best measured in terms of what has been learnedand has no intention to discourage efforts to establish other measurement criteria, that can bebroadly and cost-effectively applied within the accounting profession. However, it seemslikely that hours will continue to be the measurement criteria that is commonly used andaccepted for the near future.

“Although the Federation’s recommendation is applicable to all active accountingprofessionals, a member- body may reasonably conclude, based on an assessment of publicexpectations (which may focus on the independent auditor) and the circumstances in thecountry (e.g. the occupational classification of members, existing CPD requirements orguidance, and the availability of local educational facilities, qualified instructors, andappropriate instructional materials), that the norm should be applicable only to members inpublic practice or that it should be different for members working in industry, commerce,education and the public service. A member-body that draws a distinction betweenmembers based upon their occupations, should periodically review the continuingappropriateness of such a distinction, in the light of future developments within the countryand in the international accounting profession. Also, member-bodies should consider whatadditional CPD, if any, should be obtained by members who decide to move into or return topublic practice.

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“It is for each member-body to determine what activities would qualify for recognition asstructured learning. In that connection, member-bodies should focus on the need for anactivity to be measurable and verifiable, as well as the need to meet appropriate learningobjectives. For example, acting as a lecturer, instructor or discussion leader on a structuredcourse would normally meet these criteria (but repeat presentations of the course should notbe considered for this purpose). Services as a member of technical committee of aprofessional body or individual firm may be deemed to be a structured learning activity, tothe extent a specific portion of the meeting is formally designed to impart specific knowledge in preparation for committee debate or discussion. Writing technical articles, papers or books may also be deemed to be a structured learning activity, within reasonable limits, since theoutput is clearly verifiable. There may also be special circumstances under which memberbodies permit the substitution of an intensive, measurable and verifiable “on-the-job”experience for structured learning, for a finite period of time. In general, however, onesingle, repetitive activity – for example, writing – should not comprise the entire extent ofsomeone’s CPD activity. Apart from participation in structured learning activities, there is acontinuing need for members of the profession to keep abreast of a wide range ofdevelopments affecting their profession, clients and employers. This is done throughunstructured learning activities, such as regularly reading professional journals and thefinancial and business press, discussing current developments with colleagues, accessingrelevant data bases on the Internet and other activities.

“Unstructured learning activities are important to every professional and the Federationrecognizes that some member bodies may wish to emphasize their importance by coveringthem in the norms they adopt. However, the Federation believes that a norm forunstructured learning should be an addition to, not a substitute for, the norm set forstructured learning. There are several reasons for this, and they are all related to the need tobe able to provide reasonable assurance to the public that the objectives of the memberbody’s CPD programme are being achieved. First, structured learning activities can beefficiently monitored and measured, while unstructured learning activities cannot. Second,structured learning activities are usually designed to achieve specific learning objectives,while unstructured learning activities are usually general and unplanned in nature. Third,structured learning activities usually depend on approved instructors and/or instructionalmaterials, while unstructured learning activities depend on the individual accountant.

“As they develop their programmes of CPD, member-bodies should keep under review theadequacy of the minimum recommended period in relation to the needs of their members.

“Some member-bodies may find that adequate educational resources are not yet available tomeet the needs of members wishing to observe the recommendations on CPD as outlined

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above. In these circumstances it may be necessary to adopt a programme of CPD which iscommensurate with immediately available resources and increases gradually to 30 hours per year (or 90 hours in every three- year period) over a reasonable period. Such a gradual butfirm plan is preferred, because it is likely to stimulate the development of necessaryeducational resources, while making a norm contingent on the development of thoseresources is likely only to delay implementation of the plan.”

The guidelines issued by IFAC in 1982 consisted of the following principal approaches orsystems:

a) Voluntary CPDb) Monitored Voluntary CPDc) Mandatory CPD

Details of these systems were given in the 1998 guidelines which were as follows:

“Under a voluntary system of CPD, it is entirely at the discretion of each individual as towhether and to what extent he or she participates in structured learning. Such an approachavoids the administrative burden of a system of mandatory CPD. It acknowledges that many members of the profession, recognizing their professional duty and their own self-interest,participate diligently, regularly and voluntarily in CPD, with a view to maintaining andimproving their technical knowledge. However, it does not deal with those members of theprofession who do not now obtain adequate CPD and whose participation in a voluntaryprogramme would be desultory, lacking in discipline and not seen as a professional priority.Moreover, a voluntary programme is not effective in persuading society at large of theprofession’s commitment to continuing professional education and professionalcompetence.

“Under a system of monitored voluntary CPD, members would have guidance addedmotivation, and an agreed norm under which to plan and measure their participation inCPD. For its part, the individual member body would have a measure of the extent to whichits members were observing its guidelines and adhering to the established norm.

“A system of mandatory CPD does not, in and of itself, pose administrative burdenssubstantially different from or greater than those necessitated by a system of monitoredvoluntary CPD. It does not require members eager to maintain and improve theirprofessional competence to participate in structured learning activities, to an extent greaterthan that which they would be likely to do voluntarily. At the same time, it deals effectivelywith the problem of the less committed member; it provides reasonable assurance to society

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at large that members of the profession have the technical knowledge and professional skillsrequired to perform the services they undertake to provide; and it contributes to theFederation’s objective of “the development and enhancement of a coordinated worldwideaccountancy profession with harmonized standards.”

In making this recommendation, the Federation recognized that some member-bodies maynot, because of legal or other environmental constraints, presently have the ability toimplement a system of mandatory CPD and/or enforce compliance with it. However, theFederation did issue some guidelines for monitoring CPD which are reproduced below:

“1. A member-body would need to set up its own system for monitoring participation byindividual members in structured learning activities and for evaluating the quality ofthose activities. It is suggested that a member-body consider setting up a board orcommittee under its control that would be charged with those responsibilities.

“2. The monitoring of participation in structured learning activities can be done in anumber of ways. One approach is to require the member to submit an annual report ofCPD activities. Individual reports submitted by a representative sample of themembers should be checked against attendance or completion documents provided tothe member by the individual or entity responsible for the CPD course or activity. Itwould be desirable to require these annual reports to identify the specific structuredlearning activities in which the member has engaged, rather than to accept a simplerepresentation as to compliance with the requirement. This allows the member-body to skim the reports for overall reasonableness and facilitates checking reports tosupporting information. Another approach to monitoring is one in which theindividuals are required to maintain documentation on their CPD activities, which themember-body “audits” on a selective sampling basis.

“3. Evaluating the quality of structured learning activities offered to members of theprofession at large, and the CPD credit to be granted for participation, can be done byapproving the providers of those programmes or by approving individualprogrammes. Approving programme providers is often more efficient, and wouldfocus on the procedures and controls instituted by the providers to insure thatprogrammes are prepared, reviewed and conducted by qualified individuals, that thelearning objectives are appropriate for the intended participants and achievable withinthe time allotted for the programme, and that the instructional materials, includingcase studies, are sufficiently comprehensive and properly designed. Whicheverapproach is taken, the member body should subsequently monitor offerings of actual

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programmes on a test basis. Member bodies have a right to expect to be compensatedby these providers for the costs incurred in making these evaluations.

“4. Evaluating the quality of structured learning activities presented by accounting firmsor other employers may be more difficult because the documentation of theprogramme may be more informal because the programme may be presented onlyonce or a few times to a limited number of people. Evaluating the CPD content of otheractivities, such as service on technical committees and writing articles, may posedifferent difficulties.

“5. The Federation recognizes that in establishing the norms and procedures for a systemof mandatory CPD, each member-body will have regard to such matters as theoccupational classification of its members, its existing CPD requirements or guidance,and the availability of local educational facilities, qualified instructors, and appropriate instructional materials”.

CPD Programme:

The term used to denote the process of continuously updating professional knowledge andskills has only recently been changed from Continuing Professional Education (CPE) toContinuing Professional Development (CPD). By whatever name we call it, the Institute’sprogramme of continuous learning has been in place as a formal activity since 1994. It was inthe early months of that year that the ICMAP Council formed a committee to streamline theInstitute’s CPD programme, make it more effective and implement it on a regular basis. Thecommittee deliberated the issue in detail in the light of IFAC guidelines, the practice in othercountries and Pakistan’s objective conditions and prepared a report prescribing theminimum CPD hours to be completed by the members during a calendar year, allottinghours for each CPD activity and laying down the requirements of hours for variousqualifications. The Council approved the committee’s proposals and decided to make themeffective from 1st July 1994.

One of the most important and far-reaching decisions of the Council was to makeparticipation in CPD activities applicable to all members. This provided a much-neededstimulus to CPD activities and forced the members to renounce their casual attitude towardsthem and take them as a serious pursuit. This decision was taken in view of theunquestionable importance and value of CPD for professionals, which had by then not onlyearned acknowledgement throughout the world, but were also being given practicalrecognition and pronounced emphasis in the work programmes of almost all types ofprofessional institutes. The Council was fully aware that keeping up-to-date with

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professional knowledge and skills was no more a matter of individual discretion but ofinstitutional compulsion. If a member’s proficiency does not come upto the professionalstandard, it will not be considered as a failing merely on his own part, but will reflectadversely on the entire professional body and will cause a question mark to be put on thequality of his institute. Lack of interest in further learning on the part of individual memberscould not be allowed to undermine the reputation and standing of their Alma Mater and alltheir colleagues in the profession. The Council, therefore, decided to make participation inCPD activities mandatory for all members and qualified students of the Institute throughouttheir professional career.

The Council also constituted a CPD Committee to implement the proposals, to monitor themembers’ CPD activities, to set up standards and rules, to provide guidance to members andto keep them informed about seminars and conferences, participation in which will earnthem credit hours. The Committee was also charged with the responsibility of identifyingevery year certain thrust areas and organizing a chain of seminars and conferences on topicsthus identified on regular basis.

The requirements of CPD hours for members have been changed by the Council from time totime. The present position is outlined below:

(a) Applicability:

o The CPD hours are applicable to all members/senior students (P-III & P-IV).

o Exemption is granted to ill, incapacitated and retired members.

(b) Minimum hours to be completed during a calendar year:

o Practising Members (For renewal of COP) 30 hourso Practising Members (For new COP) 20 hourso Non-Practising Members 20 hourso Members overseas 5 hourso For Admission to Associate Membership 20 hours (overall)o For Admission to Fellow Membership 20 hours

(c) For Members Based in Remote Areas:

Stations other than Karachi, Lahore and Islamabad, located beyond a radius of 50 KMfrom these cities are treated as Remote Areas for the purpose of CPD and CPD hoursrequirement for the members of these areas are as follows:

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o Fellows / Associates / Students 10 hourso Certificate of Practice (New) 10 hourso Certificate of Practice (Renewal) 15 hours

(d) CPD Activities:

CPD Activity Hours

1. Participation in Seminar or Workshop 1. Within Pakistan of an hour for actual participation.

2. Abroad one hour of actual participation.

2. Lecturers at a Seminar / Workshop Eight hours per seminar or workshop

3. Participation in CPD Committee’s approved conferences as:a. Paper Writerb. Chairman of a Technical Session

c. Commentatord. Study Group Leader (above credit is in addition to actual hours participation)e. Participantf. As Member Seminar/Conference Committeeg. As Council Member or as a Member ofa Committee set up by the Council ofICMAP

Eight hoursActual hours subject to a maximum of threehoursTwo hoursTwo hours

One hour for every participationTwo hours for each meeting

One hour for every four hours of actualparticipation.

4. Contributing articles of professional importancein a professional journal

Eight hours per article

5. Writing an article for the Institute’s journal

Eight hours per article

6. Member submitting Technical Paper/Report to a National Council Committee

Three hours per paper/ report

7. Report / Comments on exposure draft of International Accounting Standards,provided the report/comments arecleared by the Council for submission to IAS Committee

Eight hours

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8. Drafting Cost Audit Rules/ Regulations Fifteen hours

9. Reviewing draft of Cost Audit Rules/ Regulations

Two hours

10. Contributing a research paper to the Institute’s Research Department

Five hours

11. Completing any computer course from ICMAP computer centres

One hour for every four hours of trainingtime

(e) Recognized Institutions for CPD Hours:

1. Institute of Chartered Accountants of Pakistan (ICAP)2. Institute of Corporate Secretaries of Pakistan (ICSP)3. Chartered Institute of Management Accountants (CIMA)4. Lahore Institute of Management Sciences (LUMS)5. South Asian Federation of Accountants (SAFA)6. Confederation of Asian and Pacific Accountants (CAPA)7. International Federation of Accountants (IFAC)8. Institute of Business Administration (IBA)9. Bahauddin Zakaria University, Multan (BZU)10. Aims Investment Advisory Company (AIAC)11. Pakistan Institute of Public Finance Accountants (PIPFA)12. Pakistan Consortium of Governmental Financial Management (PCGFM)13. Management Association of Pakistan (MAP)14. Memon Professional Forum (MPF)15. Income Tax Bar Association, Karachi.

Seminars and Conferences:

Major thrust in the Institute’s CPD programme is on seminars and conferences which serveas fora for learning from the ideas and experiences of eminent personalities, professional big-wigs, subject experts, colleagues of higher standing and peers. Exchange of views andsharing of experiences on subjects of theoretical importance as well as practical value help inimproving the professional competence of members both in employment and in practice andassist in widening their mental horizons, enlarging their perspective and enhancing their

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professional grasp. Discussions ensuing after presentations at these gatherings open upminds, unfold new dimensions and make the participants look at problems and solutions in a new light and from different, wider and varied angles. The P.R. aspect of seminars andconferences and the opportunity they present for contact-making are an additional bonus.

The Institute’s National Council, Branch Councils and all the chapters have, from thebeginning, been exhibiting keen interest in organizing lecture meetings, workshops,seminars and conferences. With the formation of the CPD Committee in 1994, efforts in thisregard, which had thitherto been haphazard in nature and undertaken as and whenopportunities arose, began to be regulated with a definite sense of direction and organizedregularly in a purposefully planned manner. The emphasis also shifted to subjects of moreimportance from the practical point of view and to issues of topical relevance. Jointprogrammes with organizations having coinciding interests, such as ICAP, were also addedto the schedules of events. As a result, frequency of seminars, conferences, extension lectures, workshops, etc. has increased so much that hardly a month passes without some seminars,conference, or workshops at one or the other centre of the Institute.

Just to give an idea of the Institute’s CPD programme, presented below are titles / topics ofseminars and conferences organized at various centres since the start of the new millennium.

1999 – 2000

KarachiInterest-Free Financial SystemLecture on Personality Development through NLPProspects of Education in Pakistan in the New MillenniumPre-Budget SeminarPost-Budget SeminarGolden Jubilee Conference (Adding Value to Business)Training of Trainers8th Pakistan International Educational ExhibitionCost AuditISO 9000Fight against CorruptionImpact of IT on Accounts

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Role of Management AccountantsShoaib Memorial LectureSales TaxResource PlanningCareer DevelopmentPortfolio ManagementSeminar on Y2K

LahoreRe-engineering of Business ProcessDevelopment of National EconomyPre-Budget SeminarPost-Budget SeminarCareer Development for Accounting ProfessionCorporate Performance through Management AccountingInternational Educational ExhibitionShoaib Memorial LectureEnterprise Resource Planning

IslamabadE-CommerceWorkshop on Self-AssertivenessTax Amnesty SchemePre-Budget SeminarInter-personal Communication SkillsCorporate Performance EvaluationPresentation and Report-Writing SkillsComputer ApplicationsTalent ExhibitionShoaib Memorial LectureInternational Educational ExhibitionRevised and New International Accounting StandardsImpact of Information TechnologyWorkshop on C.P.E.

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Multan

Accountancy and Fight Against Corruption

2000 – 2001

KarachiTax Reforms MeasuresPre-Shipment Export Finance Guarantee SchemeHoly World Economic OrderP & G Recruitment SeminarInternational Public Sector Accounting Standards (IPSASs)Pre-Budget SeminarSeminar on E-Commerce“Adding Value to Business” - Golden Jubilee ConferencePost-Budget SeminarCore Skills Development Programmes for Students

LahoreEnterprise Resource Planning (ERP)Information Technology in Decision-Making and ManagementAmendments in Income Tax OrdinanceCorporate GovernanceGolden Jubilee Seminar – Adding Value to BusinessIFAC IT Seminar on “IT for All – All for IT”Economic Development for Wider ProsperityRisk ManagementInformation Technology: Emerging Application in PakistanElectronic CommerceIntellectual CapitalPre-Budget SeminarE-Commerce

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16th Shoaib Memorial Lecture on Management Accounting in the 21st Century

IslamabadPre-Budget SeminarPost-Budget SeminarGolden Jubilee Celebrations Seminar on “New Horizon of Management Accountingand Information Technology”International Public Sector Accounting StandardsPresentation and Communication Skills16th Shoaib Memorial Lecture

MultanGolden Jubilee Celebration Seminar on Adding Valueto Business with SpecialReference to Textile SectorComputer Crimes and Frauds

Faisalabad

Seminar on “Amendments in ITO, 1979" and ”Duty and Tax Remission for ExportRules, 2001"

Quetta

Golden Jubilee Celebrations Seminar on Taxation

2001-2002

KarachiDraft Income Tax Ordinance, 2001Current Economic Scenario of PakistanCorporate GovernancePre-Budget SeminarPost-Budget SeminarPreparation and Presentation of Financial Statements

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Concerns in IT CommunicationQuality in Internal AuditSales Tax ReviewSelf-Grooming and Personality DevelopmentMaking Successful Business PresentationsHow to Seek EmploymentTechnology and the New World of Business Communication

LahorePre-Budget SeminarPost-Budget SeminarDraft Income Tax Ordinance 2001Enterprise Resource Planning (ERP) FinancialsKnowledge ManagementValue Chain ManagementInternational Accounting StandardsAccounting and AccountabilityImpact of IT on Economic and Social ScenariosEmerging Macro and Micro Economic ScenariosOpen Forum.

IslamabadPre-Budget SeminarPost-Budget SeminarIncome Tax Ordinance 2001Trade Remedy Laws of WTO.

MultanHuman Resource Management and Development ScenarioKnowledge ManagementStrategic Analysis and Suggestions for PakistanFederal Budget 2002-2003

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2002-2003

KarachiIncome Tax Ordinance, 2001Change ManagementValue-Based ManagementProspects and Problems of Small Investors in PakistanRecent Changes in Income Tax and Sales Tax LawCash Flow and Lease FinancePre-Budget SeminarAnalysis of Financial StatementsIncome Tax LawCareer CounsellingPost- Budget SeminarSAFA International Conference on the Accounting Profession: A Way Forward Code of Corporate GovernanceInformation System Audit - IAS–39Certified E-Business Analyst

LahoreE-AccountingIT Strategy & TrendsValue Chain ManagementPre-Budget SeminarForensic AccountingPost-Budget SeminarComputerization in Office ManagementSales Tax and Central ExciseIncome Tax Ordinance, 2001 and RulesE-AccountingCode of Corporate Governance

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IslamabadICMAP /ICAP and RITBA Joint Seminar on Income Tax Ordinance, 2001Code of Corporate Governance-Role of Board of DirectorsPre-Budget SeminarPost-Budget Seminar

Multan

Heart Diseases and Professionals

2003-2004

KarachiBest Corporate Report Award 2003Discussion on Income Tax, Sales TaxCost AuditShoaib Memorial Lecture on “The Challenge and Management of Change”.Pride of NationCredit RatingsInternational Accounting StandardsTrade with IndiaPre-Budget SeminarFuture Hedging and Commodity Trading.Budget Impact on Trade.Self-Empowerment (two workshops)Personal ExcellenceInformation Systems Audit (Two workshops)English Language

LahoreUtility Companies & Industrial DevelopmentShoaib Memorial Lecture on “The Challenge and Management of Change”.Regional Cooperation and Economic Development.

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Single-Member CompanyPre-Budget SeminarPost-Budget SeminarElectronic EconomyPersonality DevelopmentSystem Integration through I.T.Income Tax – Laws, Rules & Procedures

IslamabadInternal Audit-Current Best PracticeCode of Corporate Governance and Financial Reporting FrameworkSingle-Member Company Rules-2003Emerging Issues in WTOPre-Budget SeminarPakistan Budget 2004-05Communication Skills and Personal EffectivenessMaximizing Your Career Potential

MultanRules for Living a Happy and Prosperous LifeFormation of Single-Member CompanyWTO Emerging Challenges

FaisalabadFinancial ModellingPost-Budget Seminar

2004-2005

KarachiSingle Member Companies Rules, 2003Prospects of Islamic Banking in PakistanInternational Accounting Standards

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Future Prospects of Mutual FundsInternal AuditNational Investment Conference Alternate Dispute ResolutionPre-Budget Conference 2005-06Concept of Debt FinancingSales Tax and Income TaxPost-Budget Seminar

LahoreCorporate Governance Analysis of Financial StatementIncome Tax Laws & ProcedureWater Pollution & its RemediesCareer Counseling SeminarTextile Industry “Hurdles & Solution through Cost Management”Internal AuditingOpen ForumPre Budget SeminarEmerging Trends in Information TechnologyManagerial / Leadership SkillsIslamic BankingInterest Free EconomyUnderstanding Federal Budget

IslamabadProject ManagementSelf-EmpowermentWorld Trade OrganizationInterpersonal Skills and Conflict ResolutionInterest Free BankingPre-Budget Seminar

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Stress ManagementFinancial Modeling in ExcelPost Budget SeminarProject Management

MultanCode of Corporate GovernanceFederal Budget – Expectations & Suggestions

FaisalabadCorporate GovernancePre-Budget Seminar

2005-2006

KarachiMango Mela & Cultural Show-2005National Privatisation ConferenceMutual Funds – An investment opportunity for General PublicE-Filling of Tax ReturnsPre-Budget SeminarStress ManagementRisk ManagementLeadershipPost-Budget Seminar

LahoreCurrent Issues in Sales TaxRole of Accountants as Business PartnersPersonality Development & Communication SkillsLeadership SkillsPeachtree AccountingInformation & Communication Technology

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Pre-Budget SeminarPost-Budget Seminar

IslamabadFinancial Modelling using ExcelTime ManagementInternational Financial Reporting Standards10th Management Accounting International Conference Capital Market Growth and Reforms Leadership through QualityPre-Budget SeminarRisk Management – IRisk Management – IIPost Budget Seminar

MultanManagement Accountants as Business Strategists Compliance of Statutory Requirements under Companies Ordinance 1984 Post-Budget Seminar

Faisalabad

Pre-Budget Seminar

Themes of the seminars and conferences organized by the Institute encompass the gamut ofcost and management accountants’ profession as well as every other subject having bearingon it. Topics of technical importance considered essential for the members’ CPD obviouslyget the first priority. These range from current trends and developments in the realm ofmanagement accountancy to international accounting standards and from strategic financemanagement to the latest techniques of cost audit. Having said so, it must be hastily addedthat other topics of professional interest are also given a very high priority in the selection ofthemes for such meetings. May it be the annual federal budget or tax laws, may it be thegovernment’s economic policies or the obtaining business environment, may it be industry-specific topics or issues relating to the latest developments in information technology andtheir application – nothing of relevance to the profession escapes the organizer’s attention.

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“Shoaib Memorial Lectures”, delivered by invited eminent foreign speakers, have also been a regular CPD activity for decades now. These lectures are quite popular among members andattract large audience. A more detailed account of these lectures will be given when we cometo the Institute’s international relations in Chapter Eleven.

Another of the Institute’s important undertaking, which can be counted among CPDactivities, is the holding of Management Accountants International Conferences (MAICs).These Conferences, attended by large number of local and foreign professionals and experts,provide the Institute’s members with opportunities to come in contact with and learn fromthe views and experiences of professionals coming from different socio-economicbackgrounds with different ideas and different orientations.

So far, ten MAICs have been organized by the Institute. The first, organized in 1966, was infact the first national conference of industrial accountants. It was inaugurated by FederalFinance Minister, Mr. N. M. Uquaili. The second Conference had “Productivity and CostControl” as its theme. It was held in 1978 and was inaugurated by Prof. Ghafoor Ahmad,Federal Minister for Production. The third MAIC was organized in 1981 on the theme“Management Accounting – Challenges and Prospects”. Lt. Gen Saeed Qadir, FederalMinister for Production and Railways inaugurated it. The fourth MAIC, held in 1984, wasinaugurated by Mr. Ghulam Ishaq Khan who was then Federal Minister for Finance andsubsequently became President of the country. Its theme was “Management Accounting ForOptimal Utilization of Resources”.

The fifth Conference, held in 1987, was inaugurated by Prime Minister Mohammad KhanJunejo. Its theme was “Management Accountancy – Challenges and Prospects in theNineties”. Addressing the Conference, the Prime Minister, whose administration’s mainfocus was on accountability, said that his concept of accountability also covered“accountability in terms of efficiency operation, cost effectiveness and the realization ofprivate, corporate or public goals at minimum cost”. Noting that Management Accountingwas an art of utilizing the available resources to produce the best possible results, Mr. Junejoreminded the members of the profession of their “wider responsibility to the society at large”which, he said, they could discharge only by an unflinching commitment to theirprofessional standards, a strong sense of social responsibility and adherence to ethicalvalues. The following nine papers were presented at the Conference:

(a) Cost Saving and Increase in Productivity – by Mr. Lakshman R. Watawala (Sri Lanka)

(b) Productivity Improvement Techniques – by Prof. Dr. Khawaja Amjad Saeed (Pakistan)

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(c) Evaluation of Social Responsibility Performance – by Prof. A. Manap Saeed (Malaysia)

(d) Productivity Measurement – by Mr. A. R. Thaplawala (Pakistan)

(e) Computerization & Management Accounting – by Mr. Hari Bhakti (India)

(f) Cost Audit – by Mr. M. Adam Patel (Pakistan)

(g) Cost Reduction and Cost Audit – by Mr. A. R. Khan (Pakistan)

(h) Cost Audit and Performance Evaluation – by Prof. M. M. Anand (India)

(i) Performance Evaluation – by Mr. Qaisar P. Mufti (Pakistan)

“Synergetic Dimensions of Management Accounting” was the theme of the sixth MAIC,which was organized in 1991. Mr. I.A.Hanfi, Governor, State Bank of Pakistan, inauguratedthe Conference. Emphasizing that the efficient use of limited resources with least cost andwastage was the key to better economic performance, he urged management accountants toenhance their efficiency to make sure that this challenge was honestly coped with in theirrespective organizations. Papers presented at the Conference were as follows:

(a) “Management Accounting: Research and Development”- by Mr. Jake Claret, FCA,FCMA

(b) “Synergetic Dimension of Cost & Management Accounting with Special Reference toEnergy Sector” - by Mr. M. H. Asif, FCMA

(c) “Management Accounting As a Tool for Resolving Business Liquidity Problems” - by

Mr. Qaisar P. Mufti, FCMA

(d) “How to Make Most Use of Money, Human Resources, Material, Machines andMethods to meet New Challenges of Self-Reliance & Privatization” - by Mr. S. Mehfooz Ali, FCMA

(e) “Role of Management Accounting for Effective Marketing” - by Mr. Abdul RahmanKhan, FCMA

(f) “Privatization: New Strategies in Economic Development with Special Reference toMalaysian Experience” by Mr. Juhari Samidi.

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The seventh Management Accountants International Conference on the theme of“Management Accountants’ Role in Market Economy” was held in 1994. It was inauguratedby Mr. Muhammad Naseer Ahsan, Auditor General of Pakistan. The following ten technicalpapers were presented:

(a) “The Role of Professional Accountants in the Development of Capital Markets” byProf. S. Sundrarajan, FCA of ICA India.

(b) “Impact of Liberalization of Foreign Exchange Regulations in Market-OrientedEconomy: Bangladesh Experience” by Mr. M. Yunus, FCA of ICA Bangladesh.

(c) “The Role of Management Accountant in Improving Productivity” by Mr. BadruddinFakhri, FCMA of ICMA Pakistan.

(d) “Human Resource Development” by Mr. A.A. Mian, FCMA of ICMA Bangladesh.

(e) “Management Accountant in His Advisory Role Capacity in Market-OrientedEconomy” by Mr. C.H. Mendis of ICMA Sri Lanka Division..

(f) “Legal and Regulatory Framework for Privatization in Nepal and Role of theProfessional Accountant” by Mr. T.R. Upadhayah, FCA President of the Association ofChartered Accountants of Nepal.

(g) “Privatization Experience in Pakistan” by Mr. S.M. Husain, FCA of ICA Pakistan.

(h) “Trade with Reference to SAPTA” by Mr. R. Wijhesinha, FCA of ICA Sri Lanka

(i) “Infrastructure Development with Specific Reference to Energy Sector: How Can theManagement Accountant make A Qualitative Contribution in this Area” - by Mr. A.Sattar, FCMA of ICMA Pakistan.

(j) “The Role of Management Accountant in Obtaining A Competitive Edge in a MarketEconomy” by Mr. Javed Iqbal, FCMA of ICMA Pakistan.

The eighth MAIC was devoted to discussing ‘Debt Management in Developing Countries’.Held in 1998, the Conference was inaugurated by Mr. Sartaj Aziz, Federal Minister forFinance and Economic Affairs. The ninth Conference was inaugurated in 2002 by Dr. IshratHusain, Governor, State Bank of Pakistan. Its theme was ‘WTO Regime – Challenges’. Andthe topic of discussion in the latest MAIC, held in 2005, was “The Profession of Management

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Accounting in Changing Global Scenario”. It was inaugurated by Mr. Tariq Azeem, FederalMinister for Overseas Pakistanis.

In addition to such lectures and conferences, the Institute organizes a large number ofexecutive seminars, extension lectures, refresher courses, workshops and seminars andconferences organized jointly with regional and international professional bodies. It alsosends its members to participate in various accounting moots abroad – all as part of thecontinuing campaign to enhance the members knowledge and efficiency to the level of theircounter-parts elsewhere in the world.

Computer Courses:

The epoch-making revolution brought about by Information Technology and theinnumerable vistas opened up by it for, among other things, continuing professionaldevelopment at any time anywhere have also been made full use of by the Institute. Asmentioned earlier in Chapter Five under the sub-heading “Other Initiatives”, computercentres in various cities, fitted with the latest hard and soft wares, offer courses in all theapplication softwares, operating systems, programme languages and variouscommunication and presentational packages now available in the field of I.T. These coursesare not only attended by the Institute’s students and others but also by members. TheInstitute’s Members’ Section helps in the development of courses and training programmes,keeping in view the special requirements of updating the members with the latestdevelopments in the field of I.T.

What about members who had passed out when computer courses were not part of theInstitute’s syllabus? What is the extent of the members’ computer knowledge andexperience? Encouraging answers to such questions were available through personalknowledge but not through scientific studies. Therefore, the Institute conducted a survey inFebruary-May, 1996 to ascertain the members’ level of interest and involvement incomputers and Information Technology. It developed a questionnaire and mailed it to all themembers. A total of 314 responses were received which, though much less than expected,were considered to be fairly representative. The 314 respondents represented 27 per cent ofthe total membership of the Institute for the time being. Out of them, 43% were Fellows and57% Associates. A big surprise the survey sprung was that everyone of the respondents hadsome knowledge and experience of computers and of Information Technology, perhapsbecause these things had by then come very much within the scope of the professionalknowledge required of a qualified management accountant. Some members were evenproviding leadership in software development and in harnessing the latest developments incommunication.

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Some of the findings of the survey were:

(a) Members were giving due consideration to Information Technology in managing andprocessing the required management information. Moreover, their direct involvementin handling computerized Accounting Systems suggested that they did realize theimportance of Information Technology in the present business environment.Management reports, budgets, cash flow forecasts, inventory and credit controlreports, payroll and consolidated planning and financial control reports were beingprocessed on computers.

(b) A few members had acquired additional computer qualifications.

(c) New members were more exposed to computer knowledge than senior members

(d) Members, irrespective of their status i.e., employed, self-employed or retired, wereusing computers in their working.

(e) The software tool most vital to management accountants was the “Spreadsheet”, with52% of respondents citing it as their most-used application.

(f) DOS was the most widely-used ‘Operating System’, followed by Windows’ 95 and‘Networking’.

(g) Among programming languages, BASIC was known to the majority, followed byCOBOL. The respondents also used other database management programmingpackages, such as ‘FoxPro’ and ‘Oracle’.

(h) Respondents also reported assisting in system designing of various computerapplications.

(i) Majority of the respondents reported having experience of ‘Computerized AccountingSystem’ development directly and indirectly. The number of members who weredirectly involved in system development was more than those who had indirectexposure to system development.

(j) Ready-made accounting packages had not proved popular in Pakistan.

(k) One-third of members were using E-mail and Multimedia PC for augmenting theirprofessional outlook.

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The survey showed that members, in general, were familiar with all types of OperatingSystems, Programming Languages and Software Packages available for businessapplications in the country. However, Ready-made Accounting Packages available wererarely used, as these packages were not developed locally, keeping in mind the requirementsof local businesses. Members were directly involved in developing ComputerizedAccounting Systems even though only a fraction of them had additional computerqualifications. Most of the members had acquired computer competence by experience.

The respondents did not offer much significant suggestions with regard to the role theInstitute could play in providing advanced computer know-how to its members and only asmall number showed willingness to seek guidance and training in advanced computerapplication from the Institute. It was quite encouraging to note that so far as the knowledgeand use of computers were concerned, the members were pursuing CPD at their own to asatisfactory degree.

Even so, the survey report suggested that keeping the rapid developments in computer andIT in view, the Institute’s syllabus should be revised more frequently. It was alsorecommended that the Institute should start a programme for its future members to getpractical training in computerized MIS in different organizations and this should be made anintegral part of the Institute’s syllabus.

Consequently, greater emphasis was placed on computer education in subsequent revisionsof the syllabus and another new computer lab was established at the Institute’s headquartersin Karachi in 2000 for providing training to the members. Since then, several computercourses, especially designed for members, have been conducted and the activity stillcontinues.

Journal of the Institute:

Journals published by professional institutes as their official organs all over the world areregarded as a constant source of continuing professional education. They bring to theirmembers important information about new developments in their respective fields in apurposefully tailored form, provide them with a chance to benefit from the views and ideasof professional experts on specific current topics of direct relevance to their professions andoffer them fora having access to the concerned quarters, to express their own thoughts andnarrate their own experiences in writing if they wish to. The journals also serve as welcomecontinuing links between the qualified students and their Alma Maters.

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Realizing the value and usefulness of having a journal of its own, the Institute startedpublishing one as early as 1961. At that time, publication of the Journal, besides its intrinsicworth, was also considered essential as a means to serve Pakistan’s fast growing industries.In those days, industrial development was moving very fast but the alarming aspect was thehigh cost of production and the worrisome percentage of wastage of resources in almost allthe established industries. The situation demanded control and monitoring by costaccountants, but enough qualified and trained cost accountants were not available in thecountry. The Pakistan Institute of Industrial Accountants, though doing its best, was not ableto bridge the gap between the demand and supply of qualified accountants. The pass rate ofits students was very low and the market demand of skilled cost accountants at the nationallevel was too high and growing rapidly. The Institute was periodically bringing out a “CostBulletin” but its scope was too limited to serve the purpose effectively. The situationwarranted that a full-fledged journal be published to create an atmosphere conducive to thegrowth of deep interest in cost and industrial accounting both among the students andindustrialists. A journal, which could be a source of information about cost accountingtechniques and methods for those who were not able to join the Institute or pass itsexamination, was the need of the hour. And the Institute responded to it responsibly bystarting publishing “The Industrial Accountant” in March 1961.

“The Industrial Accountant” was a quarterly publication. Its first few issues were broughtout under the supervision of an editorial board comprising Messrs Shafique Ismail,I.A.Burney and A.M. Ansari. Considering the difficult circumstances in which the journalwas published, it is really remarkable that the board was able to include original articles,extracts from other journals on allied subjects, information about educational andexamination matters and students’ columns. All the issues of the journal were widelyappreciated by the business community and government institutions. Its annualsubscription for non-members was only six rupees.

The name of the journal was changed from “Industrial Accountant” to “ManagementAccountant” in July 1992. Upto December 1996, it continued to appear as a quarterlypublication. From January 1997, it was converted into a bi-monthly and achieved monthlyfrequency from January 2001, in line with other international professional bodies. Thechange was necessitated by the need to make available to members and students more andmore articles and the latest information in an environment of rapidly changing global tradeand commerce.

All affairs relating to ‘Management Accountant’ are supervised and controlled by the Journal and Publications Committee, which has the final say in what goes into print. All the materialselected by the editorial board is reviewed by the Committee and a final decision is taken

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about its inclusion or otherwise. The journal’s has no price tag on it. Even non-members canreceive it free of cost on request. Most of the journal’s income is generated by advertisements, procurement of which is the responsibility of the Institute’s Journal and PublicationsDepartment.

The present journal contains 60 pages. Among its regular features are a message from theChairman of the Journal and Publications Committee, editorial, Institute’s news andnotifications, Government Notifications, guidelines and exposure drafts issued by IFAC,information relating to CPD programme, resume of activities of National Council andBranch Councils and other useful information. In addition, each issue carries at least four /five articles on current topics of professional interest, gist of legal decisions relating totaxation, companies regulations, etc. Articles published in the journal are contributed byexperts of different disciplines and professions. With a view to further improving theirquality, the Council has recently launched a scheme, whereby the author of the best researcharticle is paid Rs. 10,000 on the recommendation of the Research Committee.

Since ‘Management Accountant’ is the Institute’s official organ and its mirror for thestudents, members and external readers, special care is taken to ensure that its layout anddesign match its professional standing and so do its contents. In 1998, significant changeswere initiated to further improve the editorial contents, introduce new features, raisepresentation levels and make the process of selection of material more stringent. Thejournal’s editorial board constantly strives to enhance its overall quality and to make it asprofessionally relevant and useful as possible. The editorial board always remains mindfulof the journal’s high importance as a tool of imparting continuous professional educationand always makes all possible endeavours to keep the publication’s standard commensuratewith its importance.

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Chapter Nine

Research and Publications

No technical profession can thrive or even exist in current demand for long without beingbacked up by serious research. Research is the lifeline of all technical professions and thesecret of their reliability, relevance to time and positive public perception. Professions whichdo not regularly receive fresh doses of research tend to fall out of tune with advancingdecades and are relegated to unnoticeable corners to repent while time speedily passes by.

The Institute has always demonstrated full realization of the importance of research whilefixing its priorities and drawing up its action plans. As far back as 1969, when only threeyears had elapsed after the Institute’s constitution as a statutory body, a non-standingcommittee was set up to exclusively handle research activities. The Committee continues toexist and work in top gear todate. Members of the Committee, who are nominated by theCouncil, include members of the Institute’s Council, Institute’s members and people fromoutside the Institute. Subject specialists and academicians are also invited to attend theCommittee’s meetings.

Research Department:

To complement the Research Committee’s work, streamline the Institute’s research activitiesand increase the frequency and scope of research studies, a full-fledged ResearchDepartment was established in 1989, with the following terms of reference:

To identify potential areas of research and make strategic plans for pursuing researchprojects.

To promote and encourage a congenial research environment for members andstudents.

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To draft Cost Accounting Records Orders for major industries and take steps forupgrading existing rules, in the light of experience and feedback.

To update members on current issues of topical interest, particularly for practisingmembers.

To review and recommend revision in Cost Accounting Records Orders to SECP.

To provide help and assistance to members in practice.

To provide information to members on professional issues.

To keep liaison with IASC bodies on professional pronouncements and to offercomments and make recommendations.

To seek enforcement and pronouncements by international and regional bodies.

To keep liaison with Regional Advisory Committees in research matters.

The Research Department carries out its functions on the directives of the ResearchCommittee. The Director of the Department functionally reports to the Committee, whichhas chartered the Department’s course by way of a declaration encompassing the aboveterms of reference. Research studies are normally conducted by the Department withmanpower help from the Institute. Outside researchers are also engaged for specific projects.

Although the Department had been performing its functions more or less satisfactorily andcarrying out Research Committee’s directives to a reasonable extent, but not to theCommittee’s entire satisfaction. The Committee looked into the causes and noted that theDepartment had not been provided with adequate physical facilities and sufficientmanpower to run efficiently. There was multiplicity of command; trained research staff withthe required level of education was not available; there were no facilities for harmonious anduseful rapport with various agencies and organizations; there was no budget for research–related visits and tours and no funds for providing logistical support to research projects.The Committee, therefore, prepared a detailed plan for the reorganization of theDepartment, which was subsequently considered and approved by the National Council in2003.

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Chapter Nine: Research and Publications

The Research Department is headed by a Director, who is assisted by a Deputy Director withone Research Assistant. The Department now has separate budget, additionalaccommodation and the required logistics. More importantly, the reorganization exercisealso led to the drawing up of a rationalization plan, wherein the Department’s priority workareas have been specifically identified and defined. Salient points of the reorganization plan,according to which the Department now functions, are reproduced below:

Industrial Surveys

Information has to be collected by making industrial surveys to know the techniquesbeing practised by various industries insofar as Cost and Management Accounting isconcerned and to know the role ICMAP Members can play to improve the industry’seffectiveness as regards cost control.

Awareness and attitude of industrialists and Cost and Management Accountantstowards cost control and improved management practices have to be assessed.

Comparative studies of Cost Accounting practices in different countries may behelpful.

Awareness of ICMAP Members regarding the latest developments in the Cost &Management Accounting discipline to be ascertained.

Liaison Activities

Developing and keeping proper liaison with Government agencies like, SECP, CBRand SBP.

Keeping in touch with the latest research carried out by various InternationalInstitutions in the discipline of Cost and Management Accounting.

Updating Activities

Updating the Department’s files with the latest amendments and developments madein the practice of Cost and Management Accounting by various International Bodies.

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Keeping in touch with the current improvements made in costing methods in differentsectors of economy, and as adopted by International Cost and ManagementAccounting Institutions, such as CIMA.

Ascertaining various forms used and procedures followed by different industries forcosting purposes.

Cost Audit Rules

To frame Cost Audit Rules and Regulations for different manufacturing industrieswith the assistance of the management of companies and Management Accountants.

To frame Cost Audit Rules and Regulations for service-rendering organizations.

To make evaluation about the role of Cost Accounting in the business environment ofPakistan.

Members’ Data Bank

A data bank of practising members should be developed and maintained for the use ofdifferent industries having different specializations.

Department Publications

To publish reports and articles on various Cost and Management Accounting practicesused in different sectors.

To publish industry profiles of those organizations which come within the purview ofCost Audit.

To publish booklets for ready reference on various research areas, such as costingsystems for small and medium-size enterprises.

To find out the usage of Cost Accounting for retailers and service sector industries, anddevelop simple format and procedure with specimen form to carry out basic levelcosting.”

Reorganization has put new life and vigour into the Research Department and made it veryactive in pursuing the Institute’s research agenda. It now designs and develops viable

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functional research plans and carries them out under the Research Committee’s guidance,implements the Committee’s decisions, liaises with government agencies and concernedorganizations in trade, industry and commerce, remains in touch with professional bodiesabroad doing research work, brings out its own research publications, obtains publications of other institutions relevant to Cost and Management Accounting and maintains data bank ofmembers, professional bodies and government agencies.

Since the nature of accounting research varies from country to country and from oneprofessional body to another, the Institute cannot be expected to follow set patterns. Thefinancial resources of the Institute, the degree of sophistication of the national profession atthe given time and the measure of exigency, all contribute to the type and extent of researchundertaken. Methodology adopted – either scientific method of inquiry or the consultativeapproach or the survey technique – also differs in different cases, depending upon the natureof the area under inquiry, purpose of the research study and its end use.

In deciding about its research undertakings, the Institute is normally guided by the need todevelop sound public accounting practices as well by its responsibility to propagate soundconcepts of cost accounting principles, which at times are re-evaluated in the light ofchanging conditions. Some of the Institute’s studies have been the result of specific memberinterest while others were initiated because of outside influences, such as governmentregulations, inflation, taxation, client’s special concerns and international assignments, all ofwhich go into deciding what research projects to undertake and when. The Institute’sresponsibility to keep its qualified members informed of the current accepted principles andtrends in the re-assessment of such principles also plays a role.

Research Studies:

Since its inception, the Research Department has carried out and pursued several studieswhich have been published and distributed. Some of these are described below with a viewto conveying some idea of their nature and scope, so as to appreciate the efforts that musthave gone into their completion.

(i) Cost & Management Accounting Techniques Employed in Cotton Textile (Ring)Spinning Industry of Pakistan:

A study was undertaken in 1996 to ascertain the level of accounting techniques beingemployed in Cotton Textile (Ring) Spinning Industry of Pakistan. Information was obtained

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through survey from 46 industrial establishments representing main spinning units andsister-concerns. The information was categorized, analyzed and a report prepared andpublished.

Units surveyed throughout Pakistan were classified as ‘small’, ‘medium’ and ‘large’according to their installed capacity. It was an encouraging finding that 80% of unitsestablished in 1980 employed Management Accountants and had Cost Departments. Thereport indicated that 98% units kept quality- wise record of cotton received and issued forproduction and around 89% of the units weighed raw cotton both at the ginning factory andat the mills gate. Mixing was done by 74% of the units for producing different counts of yarn.Inventory record was maintained on Perpetual Inventory System and scientific methodswere employed for valuation of inventories.

Machine performance evaluation and production ratios in each process were also studiedand it was revealed that majority of the units gave due importance to this activity. Labourcost records were also analyzed and it was found that the majority of the units kept record oflabour cost, either hired on regular or contract basis, in production and ancillary units, 46%units kept their records on the basis of which wages were paid i.e. hourly rate or daily rate.Incentives to workers for better quality and higher output were given by 65% and 75% ofresponding units, respectively.

Majority of the units had integrated cost and financial accounting systems. Process costsystem was used by these units. 72% units treated normal maintenance and replacement cost as revenue expenditure and renovation expenses were treated as deferredrevenue/expenditure and charged off over a period of time. Overhead was allocated on thebasis of floor areas occupied or at composite rate.

(ii) Sugar Industry in Pakistan – Problems and Potentials:

This research study was undertaken in 2000 to pinpoint the core problems faced by the sugarindustry, leading to shortage of sugar in the country and the possible solutions to surmountthese problems. The study provided detailed review and analysis of all the areas of sugarprocessing industry, such as sugarcane cultivation, cane crushing, sugar production, sucroserecovery from sugar production, by-products of sugar (molasses, biogases and pressed-cake) and sugar trading (exports in case of surplus production and imports in case of productionshortage).

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The study suggested to the Government to take up cost studies at the sugarcane growingstage, for the purpose of fixing support price for the growers. It further suggested that coststudies of production of refined sugar, both in terms of variable cost and fixed cost ofproduction in each sugar mill, should be undertaken to control the retail prices. The studyrevealed that Cost Audit Rules and compulsory maintenance of cost accounting records forsugar industry, in line with the cost accounting models in other countries, could prove to beof great help in this direction.

The study also revealed that one major reason for shortfall in sugar production is gurmanufacturing, in view of its soaring demand in the country due to the influx of Afghanrefugees. So much so that during the year 1999-2000, the Pakistan Government had to suffer a substantial loss of over one billion rupees towards sales tax revenue due to non-productionof white spoon sugar.

The study recommended to the Government to take initiatives for minimizing the use of gur,so that a substantial quantity of cane becomes available for crushing and making white spoon sugar. The study further suggested that molasses should be converted into alcohol andexported to earn foreign exchange or it should be blended with gasoline to produce gasohol,which may reduce oil import bill to some extent.

The study received due consideration by the Government and, on the initiative andconsistent efforts of the Institute, the Securities and Exchange Commission of Pakistan(SECP) promulgated the Sugar Industry (Cost Accounting Records) Order, 2001.

The implementation of the Cost Accounting Records Rules has greatly benefited the sugarindustry in terms of curtailment of cost, reduction of wastage and better utilization of the raw material. It has also helped in identifying uneconomic production lines to optimize theoverall profitability of sugar mills.

(iii) Comparative Study of SAARC and South Asian Countries on General Sales Tax orValue-Added Tax (VAT):

In 2000, the Institute and the Federation of Pakistan Chambers of Commerce and Industry(FPCCI) jointly undertook a study to make a comparative analysis of the nature andapplicable rates of General Sales Tax (GST) or Value-Added Tax (VAT) in SAARC and SouthAsian countries. In addition to Pakistan, the study covered Bangladesh, Nepal, Sri Lanka,India, Malaysia, Indonesia, Philippines, Thailand, Mauritius, Singapore and Brunei.

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What was revealed in the study in summary was that, due to complicated procedures in taxlaws, the traders and businessmen always find it difficult to pay their due taxes andcontribute their share in Government revenues. The taxpayers are never sure of properutilization of tax collected due to rampant corruption and poor governance. The studysuggested that regressivity of GST system could only be justifiably encountered if therevenue generated from this form of taxation is made expenditure– specific. If revenue isneeded to be spent only on social sectors like education, health, sanitation, infrastructuredevelopment, and poverty alleviation programmes, only then can its anti-poor bias beeffectively eliminated and it can become generally acceptable.

Sales tax regime, which is in force in some developing and poor countries as well as in somedeveloped countries, is working with complete success and enjoys taxpayer’s confidence inthese countries. Pakistan’s tax to GDP ratio is just 10.4% against an average of around 20%for other developing countries.

General sales tax in Pakistan, as imposed under the conditionalties of IMF, is howeverstrongly resisted by the traders. There are apprehensions in the mind of the businesscommunity that once placed in sales tax net, income tax returns will come under strictscrutiny, giving leverage to the assessing officers to put the tax assessees at a disadvantage.The Government needs taxes and the taxpayers are willing to pay. The dispute, however,remains on the modalities, which, if worked out with professional approach instead ofbureaucratic style, would yield positive results acceptable to both parties. A comparativestudy of some of the SAARC and South Asian countries shows that the levy of retail tax inPakistan has always been unnecessarily made a controversial issue.

GST or VAT, which is considered a main source of revenue generation, had been introducedsuccessfully in a number of developing countries without any resistance or hesitation.Efforts have been made to implement VAT-type tax on the European model in Pakistan,which may not be successful due to peculiar and distinguishable socio-economic conditions,such as widespread illiteracy, lack of monetization and poor accounting practices andinconsistent tax policies. The common people in Pakistan cannot afford to absorb the burdenof mark-up by middlemen or artificial value-addition through multi-stage VAT-type salestax. In Europe and other developed countries, the situation is quite different as consumersthere are well protected against any sort of artificial mark-up in determination of prices. InPakistan, no such safeguard exists. The Western model of multi-stage VAT cannot be applied in Pakistan for this particular reason alone.

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For the last few years, complexities have arisen in the imposition of value-added tax (VAT)and the Government, in the name of documentation of economy, has further extended itsscope, bringing every business activity in the tax net. General awareness needs to be raisedthrough vast publicity campaigns to create feelings in the minds of people that unless anduntil national interest, both in letter and spirit, comes first and treated on top priority,Pakistan would not be able to achieve development which depends on sound financialdefence.

The study pleaded that Sales Tax Laws should be simple, short, unambiguous and easilycomprehensible with no hair splitting. They should be free of intricate provisions that maybaffle the minds of the taxpayers and also the tax advisors and are prone to abuse andmisinterpretation, thereby leading to unnecessary disputes. The study also suggested that, as a confidence building measure, the Government should put in place a system of one windowtax collection with simplification of tax laws to resolve the problem.

(iv) Input Costs and Corporate Tax Structure – An Analysis of Trends in SAARC Region:

In 2001, ICMAP and FPCCI jointly carried out a study to ascertain regional trends in inputcosts of industrial production and tax structure for some selected industries in Pakistan andother SAARC countries.

The study pointed out that WTO’s objective to liberalize tariff on foreign goods posed aserious threat to local economies, as the free arrival of products from the developed countries after the liberalization of trade under WTO regime would cripple their industries. The studyfurther pointed out that the SAARC countries were facing barriers in marketing access to thedeveloped countries. It was a matter of concern for the developing countries as to how would the course of globalization affect their economics. Even in the developed countries, it wasbeing regarded in some quarters as highly exploitative.

Pakistan, a nation blessed with abundant, efficient, skilled and hard working labour force,vast natural resources and having a strong agricultural base, could develop fast if it managesits affairs in a planned and systematic manner. Equitable and balanced allocation of land forthe production of various cash and minor crops, keeping in mind the local demand, wouldyield long term economic benefits for the nation. Similarly, the exploitation and development of natural resources, such as coal, oil and gas particularly in Sindh and Baluchistan, couldturn around the entire economy of the country.

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The study covered four major industrial sectors – cement, sugar, vegetable ghee/ cooking oiland chemical fertilizers. Discussing the cement industry, it noted that taxation was the majorlimiting factor in the economic revival of cement industry in Pakistan. Estimated demandwas 9.9 million tones against the installed capacity of 19.50 million tonnes. The country couldcapture at least 20% (about 4 million tonnes) of regional export market, which would give itthe much-needed foreign exchange of about US $ 180 million to $ 200 million per year.

So far as the sugar industry is concerned, it was suggested in the study that a balanced policyfor cultivation of the four major cash crops should be chalked out and incentive be providedto the growers for cultivation of sugarcane on 1.50 million hectares to become self-sufficient.

Analyzing the input costs in vegetable ghee / cooking oil industry, the study reached theconclusion that raw and packing materials constituted the bulk (above 95%) of theproduction cost per tonne in Pakistan and Bangladesh. It was much cheaper in Bangladeshmainly due to freight, for Chittagong is nearer than Karachi from the Indonesian andMalaysian ports.

Production cost of fertilizer in Pakistan was worked out to be more or less the same as inIndia. However, selling price of Urea in Pakistan was 30% higher than in India. Thisindicated that Pakistan fertilizer companies were not giving adequate advantage of costbenefits to the farmers (users), consequently making agriculture input costs and agriculturalproducts more expensive than in India.

Discussing the corporate tax structure, the study noted that in Pakistan majority of incometaxes were collected through the withholding tax regime. It was felt that this regime shouldbe further strengthened for improvement of tax collection. The study advocated furthersimplification of procedures but cautioned that it would produce the desired results only ifthe traditional contact of taxation officers with the taxpayers was eliminated. The study alsoconsidered the required distribution of 40% profit to be an obstruction in capital formation.

Corporate tariff rates for public and private companies in five SAARC countries were alsostudied and it was indicated that in Assessment Year 1999-2000, corporate tariff rates forpublic companies were the lowest in Pakistan – 33% as against 35% in India, Nepal andBangladesh and 40% in Sri Lanka. However, for private companies, the tariff rates were thelowest in Nepal – 35%. In Sri Lanka they were 50%. In India 48%, in Pakistan 43% and inBangladesh 40%.

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The appeal mechanism in Pakistan was found to be too lengthy and complicated, ascompared to India and Nepal. Some measures were suggested in the study which, ifimplemented, could help the ailing sectors, thereby paving the way for the country’seconomic turnabout.

(v) Role of Small & Medium Enterprises in GDP and Macro-Economic Development ofPakistan:

The Institute studied the role of Small and Medium Enterprises (SMEs) in GDP and macro-economic development in 2001 and produced a report which underscored their importance,highlighted their potential, surveyed their existing position and made recommendations fortheir proper growth. Being an important study, its summary is reproduced below in full:

“Small and Medium enterprises make a significant contribution in employment generationand output of a country’s economy. Developing as well as developed countries have spentlarge amounts of money for the promotion of SMEs. There are quantitative as well qualitative definitions of SMEs. Some of the quantitative and qualitative measures are: number ofemployees, assets employed and sales turnover. Some ‘technical’ measures are also used,such as installed horsepower or kilowatts, the number of vehicles, hotel rooms, looms orother machinery, or the output capacity of a machinery. Agricultural farms are by far themost numerous small businesses in most developing countries. Various types of businessesthat SMEs are involved in are carpet industry, poultry-farming, seri-culture, rice-husking,gur and sugar-making, bee- keeping, small repair workshops, hand and power loomindustries, manufacturing of sports and leather goods, embroidery and tailoring work,making of silver and gold ornaments, furniture-making, ivory works, handicrafts, carpet-weaving, spices industry, wood works etc

“There are three focal points in which SMEs are different from large-scale enterprises. Theseare uncertainty, innovation and evolution. The SME sector itself can be disaggregated intomicro enterprises, small enterprises and medium enterprises. SMEs are the starting point ofdevelopment in countries desiring industrialization. Most large enterprises today have theirorigins in small and medium enterprises. SMEs lack the research capacity, the ability to takesubstantial risks, or any other advantage of expansion. SMEs have their effect on the GDP,income distribution, tax revenue, employment, efficient utilization of resources and stabilityof family income.

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“SMEs provide more jobs than LEs. Entrepreneurs prove their ideas in the market places inthe form of their products. Small enterprises provide a valuable opportunity for earningincome and personal development to women, especially in rural areas. SMEs can be easilymanaged and do not require highly formalized management structures. SMEs are fundedusually by owners through their personal savings unlike large enterprises which borrowloans. SMEs can serve as by-product industries of the big industrial units. The variousproductions of SMEs have international markets and may earn foreign exchange for theireconomies.

“SMEs can be easily developed in the backward areas. SMEs provide the necessary semi-finished raw materials for large-scale enterprises. Two factors are crucial in determining thesuccess or failure of an SME. In the long run, the basic underlying soundness of the businessis important for the success of SME. An SME may also be affected by the quality and aims ofthe entrepreneurs, the quality and cost of labour, the cost of investment funds and access tocredit, the availability of markets and raw materials and other non-labour inputs, access toinformation about product market conditions, market intermediaries and productiontechniques. The growth of a small business can be divided into five stages. These are:inception, survival, growth, expansion and maturity. Factors which influence the growth ofan SME can be categorized as starting resources of the entrepreneur, the enterprise andstrategy.

“The key role played by an entrepreneur is in organizing the work of others. SME established by a group of individuals is more likely to grow than businesses owned by a single person. Atechnologically strong SME system and network in developing countries is necessary todevelop, attract and work with large enterprises.

“In developed countries, large-scale enterprises are increasingly downsizing and dependingon networks of SMEs. Technological performance of SMEs can be regarded as theperformance of synergistic networks of enterprises. Achievement of technologicalperformance in SMEs depends on technologically skilled managers and workers, technology embodying capital and intermediate goods, technological services, technology innovationand transfer and mastering in gainful technology.

“Many entrepreneurs are prevented from starting a business only because of lack of financeinitially. It is very important that whatever capital is available should be used effectively andefficiently. The vast majority of initial venture capital and subsequent funds for expansion isprovided from entrepreneur himself, his business and his family, suppliers, customers and

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moneylenders or investors, who provide capital in innumerable ingenious ways, oftenlinked to supply, machinery, employment or customers.

“Owner-manager in small and medium enterprises do not seek growth as a major objectiveand prefer maintaining control through involving personally into the day-to-day operationsand decision-making processes of the enterprise. Cash flow management is used primarily to assist owners or entrepreneurs in their survival rather than some other goals, such as growth. Survival and stability are often more important goals.

“Performance measures employed by large enterprises are often completely inadequate tosmall and medium enterprises. Similarly, the system of accounts adopted by SMEs forcontrol purposes are often influenced by the relationship between the owner and thebusiness. Banks, individual potential investors, investment companies, leasing companies,entrepreneur himself, family members, friends and relatives, suppliers - these are allpotential sources of capital for a newly started SME.

“A large part of our economy, which is based on SMEs, remains outside the white tax-neteconomy. Efforts are necessary both to boost this sector for employment, GDP growth andalso to organize its financial behaviour. SMEs are vital for world prosperity; collectively, they are the largest employers and greatest creators of wealth.

“Small industry can be set up with small capital and produce goods for domesticconsumption by using labour intensive technology. It has been reported that SMEs arecapable of helping create most of the one billion new jobs the world will need in the newcentury. In developed countries, SMEs have constituted a significant portion of GrossNational Product (GNP) and total employment. SMEs account for between 55% and 80% oftotal employment in Western Europe, USA and Japan. Their contribution in output in Japanis 65 %, Germany 48 % and USA 45 %.

“In Pakistan, SMEs provide employment to 65% of the work force in industrial sector. Theycontribute to GDP around four times as much as the large-scale industries. According to theEconomic Survey of 1998 – 99, SMEs with a mere 20% investment and recourse to less than10% of the total formal credit, generated 80% of the country’s total employment. Varioustypes of loans available are: Small Loans for Business and Industry, Small Loans forIndustrialists, lending for Small and Medium Industries. These loans are provided as per thefollowing two categories:

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1st Category : Loans ranging from Rs. 10,000 to Rs. 500,000

2nd Category : Loans ranging from Rs. 500,000 to Rs. 5,000,000

Each of the above mentioned categories has certain terms and conditions attached for thesanctioning of the loan.

“To develop the small and medium enterprises (SMEs) in Pakistan, an autonomouscorporate body at the Federal level, called Small and Medium Enterprises DevelopmentAuthority (SMEDA) was formed in October, 1998.

“SMEDA may play its role for evolving strategies for introduction of transport and otherschemes to all the four provinces. SMEDA can contribute in a big way to the socio-economicdevelopment of the country.

“The Government of Bangladesh had taken up different financial assistance programmes,with a view to extending finance to small industries at relatively favourable terms andconditions. The Special Credit Programme (SCP) was initiated by the Bangladesh Bank in1978 to disburse local currency loans for capital finance and working capital finance to smalland cottage industries. Cottage industries in Bangladesh are exempt from levy of ValueAdded Tax (VAT).

“Small and medium enterprises have played a very important role in the economicdevelopment of China. At present, there are more than 10 million of SMEs registered in theBureau of Industrial and Commercial Administration, comprising 99% of the total number of enterprises in China. SMEs contributed 60% of industrial output volume and 40% of the totaltaxes and profits realized by enterprises in China.

“If strategic planning for development of SMEs is made successful, middle classentrepreneurs may play an effective role in the economic recovery of Pakistan. In Pakistan,adult literacy rate is 48%. Majority of entrepreneurs, operating small businesses andIndustry, are not educated and as such hesitate to approach Small and Medium EnterprisesDevelopment Authority and the banks for loans. High interest rate is the main hurdle facingSMEs. Credit may be offered to such enterprises at subsidized rates.

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“The Punjab Small Industries Corporation (PSIC) should also be restructured. Thecorporation claims to have financed 3,600 industrial projects and successfully recovered itsstuck-up loans of over Rs. 2.4 billion.

“In the past, SBP had been allocating funds for small loans but commercial banks makingsincere efforts to make the disbursement against the mandatory quotas allocated to themfound shortage in meeting the requirements of SMEs. A small business and cottageindustries bank can be established, whose main objective should be to boost the development of the existing SMEs and help in developing new small and medium enterprises. The bankmay be established with an authorized and paid-up capital of Rs.1 billion, sponsored byIDBP, FPCCI, leasing companies, investment banks, Modaraba companies, variousassociations of exporters, NIT, insurance companies and the general public.

“The State Bank of Pakistan should make a policy decision for lowering the interest rate to10% only for SMEs. SBP, being the controlling authority of all the commercial banks, shouldmonitor credit financing to SMEs at large-scale. It is needless to mention that unless and until SMEs are promoted, the dream of economic revival may not come true.

“All commercial banks should re-shape their credit policies, try to approach small and verysmall borrowers and launch to sell their new products. The banks include National Bank ofPakistan, Habib Bank Limited, United Bank Limited, Muslim Commercial Bank Limited andAllied Bank of Pakistan Limited and others.

“Ultimately, the success of an SME–centred approach to industrialization will depend uponthe Government’s willingness to formulate an industrial policy that draws upon some of thesuccessful models”.

(vi) Cost Audit Handbook:

When the Companies (Audit of Cost Accounts) Rules, 1998 were issued, a need was felt toprovide guidelines to the Institute’s members for conducting cost audit in accordance withthese rules. Therefore, a detailed handbook was prepared and published in 2001. It wasoriginally compiled by Mr. Mahmood Ashraf, a senior Fellow Member of the Institute.

Companies engaged in production activities are legally required under various provisions of Companies Ordinance and rules/orders issued under the same to maintain records relatingto utilization of material, labour and other inputs. The Handbook provides guidance as to

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how to carry out an examination of these records and verify that the cost of a given producthas, in fact, been arrived at in accordance with the accepted principles .The book containshighly useful information and tips for conducting cost audit, and preparing and submittingreports. It tries to answer all the possible hows and whys, inform the cost auditors of theirpowers and duties and guides them in exercising and performing the same. It is a highlyuseful book and has been widely appreciated by cost auditors.

(vii) Status of Research in SAFA Member Bodies 2005:

Recognizing the importance of research as one of the core elements for the development ofany profession, South Asian Federation of Accountants (SAFA) had commissioned a study to find out the status of research in its member bodies. The Institute of Cost and ManagementAccountants of Pakistan was assigned this task in the SAFA Assembly held in January 2004.The Institute studied the status of research in India, Pakistan, Bangladesh, Sri Lanka andNepal and prepared a report, which was published in 2005.

According to the study, in India the Institute of Chartered Accountants has been atorchbearer in the area of research. Its Standards Board, Research Committee and Auditingand Assurance Standards Board and other Committees have issued a large number ofpublications, most of which are research-based, in different spheres of the profession. Agood number of research studies are in hand.

The Institute of Cost and Works Accountants of India has also carried out extensive research,mainly in industrial sector. It has immensely contributed in the development of accountingliterature by framing Cost Accounting Records and Cost Audit Rules for 47 industries inIndia. It has also issued a number of research publications in other areas. A number ofresearch projects are in process.

In Pakistan, the Institute of Chartered Accountants of Pakistan (ICAP) has set up differentcommittees to carry out research. It has undertaken and accomplished several researchprojects. The Institute has also identified several areas to undertake research for future.

Institute of Cost and Management Accountants of Pakistan (ICMAP) has set up a ResearchDepartment, which has undertaken and completed a number of research studies inprofessional areas. ICMAP has also developed Cost Accounting Records Rules for variousindustries. The Institute has also identified several research projects for future.

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Research work in the Institute of Chartered Accountants of Bangladesh is in its initial phase.A number of research projects are under way, mainly directed towards setting of Standardson Accounting (BSA) and on Auditing (BAS).

The Institute of Cost and Management Accountants of Bangladesh has carried out researchwork and has developed Cost Accounting Records Rules for few industries. It has also issued research-based publications. A number of research projects, which are in hand, are indifferent stages of completion.

In Sri Lanka, the Institute of Chartered Accountants of Sri Lanka (ICASL), has set up aTechnical Division, which has developed Sri Lanka Auditing Standards. It also has launcheda new faculty on Professional Reporting. The Technical Division is also developing statement of recommended practice for insurance contracts.

The Institute of Chartered Accountants of Nepal (ICAN) does not have an independentresearch department. It has, however, issued few publications on Nepal Accounting andAuditing Standards. The Accounting & Auditing Standards Boards of the Institute havebeen assigned to develop further Accounting and Auditing Standards for Nepal.

Cost Accounting Records Rules (CARRs) and Companies (Audit of Cost Accounts Rules), 1998:

The Companies Ordinance, 1984 provides that proper books of accounts in the case ofcompanies engaged in production, processing, manufacturing or mining activities shouldinclude particulars relating to utilization of material, labour or other inputs or items of cost,as may be prescribed by the Commissioner by a general or special order. The law furtherprovides that, where a company is so required, the Federal Government may direct that anaudit of cost accounts by the company shall be conducted in such a manner and with suchstipulations as may be specified in the order by an auditor who is a Chartered Accountant ora Cost and Management Accountant and such auditor shall have the same powers, dutiesand liabilities as an auditor of a company and such other powers and duties and liabilities asmay be prescribed.

Keeping in view the legal provisions, the Institute has prepared Cost Accounting RecordsRules (CARRs) for the benefit of its members and in an attempt to standardize keeping of cost accounting records, in respect of each financial year by all companies engaged in production,processing or manufacturing of different industrial products. Twelve CARRs were prepared

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by the Institute’s Research Department and forwarded to the Securities & ExchangeCommission of Pakistan. Three of these have already been enforced by the Commissionthrough the following Special Orders:

1. Cost Accounting Records Order - Vegetable Ghee & Cooking Oil Companies – notifiedvide Gazette notification dated 1st November 1990 and came into force on 1st January 1991;

2. Cost Accounting Records Order - Cement Industry - notified vide Gazette notificationdated 14th May 1994 and came into force on 1st July 1994;

3. Cost Accounting Records Order - Sugar Industry – notified vide Gazette notificationdated 13th February 2001 and came into force on 13th February 2001.

The Commission also issued the Companies (Audit of Cost Accounts) Rules, 1998 vide SRO846(I)/98 dated 24th July 1998 requiring the above three industries to get their cost accountsaudited by the Cost Auditors, who may be Cost and Management Accountants or CharteredAccountants. The Rules also require that the Cost Auditor should prepare his report, in aspecified format, within 60 days of appointment, and submit the same to the Directors, withcopies endorsed to the SECP and the Registrar concerned.

The Securities and Exchange Commission of Pakistan, vide gazette notification dated 26thSeptember 2008, has issued the Companies Cost Accounting Records (General Order) 2008.This Order obligates the companies engaged in the following five industries to maintain costaccounting records and to get the same audited each year:

(1) Fertilizer

(2) Thermal Energy

(3) Petroleum Refining

(4) Natural Gas

(5) Polyester Fiber

However, the Cost Accounting Record Orders specific to these industries have not beenissued by the Securities and Exchange Commission of Pakistan. The Research Department ofthe Institute has taken up the task of preparing guidelines for these industries in an attemptto standardize the cost accounting records and practices.

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Pending Issue of the Cost Accounting Record Orders:

Drafts of ten CARRs, listed below, developed by the Institute, are still under considerationwith the Securities and Exchange Commission:

1. Cost Accounting Record Order - Pharmaceutical Industry (2000).2. Cost Accounting Record Order - Chemical Fertilizer Industry (2000).3. Cost Accounting Record Order - Cotton Textile Industry (2000)4. Cost Accounting Record Order - Thermal Power Generating Cos. (2001)5. Cost Accounting Record Order - Engineering Industry (2002)6. Cost Accounting Record Order - Motor Vehicle Industry (2002)7. Cost Accounting Record Order - Synthetic & Rayon Industry (2002) 8. Cost Accounting Record Order - Electric Cables & Conductors Industry (2003)9. Cost Accounting Record Order - Cycle Industry (2003)10. Cost Accounting Record Order - Steel Tubes and Pipes Industry (2003)

The Research Department is currently engaged in research work for development of costaccounting record orders for the following industries:

1. Chemical and Dyes Industry 2. Automobile Battery Industry3. Caustic Soda Industry4. Paper Industry5. Refrigerator Industry6. Soda Ash Industry7. Tractor Industry8. Tyres and Tubes Industry9. Gas Industry10. Room Air Conditioner Industry11. Aluminium Industry12. Commercial Banks13. Petroleum Industry14. Telecommunications Industry15. Electric Fan Industry16. Electric Lamp Industry17. Electric Motor Industry

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Why does the Institute devote so much time and energy to develop CARRs? This questioncan be more than satisfactorily answered, if one casts a glance at the long list of advantages ofcost records, which are as follows:

The records help in WTO litigation in respect of “dumping duty” etc

They are helpful in providing the cost of materials, labour and overheads and indetermining cost of the products.

They are helpful in computing the quantities and values of receipts, issues and balances of material directly used in production.

They serve as an aid to management in cost control through regulation of production,choosing economical methods of operation, helping to reduce working cost bypointing out wastes etc.

Efficient management of materials, labour and overhead and optimal utilization ofinstalled capacities to increase productivity is facilitated with Cost Accounts Records.

Their efficient maintenance aids the management to bring about improvements ineconomical and financial conditions of the company.

They help the management to aim at locating uneconomic products, providing cluesfor diverting their resources into productive and remunerative channels.

They create cost consciousness in respect of utilization of national, financial and human resources in public and private sectors of economy.

The cost of finished products can be calculated and determined on the basis of cost dataprovided in the cost records. A comparison of present cost with the previous periodcost leads to useful conclusions for decision-making in relation to cost of finishedproducts

On the basis of stocks/stores records, the movement through receipts / issues/balances can be checked and excessive / short/slow moving/obsolete stock balancecan be determined. The records are, therefore, helpful to management in planning,operating and controlling stocks.

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Valuation of stocks is of utmost importance in determining the profit of the unit. Theover or under- valuation affects government exchequer in the form of recovery of taxes. It also affects the company’s image with respect to Earnings per Share and return toshareholders by way of dividends etc.

Cost records can help apply overheads in a rational manner to different cost centers, inaccordance with the accepted principles of cost accounting, quantification of servicesrendered to cost centres or on the basis of activities which are cost drivers.

The cost records provide important data that can be used for evaluating the productionprocess, and ascertainment of profitability for decision and otherwise.

With proper costing system in place, valuation of inventories can be done correctly interms of quantity and values of work-in-process and finished goods inventories.

The records are helpful in advising the management on important issues, such ascapacity utilization, inventory policies, identification and exploitation of key factorsand production bottlenecks.

Standard costs of various items of materials, labour and overheads can be set with thehelp of cost records and the same standard costs can be used to compare with the actual costs for computing variances and finding out their reasons for further investigationand cost control purposes.

These records are helpful in identifying uneconomic product line to optimize theoverall profitability.

The cost records are ultimately beneficial to the end-user consumers throughrationalization of the costing mechanisms. As a matter of fact, the cost audit aims atincreasing the added value through increased profitability per unit of input orresources. Part of the benefit may reasonably be expected to be passed down to the end-user consumers by way of reduced prices.

The standardization of the cost accounting records helps facilitate the intra-industrycomparison. The cost of one company can help another company to compare its owncost data for taking important decision for curtailing cost or making some otherimprovements. But inter-industry comparison is possible only when the application ofcost accounting record rules becomes common to all companies and their cost data ismade accessible through published accounts.

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The records are helpful in highlighting inefficiencies in production through varianceanalysis of various cost centers.

With an integrated cost accounting and financial system, the weaknesses observed as aresult of reconciliation of financial and cost accounting data can be pointed out andcorrective action taken for strengthening the company’s internal control system.

The records are helpful in pointing out general imbalance in the production facilities.

It was in view of the above benefits that the concept of cost audit was introduced in Pakistan,though belatedly. The concept has more than proved its effectiveness and usefulness inneighbouring India, where it was adopted in 1965 and gradually extended to industry afterindustry. Presently, as many as 47 Indian industries are subject to cost audit, whereas inPakistan cost audit is being introduced half-heartedly for reasons best known to SECP. Theresult is that in export market, India enjoys over Pakistan an edge of lower costs. With thecoming up of WTO and SAFTA, it has become imperative that Pakistani companies shouldnot only be quality conscious but should simultaneously be cost-competitive. And for that tocome about, cost audit is, among other things, a pre-requisite. But unless its application isextended to all the major segments of industry, its positive impact and practical utility willnot be felt in any appreciable manner. This is the reason why extension of cost audit to otherindustries is one of the measures being recommended strongly and persistently by theInstitute to the SECP. In addition, the following recommendations have also been forwardedfor SECP’s consideration:

Cost audit should be allocated to Cost Accountants only, so that the profession of costaudit gains sound footing and cost auditors are able to achieve professional excellenceand specialization in specific industries. This would really make cost audit an effectivetool for the management, Government and other stakeholders.

The timings of cost audit and financial audit may be scheduled in such a way that themanagement does not feel extraordinary pressure of two audits at one time. This affects the quality of both the audits and puts the management under severe stress. Cost auditshould get underway after the accounts have been audited by statutory auditors,because at this stage the closing and adjusting entries are finalized.

The data contained in cost audit reports should be made use of in reviewing the dutystructure for imported items.

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The numerous tangible and intangible advantages apart, the cement and sugar industrieshave also additionally benefitted from cost audit in concrete terms in many ways. It wasbecause of cost audit that energy conservation steps were initiated in cement industry. Costaudit also convinced the industry to switch over from furnace-firing system to coal-firing,which has substantially reduced fuel costs and brought down manufacturing cost by about15%. Again, it was cost audit that pointed out the burstage rate of paper bags, which used tobe over one per cent, and suggested that the matter be taken up with the manufacturers.Consequently, paper bags quality was improved and their burstage ratio reduced by morethan half. Furthermore, when the cement industry implemented cost audit’srecommendations regarding obsolete and slow-moving items of stores and spares, itimproved the industry’s cash flows by curtailing the blockade of funds. The cement industryalso substantially benefited from the comparison made by cost auditors of actual productionof each unit with its rated capacity, budget and previous year’s position, which led toinvestigation of reasons for variance for corrective action. Cost audit reports were alsoinstrumental in the installation of captive power generation units, which produce power atmuch cheaper costs than that purchased from WAPDA/KESC. Cost audit reports have alsobeen pointing out transmission losses of electricity in cement industry and severalcompanies have taken remedial measures, reducing the cost of power supply. It can beinferred that improvement of profitability in cement industry has been the result of cost audit to some extent.

The sugar industry has also benefitted from cost audit reports. Yield comparisons havehelped the industry reduce pilferage, wastage and process problems and in improvingvaluation of raw materials, work-in- process, finished goods and stores and spares. On thesuggestion of cost auditors, some sugar factories have installed their own refineries to further process molasses and are now producing alcohol. Some other units have startedmanufacturing chipboards. This resulted in better and more profitable utilization ofmolasses and bagasse, which were previously sold at nominal prices. All these facts only goto prove that cost audit reports provide opportunities to the management to look into the cost breakdown, cost efficiency, variance analysis, yield and mix ratios etc. which help them inrevising their policies and practices and in undertaking corrective measures, whereverrequired.

All the research studies conducted by the Institute, whose brief outlines have been discussedin the foregoing paragraphs, have been printed and distributed.

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Publications:

Research studies represent only one category of the Institute’s publications and that tooarriving much late on the scene. The first research study on cost and management techniquesemployed in Pakistan’s cotton textile spinning industry was published in 1996, whereas thefirst thing ever to be published by the Institute was its Memorandum and Articles ofAssociation in 1951. For a number of years after that, no publication was brought out except afew newsletters and cost bulletins. The idea and desire were there, but no resources either inmen or material and no time as all the efforts were concentrated on consolidating the infantInstitute and streamlining its education and examination activities. However, when the FirstPakistan Convention of Accountants was held in 1959, the Institute felt that its proceedingsneeded to be published. Two publications – the convention’s proceedings and the paper onCompany Law in Pakistan presented in the convention – were consequently brought out inbooklet form.

Nineteen hundred and sixty one was the year in which the Institute started publishing itsown journal “The Industrial Accountant” later re-christened as “The ManagementAccountant”. Details about the journal have already been discussed at length in the EighthChapter of the book. While the launching of the journal was a much needed and highlycommendable initiative, it did stifle the growth and expansion of the Institute’s publicationactivities. Most of the material worth printing found readily available space in the journal’spages and not much was left to be published independently. Publication activity, therefore,remained confined mostly to important papers presented in conferences and seminars and to talks given at lecture meetings.

As has already been discussed, the Institute has been organizing seminars, conferences andlecture meetings in large numbers. Their proceedings were regularly published to keep themembers, government departments, international accounting bodies and the press informed of professional developments. These publications were essentially based on papers read atsuch meetings.

The trend changed when series of educational publications were started and when researchstudies began to be undertaken. Attention was also paid to bringing out legal publications. In addition, various publications of miscellaneous nature have been brought out over the years.The Institute’s significant publications, other than the journal, are listed at Table-X, category-wise.

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Chapter Ten

Professional Ethics

The Oxford Dictionary defines the word ‘ethics’ as ‘moral principles’ and ‘rules of conduct’.The word ‘code’ is defined as ‘prevalent morality of a society or class’ and as ‘a person’sstandard of moral behaviour’. When used in conjunction with the word “professional”, thethree-word phrase thus formed is used to refer to a set of moral principles, standards andrules, agreed upon by the members of a particular profession, to be followed by each of themin his professional conduct and in his behaviour towards other members of his professionalbody, clients, users of his services and the general public. On the standard of his professionalbehaviour and his adherence to the code of ethics of his profession depends the respect hecommands in the society and the brightness of his public image. Therefore, many of theprofessions having formally grouped into specific societies or associations or bodies, haveframed codes of ethics for their respective organizations to be classified as professionalbodies.

But the job of a professional organization does not finish with the mere development of acode of ethics. A much tougher part of the job is the enforcement of the code, which, in mostprofessions, has been difficult and imperfect at best. But even success in placing in place anappropriate disciplinary procedure and in securing general acceptance of the code’sinterpretation can go a long way in creating public image of professional honesty andintegrity. It can work as a comforting assurance to the public to know that there exists somesystem to take the erring and dishonest to task – some system of accountability.

Legal Provisions:

In addition to the notional importance of a professional code of ethics, there are legalprovisions and obligations in Pakistan which require the Institute to define professional do’sand don’t’s for its members. The Cost and Management Accountants Act and theRegulations framed thereunder, have empowered the Council to regulate the profession.

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They have also given it the authority to regulate the conduct of the members and maintaindiscipline. The Council has been further empowered to conduct enquiries into theprofessional misconduct of the Institute’s members. The Act also provides for penalties forcertain offences by other persons and companies in relation to the Institute and theprofession as well as for their prosecution.

The Institute’s Regulations have clearly and specifically listed acts of omission andcommission, which constitute professional and other misconduct on the part of a member.These have been specified in Schedule A of the Regulations which, though quitecomprehensive, do not limit or abridge in any way the Council’s power to inquire into theconduct of a member in any other circumstances. Schedule A of the Regulations isreproduced below:

SCHEDULE ‘A’(See Regulation 126)

“A member of the Institute shall be guilty of professional and other misconduct if he:—-

(1) places his professional service at the disposal of or enters into partnership with anunqualified person or persons in a position to obtain business of the nature in whichCost and Management Accountants engage by means which are not open to a memberof the Institute;

(2) allows any person to practise in his name as a Cost and Management Accountant inpractice, unless such person is also a Cost and Management Accountant and is inpartnership with, or employed by him.

(3) pays or allows or agrees to pay or allow directly or indirectly a share, commission, orbrokerage in the fees or profits of his professional business to any person, other than amember of the Institute, or a partner or a retired partner, or the legal representative, orwidow of a deceased partner;

(4) accepts or agrees to accept any part of the profits of the professional work of a lawyer,income-tax practitioner, auctioneer, broker or other agent or any other person otherthan a member of the Institute;

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Chapter Ten: Professional Ethics

(5) accepts a position as a Cost and Management Accountant in practice previously heldby some other member without first communicating with him in writing;

(6) accepts an appointment as a Cost and Management Accountant with a concern without first ascertaining from it whether the legal requirements, if any, have been dulycomplied with;

(7) accepts a position as a Cost and Management Accountant in practice previously heldby some other member in such conditions as constitute under-cutting;

(8) publishes or sanctions the publication of expressions of thanks or appreciation byclients, or promotes in any way laudatory notices with regard to professional matters;

(9) solicits clients or professional work either directly or indirectly by circular,advertisement, personal communication or interview or by any other means partakingof the nature of advertisement;

(10) advertises his professional attainments of services, or uses any designation orexpressions other than Cost and Management Accountant on professional documents,visiting cards, letter-heads or sign boards, unless it be a degree of a universityestablished by law in Pakistan or recognized by the Federal Government, or a titleindicating membership of the Institute of Cost and Management Accountants, or anyother institution that has been recognized by the Federal Government or may berecognized by the Council.

(11) allows his name to be inserted in any directory, either in the main section or in classified list, whether printed or not, so as to appear in leaded type or in any manner, whichcould be regarded as of an advertising character;

(12) certifies or submits in his name or in the name of his firm a report of an examination ofcost accounting and related statements, unless the examination of such statements hasbeen made by him, or by a partner or any employee in his firm, or by another Cost andManagement Accountant in practice;

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(13) permits his name or the name of his firm to be used in connection with an estimate ofcost or earnings contingent upon future transactions in a manner which may lead to the belief that he vouches for the accuracy of the forecast;

(14) charges or offers to charge, accepts or offers to accept in respect of any professionalemployment fees which are based on a percentage of profits which are contingent upon the findings or results of such employment;

(15) engages in any business or occupation other than the profession of Cost andManagement Accountants, unless permitted by the Council so to engage;

Provided that nothing contained herein shall disentitle a Cost and ManagementAccountant from being a director of a company, unless he or any of his partners isinterested in such company as a Cost and Management Accountant in practice;

(16) allows a person, not being a member of the Institute, or a member not being his partnerto sign on his behalf or on behalf of his firm, any report of cost or pricing statement orany other document required by his client;

(17) discloses information acquired in the course of his professional engagement to anyperson other than his client without the consent of his client or otherwise than asrequired by any law for the time being in force;

(18) expresses his opinion on cost or pricing statements of any business or any enterprise inwhich he, his firm or a partner in his firm has a substantial interest, unless he disclosesthe interest also in his report;

(19) fails to disclose a material fact known to him which is not disclosed in a cost or pricingstatement but disclosure of which is necessary to make such statement not misleading;

(20) fails to report a material mis-statement known to him to appear in a financial statementwith which he is concerned in professional capacity; or fails to invite attention to anymaterial departure from the generally accepted procedure of costing and pricingapplicable to the circumstances;

(21) is grossly negligent in the conduct of his professional duties;

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(22) fails to obtain sufficient information to warrant the expression of an opinion or hisqualifications are sufficiently material to negate the expression of an opinion;

(23) fails to keep funds of his client in a separate banking account, or to use such funds forthe purposes they are intended;

(24) has been guilty of any act or default discreditable to a member of the Institute;

(25) contravenes any of the provisions of the Act or the Regulations made thereunder;

(26) is guilty of such other act or omission as may be specified by the Council in this behalfby notification in the Gazette of Pakistan.

(27) not being a fellow, styles himself as a fellow;

(28) does not supply the information called for by, or does not comply with the directionsof, the Council or any of its committees;

(29) includes in any statement, return or form to be submitted to the Council, anyparticulars knowing them to be false;

(30) does not pay any money he is ordered to pay by the Tribunal, appointed under Section10;

(31) adopts one or more of the practices specified in Regulation 49.”

IFAC Code of Ethics:

The above listed provisions, relating to the professional conduct of ICMAP’s members, havehad until recently been serving the purpose of a code of ethics for them. However, as amember of the International Federation of Accountants, the Institute is committed to theIFAC’s broad objectives of developing and enhancing a coordinated worldwide accountancy profession with harmonized standards. In working towards this objective, IFAC developsguidelines on ethics for professional accountants in the belief that issuing such guidelineswill improve the degree of uniformity of professional ethics throughout the world. IFAC hadissued a Code of Ethics for professional Accountants in July 1966, which the Institute was to

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adopt as the basis for approved ethical requirements, after necessary adaptations to suitPakistan’s own legal, social, economic and political environments. It, therefore, developed adraft Code in 2001 and submitted the same to the Council for approval in August 2002.

The Council referred the draft to the Institute’s Ethics Committee for further deliberation,which had become necessary, because of the receipt in July, 2003, of an Exposure Draft fromIFAC proposing a revised Code. The draft code prepared by the Institute was discussed inthe Ethics Committee in September 2003 in the light of the proposed revision of the IFACCode. Then in November, 2003, the International Federation circulated another revision to its Code. Currently, the IFAC Code is reported to be in the process of third revision.

Underlying IFAC’s repeated revisions of its Code of Ethics for professional accountants hasbeen the increasingly felt need to fortify the profession’s ethical values and strengthen theaccounting and auditing standards, in order to regain public trust and confidence in theaccountancy profession badly shaken by the high profile corporate collapses in the UnitedStates and some hyped financial scandals in other countries in the first three years of the newmillennium. This need, among other considerations, prompted the US Congress to enact thenow famous Sarbanes-Oxley Act in 2002, which requires, inter alia, accounting firms in theUnited States to be registered with the Public Company Accounting Oversight Board(PCAOB) for the purpose of monitoring their compliance with laws and standards. In theUnited Kingdom and European Union too, legislative measures were being considered forenactment.

SAFA Code:

While law makers, regulators and many professional bodies of accountants were showingrenewed interest in better regulation of the profession, the South Asian Federation ofAccountants also woke up to its responsibility to develop a code of ethics for members of itsmember bodies, primarily on the basis of IFAC’s Code of Ethics and Exposure Drafts. SinceSouth Asia as a region has different ground realities and its own peculiar professional, legal,social and economic framework, it was considered necessary to frame a slightly different setof rules of conduct for its professional accountants.

Before developing a code of ethics for them, SAFA had to review their existing codes as wellas study the corporate legal requirements in member countries. After such a review andstudy, a report was prepared containing the “Code of Ethics for Professional Accountants in

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SAFA Countries”. The report was adopted by SAFA at its 53rd Assembly held in Jaipur, Indiain March 2004.

Meanwhile, ICMAP’s Ethics Committee met many times to discuss IFAC’s proposed reviseddraft code, with a view to ascertaining how far did it cater to local requirements. It was notedthat the IFAC’s proposed code placed greater emphasis on the subject of independence ofprofessional accountants in public practice. The Code, which would apply to all accountantsin diverse fields, provided a separate section as applicable to professional accountants inpublic practice and another separate section for professional accountants in business.

At its meeting on 13th February, 2004, ICMAP’s Ethics Committee advised that the SAFACode, prepared keeping in view the local requirements of South Asian Accountants, be taken as base document and be compared with the codes of SMA Canada, ICWAI India and CIMAUK. The good features of these codes be incorporated in the SAFA Code and then the finaldraft be recommended to the Council for adoption by the Institute as ICMAP Code of Ethics.

Action was taken as per the decisions of the Committee. All the material relating toprofessional ethics was searched out in the library of the Institute. Moreover, the concerneddepartments of ICAP Pakistan, ICWAI India and CMA Canada were contacted to provide acopy of their respective codes. In response, it was informed by the ICAP, ICWAI and CMAthat they did not have proper codes of ethics. Then a comparison of the Code of SAFA wasmade with that of CIMA, UK and a detailed report was put up in the Quality Assurance andEthics Committee meeting held on 27th February, 2005. It was pointed out that the ICMAPhad played an important role in framing the SAFA Code of Ethics, which might be adoptedsubject to the ground realities of Pakistan. The IFAC Code of Ethics was also discussed and itwas noted that it related more to statutory audit rather than cost audit. Hence, the SAFACode was preferred over it.

As has been explained in SAFA’s report “the Code of Ethics for Professional Accountants inSAFA countries has been prepared on the basis of the “Code of Ethics for ProfessionalAccountants”, revised up to November 2001; Exposure Draft “Proposed Revised Code ofEthics for the Professional Accountants”, July 2003; and “Proposed Revision to Code ofEthics for Professional Ethics”, November 2003; issued by the International Federation ofAccountants (IFAC); and a Survey of Code of Ethics of SAFA Member Bodies conducted inDecember 2003; amongst others.

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“The Code establishes the fundamental principles of professional ethics for professionalaccountants in SAFA countries and provides a conceptual framework for applying thoseprinciples. Unless a limitation is specifically stated, the fundamental principles are equallyvalid for all professional accountants.

“The SAFA Ethics and Independence Committee, in line with the IFAC Ethics Committee,believes that the establishment of a conceptual framework that requires professionalaccountants to identify, evaluate and address threats to compliance with the fundamentalprinciples, rather than merely comply with a set of specific rules (presently set out by therespective SAFA Member Bodies) which may be arbitrary; is in the public interest. The Coderepresents a conceptual change and member bodies will need to consider the trainingrequirements that may be required for successful implementation.

“The Code establishes a regional model, thereby recommending that no SAFA member bodyor firm applies less stringent standards than those stated in the Code unless prohibited bylaw or regulation. This marked a departure for the Code in two respects- firstly, the adoptionof the principles-based approach and, secondly, the degree of authority given to the Code.Although it was made clear that the basic intent of the Code should always be respected, theCode in itself was not required to be regarded as a standard.

“The Code establishes the fundamental principles of ethics for professional accountants inSAFA countries and provides a conceptual framework to assist professional accountants toidentify, evaluate and respond to threats to compliance with those principles. If identifiedthreats are other than clearly insignificant, professional accountants are required, whereappropriate, to apply safeguards to eliminate the threats or reduce them to an acceptablelevel, such that compliance with the fundamental principles is not compromised”.

ICMAP’s Ethics Committee’s recommendations were considered by the Institute’s NationalCouncil in a meeting held on 16th July 2005. After thorough discussions and on having beensatisfied with the suitability for Pakistan of the “Code of Ethics for Professional Accountantsin SAFA Countries” adopted by the South Asian Federation of Accountants in its 53rd

Assembly in March, 2004, the ICMAP Council decided to adopt the same as the Code ofEthics for its members.

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Salient Features:

The SAFA Code is divided into three parts. Part A applies to all professional accountants,Part B to professional accountants in public practice and Part C to those in business.

In Part A, the Code sets out the professional accountants’ ethical responsibility to act in thepublic interest, which has been defined as the collective well-being of the community ofpeople and institutions the professional accountant serves, including clients, lenders,governments, employers, employees, investors, the business and financial community andothers who rely on the work of professional accountants. The Code establishes thefundamental principles of professional ethics and provides a conceptual framework forapplying those principles. The fundamental principles established in the Code are: integrity,objectivity, professional competence and due care, confidentiality and professionalbehaviour.

The Code recognizes that compliance with these fundamental principles may potentially bethreatened by a broad range of circumstances. Many of the threats may occur as a result ofself-interest or self-review or advocacy or familiarity or intimidation or a combination of anytwo or more of these causes. All of these causes have been explained in the Code andillustrated with examples. More importantly, the Code discusses safeguards that mayeliminate or reduce such threats to an acceptable level. These safeguards are (a) created bythe profession, legislation or regulation and (b) may exist in the work environment.

The Code also speaks of the problems in resolving an ethical conflict that the professionalaccountants may encounter in applying the standards of ethical conduct. Advocating thatwhen faced with significant ethical issues, they should follow the established policies of theirfirm, employing organization or professional body to try and resolve the conflict, the Codedoes identify factors which should be taken into consideration in the process of conflictresolution. It also provides guidance as to the course of action to be taken in case a matterremains unresolved after exhausting all relevant possibilities.

Part B of the Code discusses ethical standard for the conduct of professional accountants inpublic practice, over and above the guidance set out in Part A. This part of the Code focuseson behaviour in public practice - in marketing of services, in client acceptance, in individualservice on an engagement, in the use of experts, in the acceptance of gifts and hospitality, andin impersonation. The part then goes on to discuss conflicts of interests and safeguards

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against them. Discussed next are changes in professional appointment, second opinions, feesand other types of remuneration, custody of clients assets, and threats to independence andsafeguards against them.

Part C of the Code, which applies to professional accountants in business, begins with adescription of conflicts, which may arise when the responsibilities of professionalaccountants to an employing organization come in conflict with their professional obligationto comply with the fundamental principles. It goes on to discuss preparation and reporting of information, the obligation to act with sufficient expertise, the threats likely to be posed byfinancial interests to compliance with the fundamental principles, inducements offered toprofessional accountants or their family members, and matters relating to the disclosure ofconfidential information.

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Chapter Eleven

In Global Fraternity

If the world has become a global village – as it certainly has – how can the Institute,responsible for the development, promotion and projection of a profession having world-wide application, influenced heavily by global professional developments and followinginternational standards, remain isolated from its foreign counterparts and their internationaland regional organizations? Since its inception, it has been the Institute’s keen desire andsincere endeavour to partake of professional developments abroad and participate ininternational events of professional nature. Participation in such events not only providesopportunities to the Institute’s representatives to gain first hand knowledge of the latestdevelopments, but also helps in promoting mutual appreciation and understanding, inestablishing useful contacts and in getting international exposure and recognition.

Coming Out of Shell:

But the constant accrual of these advantages was a late development. The first attempt atestablishing international relations was made in July, 1956, when a letter was addressed toexplore the possibility of securing membership of the international Accounting Congress.But in those days the Institute was too pre-occupied with its consolidation process to pursuethe matter seriously. Obviously, the priorities then were first to find feet, to gain enoughstrength to stand up, to learn to walk confidently and only then to consider the question ofreaching out beyond Pakistan’s frontiers.

Whatever little attempts were made in the early years to establish international links weregrossly hampered by utter lack of funds. An episode has already been narrated in ChapterTwo of the book, to show how paucity of funds compelled the Institute to abandon the idea of sending its own independent delegate to the seventh session of the International AccountingCongress held in Amsterdam, Holland in September, 1957 and left it with no choice but torequest the leader of Pakistan Council of Accountants’ delegation to additionally representthe Institute also. For five years even after that, the Institute’s international relationsremained restricted to hosting sporadic foreign visitors, mostly Canadian experts comingunder the Colombo Plan assistance programme.

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According to the available record, the Institute’s first formal activity in the field ofinternational relations was the participation of an official delegation, representing PIIA andthe Institute of Chartered Accountants of Pakistan in the Eighth Congress of Accountantsheld in New York in September, 1962. Mr. Mumtaz Mirza, the then President of the Institute,headed the delegation. On his way back, he also visited the headquarters and severalbranches of the Society of Industrial and Cost Accountants of Canada. From Canada, heproceeded to Japan to take part, as an official delegate of the Institute, in the ThirdConference of Asian and Pacific Accountants held in October, 1962 in Tokyo. He presented apaper on “Functions of Pubic Accountants’ Association” Mr. Rahim A. Jan, another delegateof the Institute, also submitted a paper on “Operation and Organisation of an Accountant’sOffice”.

This first official participation in an international conference was followed by many more inthe years to come, paving the way for the Institute’s fuller introduction in internationalaccounting circles and bringing back knowledge of current developments and trends to theInstitute’s great enrichment.

But the real fostering of international relations began only when the Institute secured formalmembership of major international professional bodies. The first was, of course, theinternational Accounting Standards Committee (IASC) of which ICMAP became a memberin 1973, followed by the International Federation of Accountants (IFAC) in 1974. In 1980, theInstitute gained membership of the Confederation of Asian and Pacific Accountants (CAPA), and in 1984, of the South Asian Federation of Accountants (SAFA). In addition, the Institutehas created and nourished cordial cooperative relations bilaterally with a number ofcounterpart institutes in other countries.

It is not merely because of membership of important professional bodies but mainly due tothe active role played by the Institute in these fora and the valuable contribution it has beenmaking to their activities, projects and deliberations that the Institute has built a good imagefor itself in the global fraternity of accountants and earned regard and respect in international accounting circles.

As the Institute’s involvement with international bodies grew, the need was felt to put inplace a mechanism to deal with the numerous matters arising out of it. Therefore, anInternational Affairs Committee was constituted by the Institute’s Council in 1981. TheCommittee’s main responsibility is to maintain liaison with the international bodies and lookafter arrangements relating to all activities flowing from the membership of these bodies.Another important function assigned to the International Affairs Committee is to ensureprompt responses to the exposure drafts and statements circulated by IFAC. To this we willrevert later in the chapter.

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Chapter Eleven: In Global Fraternity

Since membership of the professional bodies named above is very important for the Instituteand entails far-reaching implications and obligations for Pakistan’s cost and managementprofessionals, it appears in the fitness of things to look at them in more detail.

International Accounting Standards Board (IASB):

The International Accounting Standards Board (IASB) was formed for formulating andharmonizing international standards and protecting the interest of investors, creditors,employees and the general public. The IASB came into being on June 29, 1973, as a result of an agreement by accountancy bodies in Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom and Ireland, and the United States of America. A revisedAgreement and Constitution was signed in November, 1992.

The objectives of IASB as set out in its constitution are:

to formulate and publish in the public interest accounting standards to be observed inthe presentation of financial statements and to promote their worldwide acceptanceand observance; and

to work generally for the improvement and harmonization of regulations, accountingstandards and procedures relating to the presentation of financial statements.

IASB members, who consist of all professional accountancy bodies that are members of theIFAC, agree to support the objectives of IASB by undertaking the following obligations:

To ensure that published financial statements comply with International AccountingStandards in all material respects and disclose the fact of such compliance;

To persuade governments and standard-setting bodies that published financialstatements should comply with International Accounting Standards in all materialrespects;

To persuade authorities controlling securities markets and the industrial and businesscommunity that published financial statements should comply with InternationalAccounting Standards in all material respects and disclose the fact of such compliance;

To ensure that the auditors satisfy themselves that the financial statements complywith International Accounting Standards in all material respects; and

To foster acceptance and observance of International Accounting Standardsinternationally.

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The business of IASB is conducted by a Board, consisting of (a) upto thirteen countries asnominated and appointed by the Council of IFAC that shall be represented by Members ofIFAC; and (b) upto four organizations having an interest in financial reporting co-opted bythe Board.

In furtherance of its objectives, IASB issues recommendations on the basic accountingstandards appropriate for each subject. It works to persuade governments, authoritiescontrolling securities market and industrial and business communities that publishedaccounts should comply with these standards. IASB has suggested that these standardsshould be followed while preparing and presenting accounts and financial statements to thepublic in all countries. And if they do not comply with the standards, a statement to thiseffect should be included which should disclose the extent of non-compliance. In countrieswhere standards for audited accounts area already prescribed by local professional bodies orare established by legislation, these should continue to be mandatory for local conditions.The Board, in preparing its recommendations for adoption internationally, takes intoaccount the accounting standards already in use.

The Board has so far issued eight International Financial Reporting Standards (IFRSs) andadopted 41 International Accounting Standards (IASs), including seven which weresuperseded by revised versions. A complete list of these IFRSs and IASs appears at Table XI.

International Federation of Accountants (IFAC):

The International Federation of Accountants is a collective organization essentially ofnational accountancy organizations throughout the world. It works through the IFACAssembly, which comprises one representative from each member accountancy body. ACouncil is elected by the Assembly which meets every 2 1/2 years. The Assembly decidesconstitutional questions and the Council, through its Executive Committee, which meetstwice annually, carries out IFAC’s policies and appoints and oversees the work of special task forces and the key committees.

Special task forces are also appointed to address significant issues. Overall direction andadministration is provided by the IFAC Secretariat headquartered in New York.

Objectives and Purposes:

The broad objective of IFAC is the development and enhancement of a coordinatedworldwide accountancy profession with harmonized standards.

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In furtherance of this objective, IFAC -

Initiates, coordinates and guides efforts that have, as their goal, the achievement ofinternational technical, ethical and educational guidelines for the accountancyprofession, and works towards this purpose by establishing appropriate committeesand through cooperative efforts with regional organizations being associations ofaccountancy bodies, recognized by the Council in accordance with its Constitution.

Encourages and promotes the work of IASC.

Encourages and promotes the development of regional organizations with commonobjectives.

Arranges the holding of World Congress of Accountants so as to:

o enable members of the accountancy profession to meet one another in anenvironment that facilitates discussion and the interchange of ideas concerningaccounting and related matter;

o direct attention to and inform accountants of development in selected fields ofaccounting thought and practice; and

o reach broad conclusions on desired common aims.

Membership :There are three classes of membership: -

Full Membership: This category of membership is open to national accountancyorganizations that are recognized legally or by general consensus. Typically, theseorganizations are professional standard-setting and self-regulatory bodies, that haverigorous qualification programmes and offer a professional designation which enablestheir members to practise their profession without limitation in their respectivejurisdictions.

Associate Membership: This classification of membership is available to nationalorganizations whose members work in a support role to the accountancy professionand to accountancy bodies that do not meet the full membership criteria (e.g., newlyformed organizations).

Affiliate Membership: This classification of membership is open to internationalorganizations that typically represent a particular area of interest or another group ofprofessionals that interface frequently with the accountancy profession.

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Applications for membership generally require the support of an existing IFAC memberbody and are approved by the IFAC Council upon recommendation of the MembershipCommittee. As on date, IFAC has 144 member organizations from 103 countries representing more than 2.1 million accountants.

The obligations of member bodies include:

Subscription to the objectives of the IFAC,

Agree to support the work of IFAC by making such financial contributions on January1 each year, as may be determined in accordance with the Constitution, and

Support the work of IFAC by bringing to the notice of their members every guidelinedeveloped by IFAC and by using their best endeavours:

To work towards implementation, when and to the extent possible under localcircumstances, of those guidelines,

Specifically to incorporate in their national auditing standards the principles on whichare based International Auditing Guidelines developed by IFAC, and

Support the work of IASB by bringing to the notice of their members everyInternational Accounting Standards approved for issue by the Board.

Until recently, the Federation had seven Committees to deal with different key areas. Theirnumber has now been increased to ten with the formation of four new Committees to address new areas of concern and the winding up of the Information Technology Committee whichused to facilitate global exchange of information on technology and work to increaseaccountants’ IT competency. Names of the six old Committees have also been changed. Fourof them have been converted into Boards, one into a Panel and the remaining one retained asa Committee, though under a new nomenclature. These Boards and Committees are brieflydescribed below: -

Compliance Advisory Panel:

The Compliance Advisory Panel (formerly the Membership Committee) oversees theimplementation and operation of the IFAC Member Body Compliance Program. The CAP isalso responsible for making recommendations to the IFAC Board about the membershipapplication process, including recommending new applicants for membership.

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International Accounting Education Standards Board:

The International Accounting Education Standards Board (formerly the EducationCommittee) develops guidance, conducts research, and facilitates the exchange ofinformation to ensure that accountants are adequately trained to meet their responsibilitiesto the public and their employers and to contribute to the worldwide harmonization of theprofession. An important committee focus is assisting developing nations in theadvancement of accounting education.

International Ethics Standards Board for Accountants:

The International Ethics Standards Board for Accountants (formerly the Ethics Committee)develops guidance on professional ethics and promotes its understanding and acceptance by member bodies. Significantly, the committee continually monitors and stimulates debate ona wide range of ethical issues to ensure that its guidance is responsive to the expectations andchallenges of individuals, businesses, financial institutions and others relying onaccountants’ work.

International Auditing and Assurance Standards Board:

The IAASB (formerly the International Auditing Practices Committee) works to improvethe uniformity of auditing practices and related services throughout the world by issuingpronouncements on a variety of audit and assurance functions and by promoting theiracceptance worldwide.

International Public Sector Accounting Standards Board:

This Board (formerly the Public Sector Committee) focuses on the accounting and financialreporting needs of national, regional and local governments, related governmental agencies,and the constituencies they serve. It addresses these needs by issuing and promotingbenchmark guidance, conducting educational and research programs, and facilitating theexchange of information among accountants and those who work in the public sector or relyon their work.

Professional Accountants in Business Committee:

The PAIB Committee (formerly the Finance and Management Accounting Committee)publishes guidance, sponsors research programs, and facilitates the international exchangeof ideas to develop and support financial and management accounting professionals. It also

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works to build public awareness, understanding and demand for the services of theseprofessionals worldwide.

Developing Nations Committee:

The Developing Nations Committee supports the development of the accountancyprofession in all regions of the world by representing and addressing the interests ofdeveloping nations. This includes seeking resources and development assistance frommember bodies and other organizations on their behalf.

Small and Medium Practices Committee:

The Small and Medium Practices Committee represents the interests of professionalaccountants operating in small- and medium-sized practices and other professionalaccountants who provide services to small- and medium-sized enterprises to internationalstandards setters, IFAC boards and committees, and other international organizations.

Nominating Committee:

The Nominating Committee makes recommendations regarding the composition of IFACboards, committees and task forces. It is guided by the principle of choosing the candidatewith the best qualifications to fill these volunteer roles.

Transnational Auditors Committee:

The Transnational Auditors Committee (TAC) is the executive committee of the Forum ofForms (FoF) and a committee of IFAC. Membership in the FoF is open to all firms performingor wishing to perform transnational audits. Member firms are expected, among other things,to conform to the FoF Quality Standards.

Pakistan has been actively participating in the deliberations and activities of IFAC since itbecame a member of the organization in 1974. The Institute’s representatives have beenparticularly active in IFAC’s Committee on Finance and Management Accounting (Presentlythe Professional Accountants in Business Committee). Mr. Khurshid Ahmed, a pastPresident of the Institute, who had been nominated on this Committee in 1983 as the jointnominee of ICAP and ICMAP, rendered such valuable services as a member of the committee that he was awarded “IFAC Scroll” in 1989 in recognition of his contribution to theaccounting profession worldwide. The award of IFAC Scroll was a singular honour not onlyfor Mr. Khurshid Ahmed individually but also for the Institute as well as the country. He was the first Pakistani to receive such international recognition of service to the profession.

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Confederation of Asian And Pacific Accountants (CAPA):

The mission of CAPA is to provide leadership in the development, enhancement andcoordination of the accountancy profession in the Asia – Pacific region to enable theprofession to provide services of consistently high quality in the public interest.

To achieve this mission, CAPA pursues the following objectives:

Enhance the standards and development of the profession by promotingharmonization through the adoption of IFAC and IASC pronouncements.

Assist with the formation and development of national and intra-regionalorganizations, which serve the interests of accountants in public practice, commerce,industry, public sector and education.

Foster a strong and cohesive profession by providing leadership on emerging issues,coordination with IFAC, other regional, intra-regional organizations, member bodiesand associates to achieve appropriate strategic objectives.

Promote the profession’s role, responsibilities and achievements in advancing theinterests of member bodies and in serving the public interest.

Liaise with international and regional organizations to influence the development ofefficient capital markets and international trade in services.

South Asian Federation of Accountants (SAFA):

The idea of forming a sub-regional body of accountancy institutes of the Indian Sub-continent was mooted at the 3rd National Conference of Chartered Accountants of Sri Lankaheld in December, 1982. As countries in the region have a common heritage and culture, have similarities in trade practices, legal systems and economic conditions, and the problemsfacing them are also similar, it was only natural that it should have occurred to theiraccounting institutes to come together on one platform. The time for the materialization ofthe idea came in 1984, when representatives of the following bodies met in New Delhi, Indiain August and formed the South Asian Federation of Accountants with its headquarters atNew Delhi :

The Institute of Chartered Accountants of Bangladesh (ICAB)The Institute of Cost and Management Accountants of Bangladesh (ICMAB)The Institute of Chartered Accountants of India (ICAI)

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The Institute of Cost and Works Accountants of India (ICWAI)The Institute of Chartered Accountants of Pakistan (ICAP)The Institute of Cost and Management Accountants of Pakistan (ICMAP) The Institute of Chartered Accountants of Sri Lanka (ICASL)

At the governmental level, seven countries of the South Asian region, viz., India, Pakistan,Bangladesh, Sri Lanka, Nepal, Bhutan and Maldives also subsequently decided to form acooperative regional body called the South Asian Association for Regional Cooperation(SAARC). This Association of the countries of the region also adopted making coordinatedefforts to develop accounting in member countries as one of its many objectives.

The Constitution of the newly-formed Federation of Accountants laid down the following asits objectives:

To coordinate and guide efforts to evolve technical, ethical and educational guidelineswithin the region;

To work towards international recognition of qualifications of accountancy bodies ofthe region;

To provide opportunities for consultation, such as the holding of conferences ofaccountants, within the region to enable members of the accountancy profession todiscuss and interchange ideas and to inform themselves of developments in accounting and related matter;

To encourage and assist the development of national accountancy organizations within the region; and

To arrange exchange programmes for students and teachers so as to expand trainingopportunities.

To achieve these objectives of the Federation, four Committees were constituted, namelyEducation Committee, Ethical Committee, Research and Professional DevelopmentCommittee, and Technical Standards Committee.

SAFA’s Governing Council is known as Assembly which has to meet at least once in a year.But the actual frequency of Assembly meetings far exceeds the required number. Upto theend of 2006, the Assembly had held as many as 63 meetings. The first formal meeting of theAssembly was held in Karachi, Pakistan in May, 1985 and the last one in Kathmandu, Nepalin December, 2006.

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SAFA has been a very active organization from the beginning. In addition to 63 Assemblymeetings, it has so far organized about 30 conferences and as many seminars in differentcities of member countries. SAFA conferences are organized on various themes of topicalinterest to accountancy professionals. The first SAFA Conference was held in Karachi inDecember, 1985 on the theme ‘Accountancy Profession : Perspectives and Prospects’ and thelatest in Kathmandu in December, 2006 on “Accounting Profession for Economic Growth”.

Similarly, SAFA seminars are held to highlight and discuss issues of common professionalinterest for members of the profession in the region. Themes of seminars organized so farencompass a very wide variety of topics – ranging from ‘Corporate Reporting’ to ‘PovertyAlleviation’, from ‘Computers in Accounting,’ to ‘Impact of WTO on Accounting,’ from‘Organizing Free Trade in South Asia’ to ‘Regional Cooperation for Economic Development’and all other important subjects in between.

Assembly meetings, conferences and seminars do not represent the whole gamut of SAFA’sactivities. The Federation also launches research projects and commissions studies. These are mostly assigned to member bodies and some to SAFA’s own standing committees. Six ofsuch research studies were assigned to ICMAP, which have been completed and submitted(Table XII). In addition, three more research studies have been assigned to ICMAP, jointlywith other sister Institutes.

Activities of the international professional bodies of which ICMAP is a member, as describedin the foregoing pages, are not the only world fora in which the Institute participates actively. Meetings and other events of other professional organizations also enthuse the Institute’smembers to attend to learn and contribute. International Congresses of Accountants,meetings of Management Accounting bodies, conferences on Accounting Education andother significant seminars and workshops held abroad are attended by the Institute’srepresentatives, with a view to further promoting relations with the international fraternityof accountants and contributing to its strengthening.

Visitors from Abroad:

ICMAP’s international relations are not one-way traffic. In fact, the Institute receives morevisitors from abroad than it sends abroad. And this has been the case from the verybeginning. The earliest foreign visitors to the Institute were of course Canadian experts,coming to assist in the early stages. They were followed by an un-ending series of visitorscoming on different missions: to discuss admission of their students; to select people forappointment in their countries; to discuss professional matters; to brief and get briefed; toobserve and study the Institute’s functioning; to explore possibilities of collaboration; to paygoodwill visit; to deliver lectures in the Shoaib Memorial Lecture Series and for a variety ofother purposes.

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Visitors, frequenting the Institute, have been from countries like Australia, Bangladesh,Canada, India, Malaysia, Nepal, Nigeria, Sri Lanka, Tanzania, Thailand, Uganda, U.K,U.S.A,, Zambia and others. Besides the counterpart national bodies whose representativesregularly visit ICMAP, other foreign visitors to the Institute represent such internationalprofessional organizations as IFAC and IASC and such international Financial Institutions as the World Bank and Asian Development Bank. The Institute has also hosted visitors from theInternational Consortium on Government Financial Management and the Asia Foundation.

Distinguished academics from such educational institutions, as the London Business School,the Universities of Texas, Sydney and Delhi, the California State Polytechnic University andFlorida School of Accounting, have also visited ICMAP. The Institute also receivesrepresentatives of different international companies and multinational corporations. Visitsby SAFA officials is also a regular activity.

It has been an established practice of the Institute to invite eminent personalities from abroadto deliver the Shoaib Memorial Lectures, which were instituted in 1976. The first lecture inthis series was delivered by Prof. Adolf J. H. Enthovan, Director of the InternationalAccounting Centre at the University of Texas, Dallas. He spoke on ‘The Future ofManagement Accounting in Developing Countries.’ Other distinguished speakers invited todeliver lectures in this series include:

Prof. R. J. Chambers of the University of Sydney, a former President of the AustralianSociety of Accountants, who delivered a lecture on ‘Integration of Management andFinancial Accounting.’

Prof. J.M.S. Risk, a past President of the Institute of Cost and Management Accountants of U.K., who spoke on ‘New Accountancy,’

Mr. Gordon H. Cowperthwaite, President of International Federation of Accountants,who delivered a lecture on ‘Internationalization of Accounting Profession.’

Prof. V. V. Ramandham of the London Business School, who spoke on ‘CapitalStructure of Public Enterprises.’

Mr. I. I. Iyeyemi, Auditor General of Nigeria and Chairman of the African AccountingCouncil, who delivered a lecture on ‘African Accounting Council.’

Dr. John O. Miller, President, Confederation of Asian and Pacific Accountants, whodelivered a lecture on ‘Constraints to the Acceptance and Achievement of the Need forAccounting and Accountability.’

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Dr. Mortimer Adolph Dittenhofer, Professor, School of Accountancy of FloridaUniversity, Miami, who spoke on ‘Application of Internal Auditing to ManagerialAccounting.’

Mr. R. G. Wilkes, President, IFAC, who spoke on “Wither Management Accounting.”

Mr. N. P. Hepworth, President, International Consortium on Government FinancialManagement and Director, Chartered Institute of Public Finance and Accountancy,U.K., who delivered a lecture on ‘Performance and Financial Management in PublicSector Institutions.”

Mr. D. R. Yeomans, a former Chairman of the Tariff Board of Canada, who spoke on‘Control, Accountability and Management Accountant.’

Mr. Peter D. Agars, President, IFAC, who delivered a lecture on ‘The Convergence ofManagement Accounting and Information Technology.’

Mr. Ronald J. Points, Director and Financial Management Consultant,Pricewaterhouse, Virginia, U.S.A., who spoke on ‘Accountant in the 21st Century: AChanging Profession for a Changing World.’

Talks by such exalted foreign experts on topics of such high professional relevance attractlarge audience and contribute in no small measure, on the one hand, to the professionaldevelopment of the Institute’s members and, on the other hand, to the addition of intellectual dimensions to its international relations.

Exposure Drafts:

The Institute is also active in formulating and forwarding its views and comments on theExposure Drafts of accounting, audit and education standards circulated by the International Federation of Accountants and the International Accounting Standards Committee, forobtaining comments thereon from member bodies. The Research Committee of the Instituteassigns the task of writing comments to the competent members of the relevant field and theInternational Affairs Committee sees to it that the assignment is completed expeditiously.While formulating comments on the Exposure Drafts, full regard is shown for Pakistan’sown legal requirements and full consideration is given to the country’s objective workingenvironment and the interest of the national profession. All drafts are carefully studied andanalyzed and all possible implications of their contents are meticulously weighed.

The drafted comments are vetted by the Research Committee and forwarded to the issuingbody by the International Affairs Committee. This is as frequent an activity as it is important.

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During the years 2000 to 2002 alone, comments and views were sent by the Institute on asmany as 17 Exposure Drafts, 13 received from IFAC and four from IASC. These were :-

Title of the Exposure Draft Issue date Issuing Body

Strengthening Guidance on Fraud and Error April 2000 IFAC

ED9: Financial Reporting May 2000 IFAC

Code of Ethics for Professional Accountants’ Independence May 2000 IFAC

ED 12: Construction Contracts July 2000 IFAC

ED 13:Financial Reporting Hyperinflationary Economy July 2000 IFAC

ED 15: LEASES July, 2000 IFAC

ED: Impairment of Assets July, 2000 IFAC

E 66: Proposed Limited Revisions to IAS 39 and other Related Standards

July, 2000 IASC

E 67: Pension Plan Assets July, 2000 IASC

ED 68: Income Tax Consequences of Dividends July, 2000 IASC

Accounting for Share-Based Payment July, 2000 IASC

The Audit of International Commercial Banks Oct, 2000 IFAC

ED18: Financial Instruments: Disclosures and Presentations Jan., 2001 IFAC

ED 19: Investment Property Jan., 2001 IFAC

ED: The Relationship between Banking Supervisors andBanks External Auditors

Feb, 2001 IFAC

SIC D33: Consolidation and Equity Method – Potential Voting Rights

Aug., 2001 IASC

SIC D3A: Financial Instruments-Instruments or Rights Redeemable by the Holder

Aug., 2001 IASC

ED 22: Definition of a Segment: Amendment to the DefinitionProposed in ED17: Segment Reporting

Dec., 2001 IFAC

ED: Outsourcing: Proposed International Guideline onInformation Technology.

Dec., 2001 IFAC

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Chapter Twelve

The Secretariat

All professions need proper organizational support to grow properly. The growth of theprofession of Cost and Management Accountants in Pakistan could also not have beenpossible had it not been lucky to be backed up by a strong and efficient organizationalinfrastructure in the shape of the ICMA Secretariat. The Secretariat, located at the Institute’sHead Office in Karachi, has over the years measured up fully to the challenges and problemsposed by the ever-growing number of the Institute’s members and students, workingdiligently and devotedly to practically cover the ever-widening spectrum of services to themand proficiently handling the ever-expanding range of its activities.

As has already been discussed, the Council is the supreme body of the Institute, whichmanages all its affairs, discharges its functions and exercises all powers necessary to carry out the purposes of the Cost and Management Accountants Act. The Chief Executive of theCouncil, the President, is the head of the Institute and discharges his responsibilities with thehelp of the Vice President and the Council’s Secretary. The President remains mostlyconcerned with policy matters and other important issues and normally delegates work ofroutine nature to either the Vice President or Secretary. The management of the Institute isbased on Committee System. Four Standing Committees have been provided in the Act,while a number of Non-Standing Committees have been constituted from time to time by theCouncil, using the power available to it under the Act. All the Standing and Non-StandingCommittees have been described at length in Chapter Four.

Secretariat support to the Council, its office holders and all its Committees is provided by theadministrative machinery of the Institute at the Head Office.

Administrative Set-Up :

While the Council, its office bearers, the Committee and the Branch Councils have their rootsin the 1966 Act, under which the Institute is governed, the administrative set-up of theInstitute is a product of the process of evolution, having gradually developed in response to

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the emerging needs, increase in student enrolment, growth of membership and expansion ofactivities.

It is, therefore, obvious that the administrative structure has not always been in the shape inwhich it exists today. The Council has been periodically reviewing the Institute’s operatingsystems and procedures and creating the required mechanisms most appropriate forimprovement. When the need was felt for syllabus review, a high-powered committee wasset up in 1993. When a watch-dog was considered necessary to ensure implementation ofnew initiatives in educational field, another high-powered committee was constituted in1994 to reorganize the Education Department. When the Research Department’s efficiencywas not found upto the mark, a thorough review was ordered to locate the problem areas,pin-point deficiencies, identify causes and suggest remedial measures. And when the overall efficiency of the Institute called for re-assessment, a study into the operating systems andprocedures and performance of the Head Office and Branches was conducted in 1996 and itsfindings and recommendations implemented to the extent of practicability. Passing throughvarious such evolutionary stages, the Institute’s administrative set-up has attained itspresent form.

Immediately on the Institute’s founding and for a few years to follow, it had no properlyestablished administrative apparatus. In those days, most of the administrative work wascarried out by the Council members themselves on an ad-hoc basis under make-shiftarrangements. Then an Administrator was appointed with a skeleton staff. When a Canadian expert, Mr. N. J. Allan, came to the Institute in 1960, he helped in the organizationaldevelopment of the Institute. He was followed by other Canadian Advisors as discussedearlier in the book. They tried to develop some organizational infrastructure, but were moreconcerned with the Institute’s professional development and its educational activities. Theydid advise on administrative matters but left the actual administrative work to theAdministrator. But he did not have enough experience of running the administration of aprofessional institute. He was, therefore, sent to Canada for a period of three months in 1962,for attachment with the Society of Industrial and Cost Accountants to receive training inadministration and organization.

The same position continued until 1969, by which time the Institute had become fullyestablished, its educational programme made fully operational and its progress firmly set oncourse. What was needed to carry it forward on that course was the strengthening of itsadministrative structure. The Council, therefore, created a post of Executive Director andassigned to him the responsibility of implementing the approved policies and supervising

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Chapter Twelve: The Secretariat

the functioning of the entire Institute. The position was offered to Mr. A. M. Ansari, a SeniorFellow member of the Institute. He took up the assignment on 15th October, 1969. Having rich and varied experience of education and business, Mr. Ansari worked really hard to developan efficient organizational set-up. He toured several European and Asian countries toobserve and learn new trends in managing accounting education and to study the working of sister-institutes. On his return, some of his observations were implemented to positive effect.

At the top of the administrative set-up of the Institute is the Executive Director who is, inessence, the Chief Operating Officer, administratively controlling the overall functions of theInstitute at the Head Office. With him are eight Directors and two Deputy Directors, eachheading a separate department.

The Executive Director is the Secretariat’s main link with the Council. He organizes meetingsof the Council and its Executive Committee and is responsible for implementing theirpolicies and exercising control on all the major activities of the Institute. Besides executingthe policies formulated by the Council, it is also among his duties to keep the Councilapprised of the status of their implementation.

Director Education’s responsibilities include organizing meetings of the EducationCommittee, implementing its policies and decisions, conducting coaching classes andmaking all necessary arrangements for them, holding entry tests and monitoring theworking of the libraries. He has a Deputy Director and other junior officers and assistants toassist him.

In fact the work relating to education has been divided into three regions – Central, Northernand Southern – and separate directors appointed to manage, control and look after allmatters relating to education in their respective regions. Director Central Region looks afterLahore, Multan and Faisalabad, while Director Northern Region takes care of Islamabad,Peshawar, Abbottabad, Gilgit and Kohat. The Southern Region, comprising Karachi,Hyderabad and Quetta, has been assigned to a Deputy Director.

Director Examinations holds the responsibility for enrolment of examinees, selection ofpaper-setters and markers, printing and distribution of question papers to various centres,holding of examinations and all matters relating to them and compilation and declaration ofexam results. One Deputy Director and subordinate officers and assistants are there to assisthim.

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Director Research designs and develops viable functional research plans, implementsdecisions of the Research Committee, coordinates with professional bodies abroad engagedin research work, keeps members updated with current issues of topical interest, developsand publishes research papers, prepares Cost Accounting Records Rules for industries andliaises with government agencies and concerned organizations in trade, industry andcommerce. He is assisted by one Deputy Director, and one Research Assistant.

Director Corporate Relations deals with internship and placement, admission campaigns,image-building and public-relationing, members affairs, corporate training, holding ofseminars and conferences and publication of the Institute’s journal.

Director Administration and Finance is responsible for all matters relating to the Institute’sfinances and accounts, registration of members and students, CPE programmes, personneladministration, human resource development and construction and maintenance of theInstitute’s buildings. He is in constant liaison with the Institute’s Treasurer. One DeputyDirector and subordinate officers and assistants are there to help him in the discharge of hisduties.

Director Internal Audit’s job is to scrutinize the financial records and other financial activities of the Head Office and Branches of the Institute and to report his findings to the AuditCommittee for appropriate action. He only has assistants with him.

The Computer Department of the Institute is placed under a Deputy Director InformationTechnology, working directly under the Executive Director. He is assisted by IT officers andassistants. All matters relating to the Institute’s computer centres fall under his jurisdiction.He is responsible for providing technological support and computer services to members,students and all the departments of the Institute, such as technical support in automationsoftware, website and other related activities.

The present total strength of the Institute’s regular employees is 165 – 43 in management,directors and professionals grades and 122 in general grades. Of these, 98 work at the HeadOffice – 30 of senior and 68 of junior cadres. Organizational chart is at Table – XIII.

Executive Directors:

Since 1969 when the post of Executive Director was created, five persons have served theInstitute in this position.

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The first was Mr. Abdul Matin Ansari who joined the Institute on 1st October, 1969. He had arich and varied experience of education and business. Born at Lucknow, India in 1926, Mr.Ansari received his Master’s degree in Commerce from the Luckknow University in 1948 and later, LL.B. degree from the University of Karachi in 1954. After having passed the finalexamination of the Pakistan Institute of Industrial Accountants in 1953, he was elected as anAssociate of the Institute in 1957 and as Fellow Member in 1963. He had been a Member of the National Council, Education Committee, Examination Committee and the Chairman of theLibrary Committee eversince obtaining the Associateship of the Institute.

Mr. Ansari started his career as a lecturer with the Government College of Commerce andEconomics, Karachi in 1948 and taught various Commerce subjects at the graduation andpost-graduation levels. He qualified the Central Superior Services Examination in 1952 andserved as an officer in Income Tax Department of the Government of Pakistan. In 1954, heresigned from Government service and joined Hyesons Steel Mills Ltd. as a Cost Accountant. In 1956, he joined Forbes, Campbell & Co. Ltd,. as a Cost Accountant and Secretary of theForbes Group of Companies. When he joined the Institute, he put to optimum use this richexperience and all his professional skills to raise the Institute’s educational and trainingstandards and build its reputation. Throughout the decade and a half that he worked asExecutive Director, the Institute remained his twenty-four hour preoccupation and theprofession’s interests his burning passion. The Institute’s academic and professionalactivities even now distinctly bear the mark of his relentless efforts. He died of heart failureon 3rd June, 1983.

Mr. Ansari was succeeded by Mr. Zahid Hussain Subzwari who was born on 15th October,1939 in Badayun, U.P, India. He did his M.Com, securing second position, from SindhUniversity, Jamshoro and LLB degree in first division. He became Associate Member ofICMAP in 1968 and received Fellow Membership in 1974. He joined ICMAP as its ExecutiveDirector on May 5, 1983. Before joining the ICMAP, he had worked on various seniorpositions in the Government of Sindh, including that of Director, Price Control Wing. He was also on the visiting faculty of NIPA, IBP, BBP and SBP.

Soft-spoken and never losing his professional cool and objectivity, Mr. Subzwari was adedicated worker, competent and considerate executive, and a humble person, liked andrespected alike by his colleagues, juniors and seniors in the profession. He died on duty on2nd October, 1993 in Faisalabad while attending a meeting to find ways and means toconstruct the Institute’s building there with help from the Sitara Group.

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Mr. Mohammad Muazzam Siddiqui, the third in succession, was born in Gawalior State,India in 1934. He obtained the Bachelor of Commerce degree from the University of Karachiin 1958 and qualified the examination of the Institute in 1965. He became Fellow of theInstitute in 1983. He joined the Institute as Director Administration and Finance in 1987.After two and a half years, he was transferred to Examination Department as Director. InOctober 1993, he was promoted as Acting Executive Director, but continued to hold the postof Director Examination also. He retired in 1997.

Then came Mr. Mehmood Ahmed Lodhi, who joined the Institute on 11th July, 1995 asExecutive Director and retired on 31st March, 2000. Mr. Lodhi did his Master’s in History andPolitical Science. He became Fellow Member of the Institute in 1978. He had received training in Pakistan, USA and UK and had rich and varied experience in Audit and Accounts. He hadworked on senior positions in the Audit and Accounts Service of Pakistan and also asAdditional Secretary Expenditure in the Ministry of Finance, as Deputy Auditor General ofPakistan and as Accountant General.

The person to serve the Institute as the sixth Executive Director was Mr. Jalal Ahmad Khan.He joined the Institute as Executive Director on 17th Marchl, 2000 and resigned on 10th

November, 2001. He is a Fellow Member of the Institute and also holds Master’s degree inBusiness Administration from IBA. He is a Member of the British Institute of Management,UK and a Visiting Faculty Member of the Institute of Business Administration (IBA), Karachi.

Mr. Jalal Ahmad Khan is a very senior and experienced practising Management Accountantand Financial Analyst. He has served in multinational organizations on various seniorpositions and has also been associated with banks and insurance companies.

After Mr. Jalal Khan’s resignation, Mr. Noor Mohammad, Director Examinations, wasdesignated as Coordinator to look after the Executive Director’s work in addition to his ownduties. He was re-designated as Acting Executive Director in September, 2005.

Finances:

Finances of the Institute are controlled by the Council. The Cost and ManagementAccountants Act provides that:

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“(1) There shall be established a fund under the management and control of the Council,into which shall be paid all funds received by the Council and out of which shall be metall expenses and liabilities properly incurred by the Council.

“(2) The Council may invest any money for the time being standing to the credit of the fundin any government security or in any other security approved by the Council.

“(3) The Council shall cause maintenance of proper accounts of the funds distinguishingcapital from revenue.

“(4) The annual accounts of the Institute shall be subject to audit by a Chartered Accountantwithin the meaning of the Chartered Accountants Ordinance, 1961 (X of 1961).

Provided that no member of the Council or a person, who is in partnership with suchmember, shall be eligible for appointment as an auditor under this sub-section.

“(5) As soon as may be practicable after the close of each year, but not later than the thirtiethday of November next following, the Council shall cause to publish a copy of theaudited accounts and the report of the Council for that year, and copies of the saidaccounts and report shall be forwarded to the Federal Government and to all themembers of the Institute.

“(6) The Council may borrow from a scheduled bank, as defined in the State Bank ofPakistan Act, 1956 (XXXIII of 1956) or from the Federal Government:

a) any money required for meeting its liability on capital account on the security ofthe funds or on the security of any other assets for the time being belonging to itor

b) for the purpose of meeting current liabilities by way of temporary loans oroverdraft pending the receipt of income.”

Sources through which the Institute’s finances are raised include:-

Membership fees;Students tuition, registration and examination fees;Grants-in-aid from the Government;

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Interest on investment; and Income from other activities

The Government of Pakistan has contributed to a great extent in the development of theInstitute since its inception. Mr. M. Shoaib, the then President of the Institute, had played avital role in obtaining grant-in-aid from the Federal Government. In 1954, the Governmentsanctioned Rs.50,000 which was utilized towards the construction of the first building of theInstitute. Grants–in-aid have since been made regularly by the Government. Particularlysince the commencement of the Act in 1966, grants have become a constant annual feature.For the first four years, however, the amount was rather small and did not exceed Rs.20,000per year. It gradually increased, reaching Rs.15,00,000 per year in the year 2003 – 2004. Thetotal amount of Government grants–in–aid to the Institute in 40 years since its constitutionunder the Act comes to Rs.23.7 million. The annual grant is accounted for in the year ofreceipt and allocated as per the Council’s decision. It is generally used for payment ofhonoraria to teachers and examiners.

The Institute has gradually strengthened its financial position and is now comfortablyplaced. Starting with virtually nothing in the kitty in 1951, it had a very weak position even at the commencement of the Act in 1966. Its total assets as of 30th June, 1967 were Rs. 541,348, out of which cash and bank balance was only Rs.377,886. Although profit – making has neverbeen the Institute’s motive and it has always kept its fee structure perhaps at the lowest levelcompared to other professional institutes in the country, its present financial position can bedescribed as quite healthy and sound. This can be interpreted as an indication of the tightfinancial discipline and control exercised by the Council.

At the end of financial year 2005-2006, the Institute had cash and bank balance of Rs.4.15million and reserves of Rs.216 million. Its excess of income over expenditure was Rs.29.98million, representing a very healthy bottom line.

. .. .A Friend Indeed:

Being the body corporate of management accountants in Pakistan, the Institute is thecustodian of their interests and considers it its utmost duty to constantly keep working forthe development, strengthening and promotion of the profession, for identifying newemerging opportunities for its members, for helping them improve the quality of theirperformance, and for their welfare. The Institute never loses sight of the enormousresponsibility placed on its shoulders, in the ever-changing economic conditions and volatile

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business environment, to continue to take appropriate measures to maintain the continuityof the profession and its importance and relevance to the changing times as well as to prepare its members to discharge their duties and responsibilities towards the society in all situationsat all times.

To this end, the Council of the Institute has always been proactive and has worked to provide necessary guidance to the members and facilitate and help their professional development.The very heavy agenda of seminars, conferences, workshops, extension lectures and trainingprogrammes that we have already discussed, is drawn up with the intention to update andenrich the professional knowledge and skills of the members as well as to project theprofession as an active and growing profession. But professional knowledge and skillscannot really be developed overnight merely by attending conferences and seminars orlistening to lectures. These efforts have to be supplemented by issuing various research andother publications for the members’ benefit, as well to assist government and statutoryauthorities with expert comments on corporate legislations and finance bills. The Institute’sresearch and publications activities have been discussed quite comprehensively in a separate chapter. What we are more directly concerned with here is the role the Institute plays for thewelfare of its members.

The most important step for the members’ professional development and their welfare wasthe establishment in 2001 of the CMA Foundation to help and encourage the senior membersof the Institute. The aims and objects of the Foundation as laid down in its Memorandum ofAssociation and By-Laws include, among other things, promoting Cost and ManagementAccountancy as an independent profession in public practice; assisting and encouraging themembers in setting up independent practice; helping the practising members in organizingtheir practice on sound footing with high professional and ethical standards; assisting thepractising members in procuring professional assignments; fostering coordination withsimilar organizations abroad; and, undertaking various welfare activities for the benefit ofICAMP members, including provision of financial assistance in deserving cases.

The Institute also has a Placement Service which ventures to create more job opportunitiesfor ICMA members by projecting the wide range of services rendered by ManagementAccountants and the usefulness of these services for business and industry. It helps, on theone hand, the industry to pick up Management Accountants most suitable to itsrequirements and, on the other, the young accountants to find positions where their talentscan be best utilized. Initially, the Placement Service was handled by the AdministrationDepartment of the Institute. Presently, it is managed by the Corporate Relations Department.

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Through this Service, not only are the newly qualified members assisted in getting suitablejobs, but counselling and guidance are also offered to the under-employed members and tothose facing problems in their existing jobs.

Another welfare measure taken recently is the introduction of a Group Insurance Scheme.Under this scheme, every member upto 65 years of age, who regularly pays his annualsubscription, is insured by the Institute for Rs.100,000. In case of accidental death, the amount goes upto Rs.200,000. Members are also allowed to insure for upto Rs.500,000 under the same scheme by paying additional premium through the Institute.

Then there is the Members’ Benevolent Scheme, which was launched in 2002 with ten millionrupees transferred from the Members’ Welfare Fund. From this fund are helped thosemembers who lose their earning capacity. The families of deceased members can also benefitfrom this fund. The extent of financial assistance provided is Rs.5, 000 / 6,000 per month.

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Chapter Thirteen

The Road Ahead

What has been narrated, described and discussed in the foregoing pages about the past andpresent of the Management Accounting Profession in Pakistan bears ample testimony to theassertion that, having made a humble beginning more than half a century ago, ManagementAccounting has been able to develop into an active, efficient and respected profession.Considering the heavy odds, the testing limitations and the discouraging constraints theInstitute of Cost and Management Accountants of Pakistan had to face and brave, thissuccess story is, by all counts, one to be proud of. But the pride of past accomplishmentsshould not make the Institute complacent. Rather, it should work as a stimulus to drive theInstitute to do more and strive even harder to maintain its graph’s upward movement and toprotect the continuity and, more importantly, the relevance of the profession of ManagementAccounting and its acceptance in the fast changing global business environment.

Global Challenge:

During the last two decades, the world business scenario has undergone a major transition,affecting substantial changes both on the environmental and organizational levels. On theformer level, the globalization of markets, advances in information and productiontechnologies and increasing competition have, among other factors, contributed to changesin how organizations operate, trade and are managed. On the latter level, greater emphasishas come to be placed on core competencies, customer and supplier relationships, improvedquality of products and services, downsizing, outsourcing, flatter organizational structuresand team work. Obviously, the role and functions of the Management Accountant also has tochange to cater for these environmental and organizational changes in the business world.And to be able to play his changed role effectively, he requires wider knowledge, new orimproved skills, better training and greater emphasis in his education and training on the‘management’ side in addition to the ‘accounting’ side of his professional personality. Moreimportantly, he has to be trained to be an integral part of his organization’s strategicmanagement team, capable of making niche for himself in the top echelon.

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For producing such professionals, professional accounting institutes are required to sodesign their curricula and so chart their training programmes as to develop among thestudents even those qualities which were once thought to be reserved for academicinstitutions alone. Professional institutions are now expected and required to also worryabout human development areas like personality grooming, inter-personal skills,communication skills, etiquettes, ability to meet deadlines, time management, stressmanagement, organizational behaviour etc. in addition, of course, to in-depth subjectknowledge and practical exposure. And this represents a challenge for professionalaccounting institutes to change their traditional approach to education and training andrespond innovatively to the demands and expectations of the changed businessenvironment.

Environmental Constraints:

While the need to change traditional ways is shared equally by ICMAP with its likeselsewhere, there also are some other peculiar difficulties facing the profession in Pakistan.These are both environmental in nature and institutional in character. First theenvironmental ones.

The practice of Management Accounting takes firm roots into the market and thrives in abusiness environment where entrepreneurs are eager to increase the cost efficiency of theirproducts, make improvements in the overall processes and different phases of productionand ensure better utilization of resources. It is only when business and industry getgenuinely interested in changing the way their organizations operate, trade and aremanaged that the inevitability of adoption of sound Management Accounting practicesbecomes unmistakably clear and is appreciated by management.

Some professional and progressive industrial and commercial establishments in Pakistanhave shown good appreciation of this requirement. However, there are others who are notmuch enthusiastic about increasing cost efficiency by professional hard work and tend torely on the traditional approach of reducing expenses, and increasing profits, through meansnot always above board, or by pressurizing the government for subsidies and incentives. Asa result, many traditional organizations remain typically concerned only about financialaccounting and taxation matters rather than optimal utilization of resources through Costand Management Accounting techniques. This short sighted approach has, unfortunately,characterized the traditional business and industry in Pakistan for too long and has by nowbecome too well-entrenched in many instances to allow the improvement of processesthrough the adoption of the concepts and applications of Management Accounting.However, with the globalization of business activities, increased competition and greater

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Chapter Thirteen: The Road Ahead

emphasis on quality and prices, the environment is bound to change and has, in fact, begunto change even in the traditionally run industrial and commercial concerns, giving hope thatconditions in the years ahead will be more encouraging and favourable for the profession.

Adding to the inhospitability of the environment created by the unprofessional cost-savingpsychology of industry, trade and commerce is the not-so-supportive attitude of theGovernment. Perhaps under pressure from the industry or some other vested interests, theGovernment does not take serious interest in making cost audit mandatory for all industries,though the Companies Ordinance, 1984 does empower it to direct cost audit of companiesengaged in production, processing, manufacturing etc. Not that the concerned agencies arenot aware or convinced of the many advantages of cost audit for the industry itself, for theGovernment and for the consumers; but for some inexplicable reasons, they have refrainedfrom moving forward in this direction.

The Institute has not been guilty of lack of initiative in this regard. Being the regulator andpromoter of the profession, it has been doing its bit for years. It has been making approachesto the Government, contacting people in the right quarters, submitting drafts of Cost AuditRules and pressing for their enforcement. But the Institute’s efforts have so far met at bestwith partial success only. And even that partial success – the introduction of CARRs in threeindustries - has not practically made much appreciable headway in favour of ManagementAccountants. Besides the number of industries subjected to cost audit being very small, theaudit rights have been opened both to CMAs and CAs. This has enabled the CharteredAccountants, who have already been in the business of certifying financial accounts ofindustrial and commercial organizations, to take a large slice from this new but small cake.Initially, some restrictions were imposed requiring consulting chartered accounting firms tohave certified Cost and Management Accountants to do cost audit, thus opening some jobprospects for CMAs, though under the umbrella of Chartered Accounting firms. But thisrequirement was subsequently waived off and firms with sufficient years of experience werealso authorized to perform cost auditing jobs without having CMAs. The allocation of costaudit to Chartered Accountants also was in effect the denial of the much-needed opportunity to CMAs to gain sound footing in the exclusive area of their specialization. The dream of fullrecognition of specialized Management Accounting profession thus remains unrealized.

Further undermining the spirit and purpose of the useful concept of internal control is theunfortunate trend not to comply with the mandatory rules – not even in establishmentswhich fall in the categories of the three industries subjected to cost audit. The reason for thisis not too far to seek. There is no control or active feedback mechanism to ensure fullcompliance and ascertain the extent of non-compliance. Unless non-compliance is clearly

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perceived to have legal implications and negative consequences for business operations, thetrend will continue fearlessly to make a mockery of the rules.

The Government had established a Cost Accounts Organization to facilitate the development of costing policies but the Organization had not been granted due powers and necessaryauthority to implement costing policies and had, therefore, not been able to play an effective,or even noticeable role. The post of Chief Cost Accounts Officer in the Ministry of Finance has remained vacant for many years and there seems to be no sense of urgency in filling it,despite approaches by the Institute. It is worth recalling here that the office of the Chief CostAccounts Officer, when it was alive and active, played a significant role in helping theprofession’s development. Its virtual abolition has caused to dry up the Institute’s usefulsource of support in the Finance Ministry. Incidentally, a Chief Cost Accounts Officer’s postexists in India, to which is appointed a Fellow of the Institute of Cost and Works Accountantsof India. The post is equivalent to that of a Secretary to the Government of India.

The environmental problems discussed above have, as could be expected, negativelyimpacted the professional identity of Management Accountants and the healthy growth ofthis profession viz-a-viz the finance qualifications. But the fact remains that qualification inManagement Accounting indicates comprehensive and in-depth knowledge and skills about different processes and various costing elements and is preferred by wiser employers overfinance qualification. A study conducted in the United Kingdom in 2001 puts the percentageof such employers at 60.

Nonetheless, it has been observed that, on finding fewer opportunities in their own field ofspecialization, more and more qualified CMAs in Pakistan have been trying to work theirway up in the financial management and accounting areas. This, over a period of time, haschanged their perception from excelling in the area of Management Accounting to onlylimiting to Financial Accounting. They have thus, in many cases, moved away from theobjectives of the Institute’s curriculum and have been reduced to positions mainly infinancial management cadres of organizations instead of being responsible for valueaddition and organizational efficiency. Now the young members and students of ICMAP aremore inclined to see themselves as future heads of Finance and Accounting rather than asheads of Production, Costing, Inventory, and in today’s competitive scenario, as experts inBusiness Process Re-engineering, SAP-Enterprise Resource Planning, Activity-basedCosting, etc. Seeing the members’ propensity to move into other disciplines besidesManagement Accounting, the Institute did try to obtain legal rights for financial auditinstead of remaining focused on costing and internal audit. This well-meaning effort of theInstitute, which was prompted by a sincere desire to secure wider and newer pastures for itsmembers, produced, unfortunately, the un-intended effect of further confusing the

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understanding of the partly qualified and qualified CMAs about the true nature and worth of their profession.

Institutional Problems:

And now a look at the many institutional problems and weaknesses making it difficult forICMAP to rise to the high level it aspires for.

The first area of concern, which adversely tells on the standard of the Institute’s education, isthe poor quality of student intake. Having its roots in the over-all deterioration ofeducational standards in the country, the problem is not peculiar to ICMAP. What makes itmore difficult for the Institute is that most of the students entering it do not have sufficientgrounding in the English language to be able to follow lectures and write for the Institute’shigh standard examinations. While the Institute has taken a number of steps to improve theintake quality, it also has to get involved with improving the students’ proficiency of thelanguage and simultaneously pay greater attention to the quality and standard of teaching.But here again, the Institute’s efforts are hampered by the limited availability of capable andconscientious teachers for each term because of ever-increasing demand for them. For similar reasons, the students of correspondence courses also do not receive instruction and supportof requisite quality.

These problems in imparting quality education and adequately preparing the students toclear the examinations lead to high dropout rates and low pass percentages. A directoutcome of this has been the slow growth of the Institute’s membership strength, whichhappens to be the lowest in comparison with other professional accounting bodies. Lowering the examination standards or compromising on their quality is obviously not an option toconsider. The answer lies in committing adequate resources for classroom studies, forimproving quality of instruction, for learning facilities and for providing more teaching andlearning aids.

Another area of concern is the lack of, or atleast the less-than-desired emphasis on, practicalprofessional training in the Institute’s education and training programmes. In the beginning,when only employed persons used to opt for the Institute’s qualification, there was no issuewith regard to practical training. But now that the Institute attracts majority of studentsdirectly from academic institutions, the need for a meaningful practical training programmecannot be over-emphasized.

The Institute’s corporate relations need to be nurtured and promoted through theestablishment of a state-of-the-art training and development facility to offer capacity

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building opportunities to corporate employees and cater to their T&D needs in a moresophisticated and impressive manner.

The Institute’s advisory role to the Government does have large scope, which has remainedmore or less uncovered. It will be unrealistic to expect the Government to rush to ICMAPevery time it needs an advice. It is for the Institute to take initiative and come forward withtimely, well-researched position papers containing analysis of present position, future needsassessment and practicable suggestions. How best to perform this task on a continuing basisand through what institutionalized arrangement? Would formation of task forces,comprising senior members and co-opting subject experts, be of some help? Or, the Researchfunction should be strengthened? Such questions have been engaging the Institute’s thinking for quite some time.

Having dwelt on the challenge the profession faces globally and the testing localenvironment in which it has to work and having discussed the internal problems facing theInstitute, it becomes evident that it has to develop a clear, well-defined, distinct focus andstrictly adhere to it in whatever it does. The Institute has now entered an era which is farmore competitive and demanding than ever before. The competition it faces is not only inimparting education but also in meeting students’ expectations, in teaching methodologies,in providing sources of knowledge, in demographic factors such as location, in physicalinfrastructure, in public image and market reputation, and in the level of acceptance andabsorption of members in the industry.

The Institute’s internal endeavors alone to improve the quality of its graduates will not makemuch dent in the market unless it arranges to tell its own story in impressive and convincingterms. An aggressive public relations and marketing campaign has to be launched to ensurethat Management Accounting’s refinement and Management Accountants’ proficiency andimportance are widely felt, openly acknowledged and duly respected. If an institution doesnothing about its public relations, that inaction or apathy by itself gives rise to poor publicperceptions. Consciously, therefore, ICMAP needs to design a dignified public relationspolicy to enhance the status of itself and its members. This will not be something unusual fora professional institution. Practically every progressive professional group now-a-days hasrealized the importance of creating a good image of itself in the public by adopting thenecessary techniques of building up impressions based on facts. True that every professionalis his own advertisement and every job he does well, every exhibition of his ability and everydisplay of professional energy adds to positive perception about his profession. Equally true, however, is that his professional body should also tell the story of what profound knowledgeand skills its members possess, what they are capable of delivering and how efficiently, andhow important and beneficial it is for organizations to have them in their ranks.

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Care must, however, be taken to ensure that the public relations campaign is not reduced tobeating the Institute’s own drums only for the sake of feeling important and portraying itselfas such. It should better be intended to create better and more favourable conditions for theprofession to continue to be regarded as relevant, be in growing demand and earn respect. Its thrust should, therefore, not only be on projecting Management Accounting as an active andgrowing profession but also on educating the industry about the usefulness of adoptingManagement Accounting techniques and the importance of cost effectiveness, particularly in an era of intense competition in the wake of globalization of economies and introduction ofWTO.

Alongwith a comprehensive awareness and promotion campaign targeting the industry, theInstitute also has to aggressively work for a change of heart in Government circles, and to getremoved the continuing manifestations of its lack of interest in the promotion of theprofession of Management Accounting. This is easier said than done. However, the Institutemust keep trying for some of the immediate specific objectives, such as: a) the updating of the Cost and Management Accountants Act according to the changing professional educationalneeds; b) quick enforcement of mandatory cost audit in as many industries as possible; c)introduction of legal provisions requiring adoption of Management Accounting techniquesby organizations for value addition and better cost efficiency; d) recognition of CMAs’ legalrights; and e) restoration of CMAs’ independent exclusive jurisdiction in their area ofspecialization.

Change Management:

All the problems and difficulties facing the profession and all the weaknesses discussed inthe foregoing paragraphs have not only been in the full knowledge of the Institute’smanagement but have, in fact, been the matters of its utmost concern, receiving its deepestconsideration. The Institute has always shown full realization of the need to keep its eyesopen to see ground realities and has always had an open mind to respond positively to thedemands of the times. It has never insisted on “all is well”, knowing fully well that an ostrich-like attitude will push it into the suicidal slumber of inaction whereas the call of the hour is tostay wide awake and fully active. It has, therefore, always been the Institute’s policy tocontinuously assess the ground realities and make dispassionate analyses of objectiveconditions, to keep taking stock of the job and work market demands and of its ownshortcomings, to formulate plans to remove deficiencies and draw up strategies for furtherimprovements – all with an earnest desire to ensure self-correction and improvement.

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It was in furtherance of this very policy that in 2004, in the wake of changing market demands and aspirations, the Institute’s Council decided to initiate the change management processwith a scientific and logical approach. As a first step, it engaged a consultant in March 2005 toconduct a Market Perception Survey so as to have an independent holistic view of theperceptions prevailing in the cross-section of stakeholders about the competence andperformance of the Institute’s members and their expectations from them for meeting thenew challenges facing the business world. The exercise entailed interfacing with hundreds ofrandomly picked stakeholders from all over the country. An exercise of this nature had never before been undertaken by the Institute.

The consultant obtained feedback from the corporate and public sector, from the existing and potential employers of CMAs, the Institute’s members, students, faculty and employeesthrough questionnaires, meetings with focus groups and one-on-one interviews.

Report of the survey was presented to the Council in the beginning of 2006. It contained some revealing disclosures and made a number of recommendations, best summarized in the onereproduced below:

In order to create its true identify, set its direction right and position itself (firmly) in themarket, the Institute “should re-visit its mission, re-establish its identity and re-positionitself in the market as a Management Accountants' professional body.”

The National Council considered the consultant’s report and resolved to set into motion achange management process to revamp the Institute’s strategy to match the new demandsand meet the changed expectations of the stakeholders. Accepting the recommendationmade in the Market Perception Survey, the Council also decided to re-visit ICMAP’s visionand mission and develop a strategic plan for the Institute’s future.

Future Strategy:

For this purpose, the Council constituted a Working Group on ICMAP Strategic Planning asa task force. It comprised the following:

1. Mr. Mutee ur Rehman Mirza, FCMA Chairman2. Mr. Mohammad Arif Nara, FCMA Member3. Mr. M. H. Asif, FCMA Member 4. Mr. Muhammad Rafi, FCMA Member

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The Working Group, in its very first meeting, decided that, in order to develop Vision,Mission Statement and core Values, it must benefit from the views of the National Councilmembers, past Presidents, Chairmen Branch Councils, the Institute’s Directors and selectedsenior Members. It also decided to employ a non-partisan specialist consultant to facilitate itswork.

A special meeting of the National Council was organized on 27th and 28th May, 2006, devotedto developing Vision, Mission and core Values. It was attended by Chairmen of BranchCouncils also. After detailed deliberations, the Council approved the Vision, MissionStatement and Core Values as reproduced below:

“VISION – “To be the Preference in Value Optimization for Business”.

“Explanations:

The Council adopted the following explanations:

Preference means the best amongst all available alternatives.

Value Optimization means achieving optimal worth of resources applied.

Business means any organization, commercial or social, engaged in value additionwithin the economy or society.

Business and society at large would prefer ICMAP for seeking advice and guidance onvalue optimization leading to economic development.

Members of ICMAP would be the preference in value optimization for businesses.

The students will get value optimization when they prefer ICMAP for careerdevelopment.

“MISSION – “To develop strategic leaders through imparting quality education andtraining in Management Accounting, to continually set and upgrade professionalstandards and to conduct research, bringing value –addition to the economy”.

“Explanations:

The mission statement reflects three key reasons for ICMAP’s existence:

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1. To produce strategic leadership for business,2. To continually set and upgrade professional standards,3. To conduct research in value optimization.

All three activities will bring value addition to the economy. The first part of the mission i.e.to produce strategic leadership will be carried out through imparting quality education andtraining in Management Accounting. Not only the end is important here but the means toachieve the end are also equally important.

“CORE VALUES – IntegrityCompetenceProactivityInnovation

“Explanations:

If there ought to be a single value for the Institute, it could be nothing but integrity as it is anethical value. Then comes competence which makes it possible to produce results as it bringsresourcefulness in the character of a person. Similarly proactivity, if imbued into a person’scharacter, strengthens him to take initiative. It also has the inherent capability to amplify allattributes a person exponentially possesses. Last but not the least is innovation. Aninnovative Management Accountant would be an asset, as more and more businessesprepare for business process re-engineering.”

The Council advised the Working Group to use these values to articulate what ICMAPstands for and incorporate them in the Institute’s programmes and activities in such a waythat they permeate through everything the Institute does and get so incorporated into itsmembers’ and students’ behaviour as to become the distinguished hallmarks of theirpersonalities.

The Council further directed the Working Group to draw up a detailed strategic action planfor translating the Vision, Mission and adherence to Core Values into reality.

The Working Group identified and prioritized the areas in which strategic goals and ActionPlan needed to be identified. These are:

Re-positioningEducation and TrainingExamination and Certification

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Members’ InterestResearch and DevelopmentInformation and Communication TechnologiesMarketingOrganizational DevelopmentCascading the Strategic Plan

The Group held several meetings spanning over 800 hours of intense deliberations todevelop the Strategic Action Plan and presented the same to the Council. The Councildebated it threadbare in its marathon sessions on 27th May 2007, 4th & 5th August 2007 and 20th

October 2007, and approved it with some amendments.

The Strategic Plan covers the entire list of strategic goals in all their dimensions and identifiesspecific actions for achieving them. The Plan is the way forward to translating the Institute’s‘Vision’ into reality and fulfilling its ‘Mission’ to its full promise.

The Council realizes the fact that, in the changed global business environment, corporateentities expect Management Accountants to play a vital role in the formulation and effectiveimplementation of corporate strategy and ensuring optimum utilization of resources so as tobe competitive, both in terms of price and quality, for cross-border trade. This poses achallenge to ICMAP. Its product should be fully equipped to assume the role of strategicmanagers.

The Strategic Action Plan:

This book was scheduled to go to press when the epoch making work ‘Strategic Action Plan‘was approved. The printing was deliberately delayed to take advantage of the opportunity to conclude the historical narration, most appropriately, with the glimpse of things to come.

The Council took a series of far-reaching decisions on the recommendations of the WorkingGroup on Strategic Planning, regarding re-positioning, education and training, examinations and certification, Member’s interests, research and development, organizationaldevelopment and marketing. In view of their tremendous importance for the future of theprofession, major decisions are briefly outlined.

The Council decided to reposition the Management Accountant as one who plays key part inorganizational structuring, actively works to achieve the organization’s success, a catalyst inorganizational change management and participates fully in developing organizational

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control. Commensurating with the redefined role, Management Accountant’s functionswere also repositioned at strategic, operational and performance measurement levels as wellas in resource allocation.

The Institute’s own profile was also decided to be repositioned as a state-of-the-artprofessional education, examination, certification and regulatory body of ManagementAccountants; as an education institution of choice for students; a preferred source of supplyof professional accountants; a dependable institution for all stakeholders; an incubator ofR&D; a place to approach for HR-capacity building; and as a partner of the government in the development of economic and trade policies. To better reflect the repositioned profile, theCouncil decided that the Institute be renamed as ‘Institute of Certified ManagementAccountants of Pakistan’ (ICMAP) and the legal process to bring about this change beinitiated.

The meeting approved a succession plan for the National Council and Branch Councils anddecided to recommend changes in the size of the National Council and term of BranchCouncils, their office bearers, etc. Focus of the National Council was also decided to bereadjusted, concentrating more on strategy and policy issues and delegating all operationaldecisions to the Committees and management. Standing and Non-Standing Committeeswere also revised and a code of conduct for them drawn up.

Coming to education and training, the Council decided to adopt the Growth Model withstrict adherence to quality intake and output. Revising the admission policy, it decided toallow entry at intermediate or equivalent level also. In so deciding, the Council was guidedby the realization that most of the students take their career decisions at intermediate level.This new stream of entry would expectedly attract a larger pool for selection of career-oriented students possessing potential to become strategic managers. That potential wouldbe realized through a redesigned education programme. While the graduate and post-graduate stream of entry to professional qualification of ICMAP at bachelor’s level wouldcontinue to exist, the Council decided to require graduate students to attend ‘EnglishCommunication’ course of stage-1 of professional certification programme so as to improvetheir proficiency in the English language. Certain categories of students would, however, beallowed exemption from this requirements.

The Council okayed a revised education programme encompassing education infrastructurebasics, shifts in course emphasis, improvements in delivery system, schemes for practicalexposure and leadership development and a new education model having new and revisedcourses. Not stopping at that, the Council further decided to involve the end-users ofmanagement accounting services in the task of curriculum designing and development so

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that the Institute’s syllabus could be brought fully in tune with market demands andindustry’s need. For this purpose, it decided to form a syllabus expert team to be called‘Moderator Sub-Committee for Curriculum’ consisting of academicians, industry specialistsand entrepreneurs.

Yet another important decision in the education domain related to the gradual induction offull time faculty for bringing quality in teaching. After detailed discussion, the Councildecided to hire market competitive permanent teaching staff in phases. As a first step, twofull-time faculty members, each at Karachi, Lahore and Islamabad campuses, would beinducted to teach courses of two core areas: Financial Accounting and ManagementAccounting. It was also decided to beef up and improve the existing monitoring system forvisiting faculty.

The suggestion to start bachelor’s degree programme in Financial Management was alsoconsidered by the Council. Noting that such a programme could substantially improve theintake quality of the Institute’s post-graduate professional certification, the Council decidedto initiate discussions with the Higher Education Commission to explore variouspossibilities for starting an accredited bachelor’s programme. Further decisions in thisregard would depend on what transpires in those deliberations.

The working Group’s proposal to enlarge and expand ICMAP’s network was alsodeliberated upon. Appreciating the emerging globalization of education and the promisingpotential of professional education in Finance and Management in the GCC, Central AsianCountries and Afghanistan, the Council decided to seriously explore the possibility ofestablishing the Institute’s education and examination centres in these countries. It finalizeda list of countries with whose diplomatic missions discussions would be initiated for thispurpose. Criteria and benchmarks for opening ICMAP’s campuses/centres within thecountry too were decided.

Reviewing the related field of examination, the Council noted that the two key activities ofthe Institute’s examination system, namely setting of professional examination papers andtheir evaluation, needed improvement to fully comply with the international standards. TheCouncil also concluded that it was not realistic to expect high standard papers form part-time paper setters and for that reason, professional institutions the world over were increasinglyadopting computer-based testing (CBT). The Council decided to gradually follow thisinternational trend and move towards the ultimate adoption of CBT under a four-phasedprogramme.

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In the meantime, the existing examination system would be substantially improved througha number a steps. Some of these would be: preparation of papers with greater relationship tostatements of competencies and learning outcome; basing assessments both on competenceand capability; ensuring full coverage of course outlines; counseling students for expectedoutcomes; conducting mock examinations; more transparency in evaluation; preparingstandard solutions of better quality with examiners’ comments; introducing re-evaluationsystem; and putting in place arrangements for the assurance of the quality aspects ofexamination and its environment.

Alongside of the Institute’s core activities of education and examination, the Council gavefull consideration to promoting the Members’ interests and making the Institute serve themmore widely and more efficiently. Accepting the Working Group’s recommendations, itdecided to adopt a fresh approach to Continuing Professional Development (CPD) whichwould employ the input-based1 system for certain groups and the output-based2 concept for others. With a view to promoting lifelong learning among professional accountants andproviding to them professional development opportunities on a more systematic and well-coordinated basis through a properly institutionalized arrangement, the Council decided toestablish a CPD and Members’ Relationship Management Department (MRMD). The newDepartment will also be responsible to monitor the activities of the Branch Councils, liaisewith them to bring uniformity of approach in activities and motivate and assist them inorganizing CPD events. A number of other measures, aimed at enhancing Members’ Services and loyalty development, were also decided to be taken. These include, among others,introduction of new services, activation and strengthening of the CMA Foundation, securingconsultancy projects for Members, generating funds for scholarships and coordination withthe corporate sector to harness its potential for jobs, training and special projects.

Research and publication activities of the Institute also received a good deal of the WorkingGroup’s – and subsequently, the Council’s – attention. In view of importance of the Research, Quality Assurance & Ethics function, it was decided that there should be a ‘StandingCommittee’ with the title “Research, Quality Assurance & Ethics Committee”. It was decided that the main thrust would be on core technical and industry–related issues and on topicshaving a direct bearing on economic and industrial development. The need for undertakingmore and more collaborative research activities with prominent professional and academicinstitutions was also underscored. Further, the Research Department was directed to initiate

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1 Input-based: It established a set amount of learning activity that is considered appropriate to develop and maintaincompetence through seminars or courses attended / completed.

2. Output-based: It requires professional accountants to demonstrate, by way of outcomes, that they develop and maintainprofessional competence. It measures the development and maintenance of competence achieved through learning, ratherthan measuring the various learning activities completed.

joint projects with the government and relevant organizations on major topical national andregional issues. As this revised charter of responsibilities would require the ResearchDepartment to play a proactive and wider role, the Council re-endorsed its earlier decision torevamp and strengthen it by allocating additional resources in men and material. Similarly,the Council expanded the scope of responsibilities of the Publication Section and decided toform an independent editorial board for the ‘Management Accountant’ and otherpublications.

Information Technology was yet another area of importance to receive the Council’s seriousconsideration. It was decided to focus mainly on education in IT, IT for operational efficiencyand resource optimization and IT as a general learning resource. In the same context, theCouncil debated whether to go for in-house development of Enterprise Resource Planning(ERP) or opt for outsourcing and left the matter for further consideration by the Strategic Plan Implementation Committee.

As substantial changes in the approach, emphasis and style in almost all the areas of activityof ICMAP, as sketched above, were decided to be brought about, it was only logical that theorganization be correspondingly re-structured. The Council, therefore, decided that theInstitute’s structure will be ‘decentralized functional organization, through Committees’. Toconcretize this concept, the Council agreed to the Working Group’s recommendations toeffect basic re-structuring of the Departments and their functions; to make them responsibleboth for planning and implementation in their respective domains; to assign to theCommittees the roles of policy and decision making bodies for functional purposes and ofadvisors on administrative issue; to have only three regions, namely Southern, Central andNorthern, and one large centre with more members and resource in each region to act asregional head centre.

While these and many other re-structuring measures were approved for implementation, aneed was felt to properly streamline the internal functions of the Departments and re-distribute responsibilities evenly. As this would involve meticulous working, includingcarrying out detailed assessments of the present situation, developing job profiles anddescriptions, devising performance appraisal and feedback systems, planning for careergrowth and training, to mention a few, the Council decided that an organizationaldevelopment exercise be subsequently undertaken to be followed by the development ofSOPs to ensure operational efficiency of all the Departments.

Feeling confident that the decisions taken would bring about sea change in ICMAP and forthe profession in accord with the revisited vision, mission and core values of the Institute, theCouncil emphasised the imperative need to embark upon an aggressive marketing campaign

251


and approved a detail strategy to this end. The approved marketing strategy rests, interalia,on the preparation of service manuals for key stakeholders, better corporate relations andwell-targeted awareness and promotion campaign, undertaking research on industry’sneeds to serve as feedback for curriculum designing, securing placements and internships,promoting and diversifying liaison with the industry, broadening students’ intake andtaking measures to expand the profession. A strategy for cascading the new vision, missionand core values of the Institute as well as the Strategic Plan was also approved by theCouncil.

As would be appreciated, the Strategic Plan has all the ingredients required to translateICMAP’s new ‘Vision’ into reality, to turn its new ‘Mission’ into solid accomplishment andinculcate the ‘core Values’ into personalities as distinct attributes. But for all this to actualize,the Plan’s full implementation in real earnest is sine qua non. The Council was not unmindful of this. It also realized that the same spirited efforts should go into the Plan’s implementationas went into its preparation. It thought that the persons best suited to shoulderimplementation responsibilities could be no other than those who have so painstakingly putthe Plan in place. It, therefore, transformed the Working Group into ‘Strategic PlanImplementation Committee’ with the addition of a few members. The Committee so formedcomprises the following:

i. Mutee Ur Rehman Mirza, FCMA Chairman

ii. Mohammad Arif Nara, FCMA Member

iii. Muhammad Azam Khan Shad, FCMA Member

iv. M. H. Asif, FCMA Member

v. Muhammad Rafi, FCMA Member

vi. Mirza Munawar Hussain, FCMA Member

vii. Noor Muhammad, FCMA Member

viii. Muhammad Kamran Jamil Secretary

The Committee could form sub-groups from among its members to review each segment ofthe Plan in detail, assess practicability, coordinate with the concerned Committee andDepartment, work out financial impact, issue implementation directives where no financialimplications are involved, study the current impediments to implementation and proposesolutions and provide assistance and guidance to the Departments for the properimplementation of the segment relevant to them.

252


The Plan envisages a number of measures that cannot be initiated without first gettingamended the Act under which ICMAP was instituted and appropriately changing theInstitute’s Regulations. The Council, therefore, decided to take immediate steps to initiate the legal process for necessary amendments and changes to pave the way for the full and finalimplementation of the Plan

While all this has been and is being done, the Institute harbours no illusions. It knows that the road ahead is littered with difficulties and problems and traversing it with success represents a big challenge. But even bigger is the Institute’s resolve to continue to forge ahead withconfidence in the same determined spirit of progress that has been its hallmark sinceinception. On the Institute’s ability to translate that resolve into action will depend itssuccess. And if its long history of accomplishments in the face of heavy odds is taken as someclue, it should leave no doubt even in the skeptics’ mind that ICMAP’s future promises to bebrighter than its past.

253


Contents

Tables .............................................................................................................255

I Composition of National Council (1951-2006) .............................255

II Chairmen of Standing Committees (1966-2006) ..........................265

III Branch Councils (1966-2006)...........................................................268

IV Council Meetings (1951-2006).........................................................270

V Students Fees (1951-2006) ...............................................................280

VI (A) Tuition Fees (1968-1973) ..................................................................282

VI (B) Tuition Fees (1973-1985) ..................................................................283

VI (C) Tuition Fees (1986-1995)....................................................................284

VI (D) Tuition Fees (1995-2005) ..................................................................285

VI (E) Tuition Fees (2006-2007) ..................................................................285

VII Examination / Exemption Fees (1951-2006).................................286

VIII Yearwise Membership Growth (1951-2006) .................................294

IX Membership Fees (1951-2006) ........................................................296

X Publications.......................................................................................298

XI International Financial Reporting/Accounting Standards........303

XII SAFA Projects assigned to ICMAP................................................305

XIII Organizational Structure.................................................................306

Appendices .....................................................................................................307

A Memorandum of Association.........................................................307

B Articles of Association.....................................................................312

C Cost and Management Accountants Act, 1966 ............................335

Table - I

Composition of National Council(1951 - 2006)

Year Members of the Council1951-52 Mr. Mohammad Shoaib, President

Mr. Mumtaz Mirza, Vice-PresidentMr. M. H. Khan, Honorary Secretary & TreasurerMr. Iqbal Ahmad, Honorary Joint SecretaryMr. Rahim JanMr. N. M. PostwalaMr. R. M. Billimoria

1953 Mr. Mohammad Shoaib, PresidentMr. Mumtaz Mirza, Vice PresidentMr. Iqbal Ahmad, Honorary Secretary & TreasurerMr. Khurshid Ahmad, Honorary Joint SecretaryMr. Rahim JanMr. N. M. PostwalaMr. R. M. Billimoria

1956 Mr. Mumtaz Mirza, PresidentMr. Sohrab G. Mama, Vice PresidentMr. Iqbal Ahmad, Honorary General SecretaryMr. Riaz H. Bokhari, Honorary Secretary & TreasurerMr. N. M. PostwalaMr. R. M. BillimoriaMr. V. H. MumfordMr. Khurshid Ahmad

1957 Mr. Mumtaz Mirza, PresidentMr. N. M. Postwala, Vice PresidentMr. Iqbal Ahmad, Honorary General SecretaryMr. Riaz H. Bokhari, Honorary Secretary & TreasurerMr. F. M. KhanMr. R. M. BillimoriaMr. Khurshid AhmadMr. V. H. Mumford

255

Tables

1958 Mr. Mumtaz Mirza, PresidentMr. N. M. Postwala, Vice PresidentMr. Iqbal Ahmad, Honorary General SecretaryMr. Riaz H. Bokhari, Honorary Secretary & TreasurerMr. M. ShoaibMr. F. M. KhanMr. R. M. BillimoriaMr. NasiruddinMr. Khurshid AhmadMr. V. H. Mumford

1959 Mr. Mumtaz Mirza, PresidentMr. N. M. Postwala, Vice PresidentMr. Iqbal Ahmad, Honorary General SecretaryMr. Riaz H. Bokhari, Honorary Secretary & TreasurerMr. M. ShoaibMr. F. M. KhanMr. R. M. BillimoriaMr. NasiruddinMr. A. R. SiddiquiMr. Khurshid AhmadMr. Ali Husain

1960 Mr. Mumtaz Mirza, PresidentMr. N. M. Postwala, Vice PresidentMr. Iqbal Ahmad, Honorary General SecretaryMr. Khurshid Ahmad, Honry. Secretary & TreasurerMr. M. ShoaibMr. A. D. AzharMr. R. M. BillimoriaMr. F. M. KhanMr. Walter W. FeeMr. NasiruddinMr. A. R. SiddiquiMr. I. A. Burney

256

Tables

1961 Mr. Mumtaz Mirza, PresidentMr. N. M. Postwala, Vice PresidentMr. Iqbal Ahmad, Honorary General SecretaryMr. H. U. Butt, Honorary Secretary & TreasurerMr. M. ShoaibMr. R. M. BillimoriaMr. F. M. KhanMr. Khurshid AhmadMr. A. M. AnsariMr. M. AhsanMr. Walter W. FeeMr. I. A. BurneyMr. A. R. Khan

1962 Mr. Mumtaz Mirza, PresidentMr. N. M. Postwala, Vice PresidentMr. Khurshid Ahmad, Honorary General SecretaryMr. H. U. Butt, Honorary Secretary & TreasurerMr. M. ShoaibMr. Iqbal AhmadMr. R. M. BillimoriaMr. F. M. KhanMr. A. M. AnsariMr. A. R. Khan Mr. M. AhsanMr. Anis AhmadMr. Ausaf Hussain Agha

1963 Mr. Mushtaq Ahmad, PresidentMr. N. M. Postwala, Vice PresidentMr. Khurshid Ahmad, Honorary General SecretaryMr. H. U. Butt, Honorary Secretary & TreasurerMr. Iqbal AhmadMr. F. M. KhanMr. Musarrat HusainMr. Qaisar HussainMr. A. M. AnsariMr. A. R. Khan Mr. M. AhsanMr. Anis Ahmad

257

Tables

1964 Mr. Mushtaq Ahmad, PresidentMr. N. M. Postwala, Vice PresidentMr. Khurshid Ahmad, Honorary General SecretaryMr. H. U. Butt, Honorary Secretary & TreasurerMr. Iqbal AhmadMr. F. M. KhanMr. Musarrat HusainMr. Qaisar HussainMr. A. M. AnsariMr. M. AhsanMr. Anis AhmadMr. M. Ashraf

1965-66 Mr. Mushtaq Ahmad, PresidentMr. N. M. Postwala, Vice PresidentMr. Khurshid Ahmad, Honorary General SecretaryMr. H. U. Butt, Honorary Secretary & TreasurerMr. Iqbal AhmadMr. F. M. KhanMr. Musarrat HusainMr. Qaisar HussainMr. A. M. AnsariMr. M. AhsanMr. Anis AhmadMr. A. R. Khan

1966-69 Mr. Mohammad Shoaib, PresidentMr. Iqbal Ahmad, Vice PresidentMr. Khurshid Ahmad, SecretaryMr. Habibullah Butt, TreasurerMr. Mumtaz MirzaMr. Mushtaq AhmadMr. N. M. PostwalaMr. F. M. KhanMr. S. Qaisar HussainMr. A. M. AnsariMr. Anis AhmadMr. Abdur Rahman Khan

258

Tables

1969-72 Mr. Iqbal Ahmad, PresidentMr. Mohammad Yakub, Vice PresidentMr. Khurshid Ahmad, SecretaryMr. Anis Ahmad, TreasurerMr. M. ShoaibMr. Riyaz H. BokhariMr. H. U. ButtMr. S. Qaisar HussainMr. Abdul KhalequeMr. A. R. KhanMr. Ruhul QuddusMr. Faiz RasulMr. Masihur Rahman

1972-75 Mr. M. Yakub, PresidentMr. Khurshid Ahmad, Vice PresidentMr. H. U. Butt, Honorary Secretary & TreasurerMr. Anis Ahmad, TreasurerMr. M. ShoaibMr. Riyaz H. BokhariMr. Mahmood AshrafMr. Musarrat HusainMr. Anis A. K. LodhiMr. M. Sadiq KhanMr. S. Qaisar HussainMr. S. H. TehsinMr. Hafeezullah Malik

1975-78 Mr. Khurshid Ahmad, PresidentMr. Riyaz H. Bokhari, Vice PresidentMr. H. U. Butt, Honorary Secretary & TreasurerMr. Saeed Akhtar Saiyid, TreasurerMr. Musarrat HusainMr. S. Qaisar HussainMr. Mohammad IqbalMr. Ghulam Dastgir KhanMr. M. Sadiq Khan Mr. Abdul Ghaffar KhanMr. Anis Ahmad Khan LodhiMr. Anwaruddin Sabri

259

Tables

1978-81 Mr. Riyaz H. Bokhari, PresidentMr. H. U. Butt, Vice PresidentMr. Mahmood Ashraf, SecretaryMr. S. Qaisar Hussain, TreasurerMr. Mohammad IqbalMr. A. G. KhanMr. M. Sadiq KhanMr. Anis A. K. LodhiMr. Hafeezullah MalikMr. S. Anwaruddin SabriDr. Prof. Khawaja Amjad SaeedMr. Saeed Akhtar Saiyid

1981-84 Mr. Riyaz H. Bokhari, PresidentMr. H. U. Butt, Vice PresidentMr. Mahmood Ashraf, SecretaryMr. S. Qaisar Hussain, TreasurerMr. A. G. KhanMr. Saeed Akhtar SaiyidMr. M. Sadiq KhanMr. Hafeezullah MalikProf. Dr. Khawaja Amjad SaeedMr. Abdur Rahman KhanMr. Ainuddin SiddiquiMr. Mutee-ur-Rehman Mirza

1984-87 Mr. Riyaz H. Bokhari, PresidentMr. Ainuddin Siddiqui, Vice PresidentMr. S. Qaisar Hussain, SecretaryMr. Rais Ahmad Siddiqui, TreasurerMr. Saeed Akhtar SaiyidMr. M. Sadiq KhanMr. Hafeezullah MalikMr. M. Mumtaz AbdullahProf. Dr. Khawaja Amjad SaeedMr. Abdur Rahman KhanMr. Qaisar P. MuftiMr. S. M. Zafarullah

260

Tables

1987-90 Mr. Riyaz H. Bokhari, PresidentMr. M. Mumtaz Abdullah, Vice PresidentMr. S. Qaisar Hussain, SecretaryMr. Saeed Akhtar Saiyid, TreasurerMr. M. Sadiq KhanMr. Hafeezullah MalikMr. Nuruddin K. DamaniProf. Dr. Khawaja Amjad SaeedMr. S. M. ZafarullahMr. Ainuddin SiddiquiMr. Abdur Rahman KhanMr. Qaisar P. Mufti

1990-93 Mr. M. Mumtaz Abdullah, PresidentProf. Dr. Khawaja Amjad Saeed, Vice PresidentMr. Jamal Abbas Zaidi, Secretary/ TreasurerMr. Riyaz H. BokhariMr. Qaisar P. MuftiMr. Ainuddin SiddiquiMr. Abdur Rahman KhanMr. A. Razzaq Y. ThaplawalaMr. M. Sadiq KhanMr. Mohammad IqbalMr. S. M. ZafarullahMr. M. A. Lodhi

1993-96 Mr. M. Mumtaz Abdullah, PresidentMr. Qaisar P. Mufti, Vice PresidentMr. M. A. Lodhi, SecretaryMr. Mohammad Ashraf Bawany, TreasurerMr. Riyaz H. BokhariProf. Dr. Khawaja Amjad SaeedMr. Abdur Rahman KhanMr. A. Razzaq Y. ThaplawalaMr. M. Sadiq KhanMr. S. M. ZafarullahMr. Mohammad IqbalMr. M. H. Asif

261

Tables

1996-99 Mr. M. Mumtaz Abdullah, PresidentMr. Qaisar P. Mufti, Vice PresidentMr. M. A. Lodhi, SecretaryMr. Mohammad Ashraf Bawany, TreasurerMr. Riyaz H. BokhariProf. Dr. Khawaja Amjad SaeedMr. Abdur Rahman KhanMr. A. Razzaq Y. ThaplawalaMr. M. Sadiq KhanMr. S. M. ZafarullahMr. Mohammad IqbalMr. M. H. Asif

2000 Mr. M. H. Asif, PresidentMr. M. Ashraf Bawany, Vice PresidentMr. Badruddin Fakhri, SecretaryMr. Muhammad Rafi, TreasurerMr. Riyaz H. BokhariMr. Qaisar MuftiMr. S. M. ZafarullahMr. Mutee-ur Rahman MirzaMr. Abdur Razzaq Y. ThaplawalaProf. Dr. Khawaja Amjad SaeedMr. Javed IqbalMr. Abdus Sattar

2001 Mr. M. Ashraf Bawany, PresidentMr. Badruddin Fakhri, Vice PresidentMr. Muhammad Rafi, SecretaryMutee-ur-Rahman Mirza, TreasurerMr. M. H. AsifMr. Riyaz H. BokhariMr. Qaisar MuftiMr. S. M. ZafarullahMr. Abdur Razzaq Y. ThaplawalaProf. Dr. Khawaja Amjad SaeedMr. Javed IqbalMr. Abdus Sattar

262

Tables

2002 Mr. Badruddin Fakhri, PresidentMr. Muhammad Rafi, Vice PresidentMr. Mutee-ur-Rahman Mirza, SecretaryMr. Abdus Sattar, TreasurerMr. Riyaz H. BokhariMr. Qaisar MuftiMr. S. M. ZafarullahMr. Abdur Razzaq Y. ThaplawalaProf. Dr. Khawaja Amjad SaeedMr. M. H. AsifMr. M. Ashraf BawanyMr. Javed Iqbal

2003 Mr. Sher Afgan Malik, PresidentMr. Muhammad Rafi, Vice President Mr. Raheel Asghar Ginai, Honorary SecretaryMr. Muhammad Azam Khan Shad, Honorary TreasurerMr. Riyaz H. BokhariMian Mumtaz AbdullahMr. Badruddin FakhriMr. Mohammad Ashraf BawanyProf. Dr. Khawaja Amjad SaeedMr. Qaisar MuftiMr. Sajid HasanMr. Mahmood Ahmad Lodhi

2004 Mr. Sher Afgan Malik, PresidentMr. Muhammad Rafi, Vice President Mr. Raheel Asghar Ginai, Honorary SecretaryMr. Muhammad Azam Khan Shad, Honorary TreasurerMr. Riyaz H. BokhariMian Mumtaz AbdullahMr. Badruddin FakhriMr. Mohammad Ashraf BawanyProf. Dr. Khawaja Amjad SaeedMr. Qaisar MuftiMr. Sajid HasanMr. Mahmood Ahmad Lodhi

263

Tables

2005 Mr. Muhammad Rafi, President Mr. Qaisar Mufti, Vice PresidentMr. Muhammad Azam Khan Shad, Acting Honorary Secretary and TreasurerMr. Riyaz H. BokhariMr. Sher Afgan MalikProf. Dr. Khawaja Amjad SaeedMian Mumtaz AbdullahMr. Raheel Asghar GinaiMr. Badruddin FakhriMr. Mohammad Ashraf BawanyMr. Sajid HasanMr. Mahmood Ahmad Lodhi

2006 Mr. Sher Afgan Malik, PresidentMr. Mutee-ur-Rehman Mirza, Vice PresidentMr. Mohammad Arif Nara, Honoary SecretaryMr. Muhammad Azam Khan Shad, Honorary TreasurerMr. Muhammad Abdullah YusufMr. Arif MansurMr. Razi-ur-Rahman Khan *Mr. M. H. AsifMr. Muhammad RafiMr. Kashif Mateen AnsariMr. Hasan A. BilgramiMirza Munawar Hussain

* Mr. Rashid I. Malik replaced Mr. Razi-ur-Rahman Khan, as Government nominee, in 2006.

264

Tables

Table – II

Chairmen of Standing Committees(1966 – 2006)

Year ExecutiveCommittee

EducationCommittee

ExaminationCommittee

DisciplinaryCommittee

1966-67 Mr. M. Shoaib Mr. M. Shoaib Mr. Iqbal Ahmad Mr. M. Shoaib



1969-70 Mr. Iqbal Ahmad Mr. Iqbal Ahmad Mr. M. Shoaib Mr. Iqbal Ahmad

1970-71 Mr. Iqbal Ahmad Mr. Iqbal Ahmad Mr. Iqbal Ahmad Mr. Iqbal Ahmad

1971-72 Mr. Iqbal Ahmad Mr. Iqbal Ahmad Mr. Iqbal Ahmad Mr. Iqbal Ahmad

1972-73 Mr. M. Yakoob Mr. M. Yakoob Mr. KhurshidAhmad

Mr. M. Yakoob


Mr. M. Yakoob


Mr. M. Yakoob

1975-76 Mr. KhurshidAhmad

Mr. KhurshidAhmad

Mr. R. H. Bokhari Mr. KhurshidAhmad


Mr. KhurshidAhmad



Mr. KhurshidAhmad


1978-79 Mr. R. H. Bokhari Mr. R. H. Bokhari Mr. HabibullahButt

Mr. R. H. Bokhari

265

Tables


Mr. R. H. Bokhari


Mr. R. H. Bokhari


Mr. R. H. Bokhari


Mr. R. H. Bokhari


Mr. R. H. Bokhari

1984-85 Mr. R. H. Bokhari Mr. R. H. Bokhari Mr. AinuddinSiddiqui

Mr. R. H. Bokhari


Mr. R. H. Bokhari


Mr. R. H. Bokhari

1987-88 Mr. R. H. Bokhari Mr. R. H. Bokhari Mr. M. MumtazAbdullah

Mr. R. H. Bokhari


Mr. R. H. Bokhari


Mr. R. H. Bokhari

1990-91 Mr. M. MumtazAbdullah

Mr. M. MumtazAbdullah

Prof. Dr. KhawajaAmjad Saeed
















Mr. Qaisar P.Mufti


266

Tables



Mr. Qaisar P.Mufti


1996-97 Prof. Dr. KhawajaAmjad Saeed

Prof. Dr. Khawaja Amjad Saeed

Mr. M. A. Lodhi Prof. Dr. KhawajaAmjad Saeed



Mr. M. A. Lodhi Prof. Dr. KhawajaAmjad Saeed





1999-2000 Mr. M. H. Asif Mr. M. H. Asif Mr. M. AshrafBawany

Mr. M. H. Asif

2000-01 Mr. M. AshrafBawany

Mr. M. AshrafBawany

Mr. BadruddinFakhri

Mr. M. AshrafBawany

2001-02 Mr. BadruddinFakhri

Mr. BadruddinFakhri

Mr. MuhammadRafi

Mr. BadruddinFakhri

2002-03 Mr. Sher AfganMalik

Mr. Sher AfganMalik

Mr. MuhammadRafi

Mr. Sher AfganMalik


Mr. Sher AfganMalik

Mr. MuhammadRafi

Mr. Sher AfganMalik

2004-05 Mr. MuhammadRafi

Mr. MuhammadRafi

Mr. Qaisar Mufti Mr. MuhammadRafi


Mr. Sher AfganMalik

Mr. Mutee-ur-Rehman Mirza

Mr. Sher AfganMalik

267

Tables

Table – III

Branch Councils(1966 – 2006)

Year Branch Council1966-67 Hyderabad Lahore Rawalpindi/

WahDacca Chittagong

1967-68 Hyderabad Lahore Rawalpindi/Wah

Dacca Chittagong


Dacca Chittagong


Dacca Chittagong

1975-76 Lahore Rawalpindi/Wah




Islamabad


Islamabad


Islamabad


Islamabad Peshawar Karachi


Faisalabad Islamabad Peshawar Karachi Multan


Faisalabad Islamabad Karachi Multan


Faisalabad Islamabad Peshawar Karachi Multan

1985-86 Hyderabad Lahore Faisalabad Islamabad Peshawar Karachi Multan

268

Tables


Faisalabad Islamabad Karachi Multan

1987-88 Hyderabad Lahore Faisalabad Islamabad Karachi Multan

1988-89 Hyderabad Lahore Faisalabad Islamabad Karachi Multan

1989-90 Lahore Faisalabad Multan

1990-91 Lahore Islamabad Peshawar Karachi Multan Quetta


1992-93 Lahore Faisalabad Islamabad Peshawar Karachi Multan Quetta





1997-98 Lahore Islamabad Karachi Multan

1998-99 Lahore Islamabad Karachi

1999-00 Lahore Islamabad Peshawar Karachi Multan



2002-03 Karachi Lahore Islamabad Multan Quetta Faisalabad

2003-04 Karachi Lahore Islamabad Multan Quetta Faisalabad Peshawar



269

Tables

Table - IV

Council Meetings(1951 – 2006)

Number of Meeting Date Total Meetings HeldDuring a Year

1. 1st meeting2. 2nd meeting3. 3rd meeting4. 4th meeting

12th March, 19511st May, 195119th September, 195116th October, 1951

4 meetings in 1951

5. 5th meeting6. 6th meeting7. 7th meeting8. 8th meeting

18th January, 195213th March, 195220th May, 195219th November, 1952

4 meetings in 1952


7th April, 195329th May, 195322nd October, 195310th December, 1953

4 meetings in 1953


8th February, 195411th March, 195428th June, 195420th October, 1954

4 meetings in 1954

17. –18. –19. –20. –21. –22. –23. –

1st February, 19558th March, 195524th March, 195526th May, 195522nd August, 195523rd September, 19557th October, 1955

7 meetings in 1955

270

Tables

24. –25. –26. –27. –28. –29. –30. –

28th January, 19564th April, 19569th July, 19567th August, 195619th October, 195614th November, 195619th December, 1956

7 meetings in 1956

31. –32. –33. –34. –35. –36. –37. –

26th February, 195719th March, 195712th April, 195721st June, 195722nd July, 19576th November, 195717th December, 1957

7 meetings in 1957

38. –39. –40. –41. –42. –43. –44. –

6th January, 19583rd March, 195820th March, 195828th May, 19583rd July, 19583rd October, 195816th December, 1958

7 meetings in 1958

45. –46. –47. –48. –49. –50. –51. –

2nd February, 195921st February, 195914th April, 195925th July, 195922nd August, 195917th November, 195921st December, 1959

7 meetings in 1959

52. –53. –54. –55. –56. –57. –58. –59. –60. –61. –

2nd February, 196026th February, 196013th April, 196019th July, 196026th July, 196019th August, 196029th August, 196024th September, 196028th October, 196030th December, 1960

10 meetings in 1960

271

Tables

62. –63. –64. –65. –66. –67. –68. –69. –70. –71. –72. –73. –74. –75. –76. –

6th January, 196115th February, 19611st March, 19613rd April, 196121st April, 196111th May, 19618th June, 196129th June, 19617th July, 196118th August, 196127th September, 19617th November, 196114th November, 196123rd December, 196125th December, 1961

15 meetings in 1961

77. –78. –79. –80. –81. –82. –83. –84. –85. –86. –87. –88. –89. –90. –

6th February, 196228th February, 196212th April, 196219th April, 196230th May, 19628th June, 196220th June, 19622nd July, 196219th July, 196211th August, 196225th September, 196216th November, 1962 23rd November, 196231st December, 1962

14 meetings in 1962

91. –92. –93. –94. –95. –96. –97. –98. –99. –100. –101. –102. –

7th January, 19634th February, 196321st February, 19635th March, 196329th March, 196320th April, 196321st May, 196325th July, 196310th September, 19637th November, 196318th November, 196319th December, 1963

12 meetings in 1963

272

Tables

103. –104. –105. –106. –107. –108. –

10th March, 196428th April, 196427th July, 196421st August, 19647th October, 196415th October, 1964

6 meetings in 1964

109. –110. –111. –112. –113. –114. –115. –116. –117. –118. –

11th January, 196520th February, 19652nd April, 196517th June, 19654th August, 196524th August, 196524th September, 19655th November, 196524th November, 196515th December, 1965

10 meetings in 1965

119. –120. –121. –122. –123. –124. –125. –126. –

31st January, 196617th February, 196611th March, 19669th July, 196631st August, 19661sth November, 196615th November, 19668th December, 1966

8 meetings in 1966

127. –128. –129. –130. –131. –132. –

31st January, 196717th February, 19674th May, 19674th August, 19677th October, 196721st December, 1967

6 meetings in 1967

133. –134. –135. –136. –137. –138. –139. –

23rd January, 196822nd March, 196820th April, 19686th May, 196815th August, 196828th October, 196830th November, 1968

7 meetings in 1968

273

Tables

140. –141. –142. –143. –144. –145. –

3rd January, 196925th February, 196927th & 28th May, 196925th August, 196926th September 196915th October, 1969

6 meetings in 1969

146. –147. –148. –149. –150. –151. –

10th January, 197021st February, 197030th May, 197022nd August, 197017th September, 197030th October, 1970

6 meetings in 1970

152. –153. –154. –155. –156. –157. –158. –

31st January, 197127th February, 197125th April, 197122nd August, 197124th October, 19711st December, 197131st December, 1971

7 meetings in 1971

159. –160. –161. –162. –163. –

23rd March, 19721st July, 197227th August, 197212th October, 197213th November, 1972

5 meetings in 1972

164. –165. –166. –167. –168. –169. –170. –

6th January, 197318th February, 19731st July, 197320th July, 197323rd August, 197331st October, 197330th December, 1973

7 meetings in 1973

171. –172. –173. –174. –

20th February, 197426th May, 197421st August, 197424th November, 1974

4 meetings in 1974

175. –176. –177. –178. –179. –

22nd February, 197521st June, 197531st August, 197519th October, 197516th November, 1975

5 meetings in 1975

274

Tables

180. –181. –182. –183. –184. –

18th January, 197614th February, 197611th April, 19766th September, 197626th November, 1976

5 meetings in 1976

185. –186. –187. –188. –189. –

6th February, 19775th March, 197718th June, 197731st August, 197725th November, 1977

5 meetings in 1977

190. –191. –192. –193. –194. –195. –196. –

2nd February, 197822nd February, 197811th May, 19784th September, 197822nd September, 197830th November, 19783rd December, 1978

7 meetings in 1978

197. –198. –199. –200. –201. –

22nd January, 19794th March, 197914th June, 197929th August, 19796th December, 1979

5 meetings in 1979

202. –203. –204. –205. –

7th March, 198021st June, 19809th September, 198022nd November, 1980

4 meetings in 1980

206. –207. –208. –209. –

9th March, 198118th June, 19815th September, 198128th November, 1981

4 meetings in 1981

210. –211. –212. –213. –214. –

23rd January, 19827th March, 19826th June, 19827th September, 198226th December, 1982

5 meetings in 1982

215. –216. –217. –218. –219. –

2nd February, 198325th May, 198330th July, 19832nd November, 198329th November, 1983

5 meetings in 1983

275

Tables

220. –221. –222. –223. –224. –

26th January, 198418th March, 198415th July, 198420th October, 198425th November, 1984

5 meetings in 1984

225. –226. 104th meeting 227. 105th meeting228. 106th meeting

31st January, 19854th May, 19857th July, 19858th November, 1985

4 meetings in 1985


10th January, 198621st April, 19865th July, 198628th November, 1986

4 meetings in 1986

233. 111th meeting234. 112th meeting235. 113th meeting236. 114th meeting237. 115th meeting238. 116th meeting

14th February, 19871st April, 198726th June, 198715th August, 19876th November, 198718th & 23rd November, 1987

6 meetings in 1987

239. 117th meeting240. 118th meeting241. 119th meeting242. 120th meeting243. 121th meeting

23rd January, 198816th April, 198830th & 31st July, 198811th & 12th November, 19884th December, 1988

5 meetings in 1988

244. 122nd meeting245. 123rd meeting246. 124th meeting247. 125th meeting248. 126th meeting

6th February, 1989 19th May, 198931st July, 198910th November, 198923rd December, 1989

5 meetings in 1989

249. 127th meeting250. 128th meeting251. 129th meeting252. 130th meeting253. 131st meeting

2nd & 3rd February, 199026th May, 199026th July, 19905th October, 199023rd November, 1990

5 meetings in 1990

254. 132nd meeting255. 133rd meeting256. 134th meeting257. 135th meeting

20th January, 199126th April, 199117th July, 19918th November, 1991

4 meetings in 1991

276

Tables


28th January, 199218th May, 199231st July, 19923rd September, 199216th November, 1992

5 meetings in 1992

263. 141st meeting264. 142nd meeting265. 143rd meeting266. 144th meeting

28th January, 199321st April, 199324th July, 19933rd December, 1993

4 meetings in 1993


9th January, 199429th January, 199426th May, 199421st & 22nd July, 19944th November, 199430th November, 1994

6 meetings in 1994

273. 151st meeting274. 152nd meeting275. 153rd meeting276. 154th meeting277. 155th meeting

31st January, 199510th March, 199521st April, 199531st July, 199529th November, 1995

5 meetings in 1995

278. 156th meeting279. 157th meeting280. 158th meeting281. 159th meeting282. 160th meeting283. 161st meeting284. 162nd meeting

9th February, 199626th April, 199628th June, 19966th August, 199627th September, 19963rd November, 199623rd November, 1996

7 meetings in 1996

285. 163rd meeting286. 164th meeting287. 165th meeting288. 166th meeting289. 167th meeting290. 168th meeting

10th January, 199714th February, 199731st May, 19973rd August, 199714th September, 199728th November, 1997

6 meetings in 1997

291. 169th meeting292. 170th meeting293. 171st meeting294. 172nd meeting295. 173rd meeting

7th February, 19989th June, 199819th August, 199811th October, 199821st November, 1998

5 meetings in 1998

277

Tables


14th February, 19992nd May, 19994th July, 19991st August, 199915th August, 199924th October, 1999

6 meetings in 1999

302. 180th meeting303. 181st meeting304. 182nd meeting305. 183rd meeting306. 184th meeting307. 185th meeting308. 186th meeting

23rd January, 200013th February, 200013th May, 200023rd June, 200014th August, 200023rd September, 200013th November, 2000

7 meetings in 2000

309. 187th meeting310. 188th meeting311. 189th meeting312. 190th meeting313. 191st meeting314. 192nd meeting315. 193rd meeting

4th February, 20011st April, 200126th May, 200127th June, 200129th July, 20012nd November, 200123rd December, 2001

7 meetings in 2001


20th January, 200226th May, 200226th & 27th July, 200224th November, 200224th December, 2002

5 meetings in 2002

321. 199th meeting322. 200th meeting323. 201st meeting324. 202nd meeting325. 203rd meeting326. 204th meeting

19h January, 2003 8th & 9th March, 20031st & 4th May, 200320th & 25th July, 200325th & 26th October, 200320th December, 2003

6 meetings in 2003

327. 205th meeting328. 206th meeting329. 207th meeting330. 208th meeting331. 209th meeting332. 210th meeting333. 211th meeting

17th January, 200415th & 16th May, 4th & 6thJune, 200410th & 11th July, 20041st August, 200410th October, 200421st & 28th November, 200421st November, 200426th December, 2004

7 meetings in 2004

278

Tables

334. 212h meeting335. 213th meeting336. 214th meeting337. 215th meeting338. 216th meeting339. 217th & 218th meeting340. 219th meeting

15th January, 200527th February, 20056th May, 200516th & 17th July, 200523rd & 24th September, 200512th & 13th November, 2005and 23rd November, 2005 27th December, 2005

8 meetings in 2005

341. 220th meeting342. 221st meeting343. 222nd meeting344. 223rd meeting345. 224th meeting346. 225th meeting347. 226th meeting348. 227th meeting349. 228th meeting 350. 229th meeting

8th January, 200621st January, 200615th February, 20062nd April, 200627th May, 20069th June, 200623rd July, 20068th October, 200612th November, 200625th December, 2006

10 meetings in 2006

279

Tables

Table – V

Student Fees(1951 – 2006)

Year Registration Fee (Rs.) Annual Subscription (Rs.)

1951-1954 25 10

1955-1967 25 10

1968-1969 30 20

1970-1971 30 20

1972-1973 30 20

1973-1974 60 60

1974-1975 60 60

1975-1976 60 60

1976-1977 60 60

1977-1978 60 60

1978-1979 60 60

1979-1980 60 60

1980-1981 75 75

1981-1982 75 75

1982-1983 75 75

1983-1984 75 75

1984-1985 100 100

1985-1986 100 100

1986-1987 150 150

1987-1988 150 150

280

Tables

Year Registration Fee (Rs.) Annual Subscription (Rs.)

1988-1989 200 175

1989-1990 200 175

1990-1991 200 175

1991-1992 200 175

1992-1993 200 175

1993-1994 300 200

1994-1995 500 300

1995-1996 500 300

1996-1997 500 300

1997-1998 500 300

1998-1999 750 400

1999-2000 750 400

2000-2001 750 400

2001-2002 1000 600

2002-2003 1000 600

2003-2004 1100 650

2004-2005 1100 650

2005-2006 1100 650

281

Tables

Table – VI (A)

Tuition Fees (1968 – 1973)

Subjects Coaching Class Correspondence Courses1968-69 1970-71 1972-73 1968-69 1970-71 1972-73

Primary Rs. Rs. Rs. Rs. Rs. Rs.Principles of Accounting 40 40 60 LN

TB7535

7540

7540

Gen. Commercial Knowledge 20 20 40 LNTB

5010

5025

5075

Production Methods 20 20 40 LNTB

5035

5020

5020

Industrial & Commercial Law 20 20 40 LNTB

75NP

75NP

7512.5

Economics 20 20 40 LNTB

5010

5025

5025

Intermediate:Advanced Accounting 60 60 80 LN

TB12545

12570

12570

Fundamental of Cost Accounting 60 60 80 LNTB

12525

12540

12540

Statistics 30 30 50 LNTB

10010

10010

10010

Final:Management Accounting 80 100 100 LN

TB12545

12570

12570

Advanced Cost Accounting 80 100 100 LNTB

12525

12540

12540

Industrial Org. & Management — 80 80 LNTB

12525

12540

12530

Auditing & Income Tax — 100 100 LN*TB

17525

17534

17532

Note: LN= Lesson NotesTB= Text BookNP= Not Prescribedo Lesson Notes were provided separately for i) Auditing, and ii) Income Tax Course

282

Tables

Table – VI (B)


Subjects 1973-76 1977-84 1984-85Part-I Rs. Rs. Rs.Accounting-I 100 125 175Economics 80 100 125Industrial & Commercial Law 80 100 125Part-II

Cost Accounting 130 150 250Prod. Tech. & Mngt. 100 125 175Buss. Maths & Statistics 100 125 175Part-III

Accounting – II 150 175 250Off. Mngt & R. Writing 100 125 175Q. Tech. & D. Processing 100 125 175Part-IV

Advanced Cost & ManagementAccounting

200 250 400

Management 150 175 250Part-V

Financial Management 150 180 400Taxation 125 150 250Auditing & Company Law 125 150 250

283

Tables

Table – VI (C)


1986-88 1989-90 1990-93 1993-94 1994-95Part-I Rs. Rs. Rs. Rs. Rs.Accounting 200 225 300 350 500Economics 150 175 250 275 500Industrial & Commercial Law 150 175 250 275 500Part-IICost Accounting 300 325 400 450 600Business Communication & Report Writing

200 225 300 325 600

Buss. Mathematics & Statistics 200 225 300 325 600Part-IIIAdvanced Accounting 300 350 450 500 700Production Technology &Management

200 250 300 300 700

Taxation 200 250 300 300 700Part-IVAdvanced Cost & ManagementAccounting

500 575 625 675 800

MIS, Data Processing andQuantitative Techniques

300 375 450 450 800

Corporate Laws & SecretarialPractices

300 375 450 450 800

Part-VFinancial Management 500 600 650 700 1000Auditing 300 400 450 450 1000Organization & MarketingManagement

300 400 450 450 1000

284

Tables

Table – VI (D)


Year FoundationRs.

F-IRs.

F-IIRs.

P-IRs.

P-IIRs.

P-IIIRs.

P-IVRs.

1994-95 6500 — — 2400 2800 3200 4000

1995-96 6500 — — 2400 2800 3200 4000

1996-97 6500 — — 2400 2800 3200 4000

1997-98 6500 — — 2400 2800 3200 4000

1998-99 — 4000 3500 4000 4200 4500 4800

1999-00 — 4000 3500 4000 4200 4500 4800

2000-01 — 5000 5000 6000 6600 7200 7800

2001-02 — 5500 5500 6600 7200 7900 8600

2002-03 — 5500 5500 6600 7200 7900 8600

2003-04 — 6000 6000 7000 7500 8000 9000

2004-05 — 6000 6000 7000 7500 8000 9000

2005-06 — 6600 6600 7700 8250 8800 9900

Table – VI (E)


Year Stage-1Rs.

Stage-2Rs.

Stage-3Rs.

Stage-4Rs.

Stage-5Rs.

Stage-6Rs.

2006-07 8500 8500 10500 9500 10000 11000

285

Tables

Table – VII

Examination / Exemption Fees(1951 – 2006)

1951-54Intermediate -any one part Rs. 25Intermediate – Part I & II Combined Rs. 40Final – any one part Rs. 30Final – Part I & II together Rs. 50Combined Examination Rs. 60Diploma Intermediate Rs. 25Diploma Final Rs. 30

1955-1971

Examination FeePrimary 6 papers @ Rs. 5 Rs. 30Intermediate 5 papers @ Rs. 6 Rs. 30Final 5 papers @Rs. 7 Rs. 35

Exemption Fee

Same as for examination in the subject concerned.

286

Tables

1972-751. Primary Group

Principles of Accounting Rs. 10General Commercial Knowledge Rs. 5Production Methods Rs. 5Industrial & Commercial Law Rs. 5Economics Rs. 5

2. Intermediate GroupAdvanced Accounting Rs. 12Fundamentals of Cost Accounting Rs. 12Statistics Rs. 6

3. Final GroupManagement Accounting Rs. 14Advanced Cost Accounting Rs. 14Industrial Org. & Management Rs. 7Auditing & Income Tax Rs. 7

1976-79

Examination FeesPart –I Rs. 40 Part – II Rs. 55Part – III Rs. 55Part – IV Rs. 70Part – V Rs. 70

287

Tables

Exemption Fee

Subject Fee forIndividual

SubjectRs.

Fee for Two Subjects

Rs.

For Full Part

Rs.Part –Ii) Accounting –I 65.00 85.00ii) Economics 60.00 105.00iii) Industrial & Commercial Law 60.00 80.00Part –IIi) Cost Accounting 87.50 112.50ii) Prod. Tech. & Mngt. 80.00 137.50iii) Business Maths & Statistics. 80.00 100.00Part –IIIi) Accounting –II 92.50 117.50ii) Off. Mngt. & R. Writing 80.00 142.50iii) Quant. Tech. & D. Processing 80.00 105.00Part –IVi) Adv. Cost & Management 120.00 — 157.50ii) Management 107.50Part –Vi) Financial Management 107.50 138.75ii) Taxation 101.25 170.00iii) Auditing & Company Law 101.25 132.50

1980-85

Examination FeesPart –I Rs. 60 Part – II Rs. 75Part – II Rs. 75Part – IV Rs. 100Part – V Rs. 100

288

Tables

}}

}}

}}

}}

}

Exemption Fee

Subject Fee forIndividual

SubjectRs.

Fee for Two Subjects

Rs.

For Full Part

Rs.Part –Ii) Accounting –I 91.00 116.00ii) Economics 85.00 141.00iii) Industrial & Commercial Law 85.00 110.00Part –IIi) Cost Accounting 113.00 144.00ii) Prod. Tech. & Mngt. 106.00 175.00iii) Business Maths & Statistics. 106.00 138.00Part –IIIi) Accounting –II 119.00 150.00ii) Off. Mngt. & R. Writing 106.00 181.00iii) Quant. Tech. & D. Processing 106.00 138.00Part –IVi) Adv. Cost & Management 163.00

206.00206.00

ii) Management 144.00Part –Vi) Financial Management 144.00 183.00ii) Taxation 138.00 220.00iii) Auditing & Company Law 138.00 175.00

1986-91


289

Tables

}}

}}

}}

}}

}

Exemption FeePart-IAccounting Rs. 200Economics Rs. 150Industrial & Commercial Law Rs. 150

Part –IICost Accounting Rs. 250Buss Maths & Stats Rs. 175Buss C. & R. Writing Rs. 175

Part-IIIAdv. Accounting Rs. 300Prod. Tech. & Mngt. Rs. 200Taxation Rs. 200

Part-IVAdv. Cost & Management Accounting Rs. 400MIS Data Proc. & QT Rs. 250Company Law & Sec. Practices Rs. 250

Part-VFinancial Management Rs. 400Office Management Rs. 250Auditing Rs. 250

290

Tables

1992Examination FeesPart –I Rs. 250 Part – II Rs. 300Part – III Rs. 300Part – IV Rs. 550Part – V Rs. 550

1993-94


1994-95

Examination FeesNEW EDUCATION SCHEME:Foundation Course Rs. 650Intermediate Group (A) Rs. 750Intermediate Group (B) Rs. 750Final Group (A) Rs. 750Final Group (B) Rs. 1000

OLD EDUCATION SCHEME:Part –I Rs. 600 Part – II Rs. 700Part – III Rs. 800Part – IV Rs. 1000Part – V Rs. 1000

291

Tables

1996-2003

Examination FeesFoundation-I Rs.1, 200Foundation-II Rs.1, 200Professional-I Rs.1, 300Professional-II Rs.1, 300Professional-III Rs.1, 600Professional-IV Rs.1, 700

2003-2004

Examination FeesFoundation-I Rs.1, 200Foundation-II Rs.1, 200Professional-I Rs.1, 300Professional-II Rs.1, 300Professional-III Rs.1, 600Professional-IV Rs.1, 700

2005-2006

Examination FeesStage-1 Rs.1, 500Stage-2 Rs.1, 500Stage-3 Rs.1, 600Stage-4 Rs.1, 600Stage-5 Rs.1, 900Stage-6 Rs.2, 000Comprehensive Examination Rs.2, 500

292

Tables

Exemption FeesStage-1 Rs.10, 500Stage-2 Rs.10, 500Stage-3 Rs.12, 500Stage-4 Rs.11, 000Stage-5 Rs.12, 300Stage-6 Rs.13, 100

2006-2007

Examination FeesStage-1 Rs.1, 650Stage-2 Rs.1, 650Stage-3 Rs.1, 760Stage-4 Rs.1, 760Stage-5 Rs.2, 090Stage-6 Rs.2, 200Comprehensive Examination Rs.2, 500

Exemption FeesStage-1 Rs.11, 550Stage-2 Rs.11, 550 Stage-3 Rs.13, 750Stage-4 Rs.12, 100Stage-5 Rs.13, 530Stage-6 Rs.14, 410

293

Tables

Table – VIII

Year-Wise Membership Growth(1951 – 2006)

Year Fellow Associate Total Increase1951 — 2 2 —1952 — 5 5 31953 — 6 6 11954 3 7 10 41955 4 10 14 41956 4 11 15 11957 6 14 20 51958 6 16 22 21959 6 17 23 11960 6 19 25 21961 9 27 36 91962 9 38 47 111963 9 38 47 01964 9 49 58 111965 17 71 88 301966 21 79 100 121967 34 94 128 281968 36 112 148 201969 52 132 184 361970 67 144 211 271971 75 187 262 511972 86 210 296 341973 86 217 303 71974 99 226 325 22

294

Tables

1975 117 267 384 591976 126 316 442 581977 143 367 510 681978 149 405 554 441979 173 439 612 581980 180 459 638 261981 194 486 680 421982 496 214 710 301983 238 503 741 311984 253 504 757 161985 266 516 782 251986 281 507 788 061987 307 496 803 151988 326 510 836 331989 348 521 869 331990 349 537 886 171991 368 580 948 621992 396 585 981 331993 410 600 1010 291994 440 605 1045 351995 459 600 1059 141996 448 593 1041 (18)1997 464 675 1139 981998 493 749 1242 1031999 534 900 1434 1922000 559 1062 1621 1872001 556 1136 1692 712002 579 1368 1947 2552003 596 1594 2190 2432004 623 1811 2434 2442005 658 1964 2622 1882006 704 2224 2928 306

295

Tables

Table – IX

Membership Fees(1951 – 2006)

Admission Fees Annual Subscription FeesYear FCMA

Rs.ACMA

Rs.FCMA

Rs.ACMA

Rs.1951-52 200 100 40 201952-53 200 100 40 201953-54 200 100 40 201954-55 200 100 40 201955-56 200 100 40 201956-57 200 100 40 201957-58 200 100 40 201958-59 200 100 40 201959-60 200 100 40 201961-62 200 100 40 201962-63 200 100 40 201963-64 200 100 40 201964-65 200 100 40 201965-66 200 100 40 201966-67 200 100 40 201967-68 200 100 100 501968-69 200 100 100 501969-70 200 100 100 501970-71 200 100 100 501971-72 200 100 100 501972-73 200 100 100 501973-74 200 100 150 75

296

Tables

1974-75 200 100 150 751975-76 350 250 250 1501976-77 450 350 350 1501977-78 450 350 350 2501978-79 450 350 350 2501979-80 450 350 350 2501980-81 450 400 450 3501981-82 600 400 450 3501982-83 600 400 450 3501983-84 600 400 450 3501984-85 750 600 600 4501985-86 750 600 600 4501986-87 1000 750 750 5501987-88 1000 750 750 5501988-89 1200 750 750 5501989-90 1500 750 750 5501990-91 1500 1000 1000 7501991-92 1500 1000 1050 8001992-93 1500 1000 1100 8501993-94 1750 1000 1150 9001994-95 1750 1000 1200 9501995-96 1750 1000 1250 10001996-97 2000 1500 1500 12501997-98 2000 1500 1550 13001998-99 2000 1500 1600 13501999-00 2000 1500 1650 14002000-01 2000 1500 1700 14502001-02 2200 1500 1850 16002002-03 2200 1500 1900 16502003-04 2200 1500 1950 17002004-05 2200 1500 2000 17502005-06 2200 1500 2050 1800

297

Tables

Table – X

Publications(a) Seminars and Conferences

1. The Interpretations of Financial Statements and Operating Reports2. Economic Reforms Order, 19723. Effective Management Reporting System4. Tax Planning5. International Accounting Standards6. Effective Cash Management7. Corporate Laws, Companies Ordinance, 19848. Investment Strategy for Industrial and Economic Development 1988-899. Cost Audit Practical Guidelines10. Cost Accounting – A Tool for Performance Evaluation11. Privatization – An Overview12. Future Challenges for Audit13. Contemporary Issues of Today’s Economy 14. Role of Management Accountants in Developing Countries15. Modern Trends and Techniques of Management16. Challenges of 21st Century and the Role of Management Accountants17. Synergetic Dimension of Management18. Modern Economic Trends and International Challenges to Industries in Pakistan19. Responsibilities of Management Accountants in Developing Countries 20. Management Accountants in Changing Global Perspective21. The Edge of Management Accountants22. Management Accounting – Challenges and Prospects23. Legal Requirements for Listing of Companies – Need for Restructuring of

Corporate Laws24. Adding Value to Business25. Inflation Accounting26. Management Audit

298

Tables

27. Time Management 28. The Use of Financial Information by the Chief Engineers for Management of

Large-Scale Projects29. Divine Accounting 30. Exploring the New Frontiers of Management Accounting 31. Management Accounting for Optimal Utilization of Resources32. Interest-Free Economy and the Management Accountants33. Management Accountants Role in Market Economy 34 Debt-Management in Developing Countries35 Education and Training of Industrial Accountants36 Profitable Inventory Management 37 Productivity and Cost Control38 The Nature and Purpose of Organization39 Accounting Education in Pakistan 40 Waste in Project Planning, Investment Decisions and Project Implementation in

Public Enterprises in Developing Countries41 Excellence in Manufacturing Innovative Role of Management Accountants in

Strengthening Quality Management Systems42 Information Technology (Electronic Commerce)43 How to Install a Cost System44 International Accounting Standards45 Managerial Effectiveness 46 The Future of Management Accounting in Developing Countries47 The Integration of Managerial and Financial Accounting48 New Accountancy49 Internationalization of Accounting Profession50 Capital Structure of Public Enterprises51 Management Accounting in Government52 Constraints to the Acceptance and Achievement of the Need for Accounting and

Accountability53 The Application of Internal Auditing to Managerial Accounting54 Wither Management Accounting55 Performance and Financial Management in Public Sector Institutions56 Control Accountability and the Management Accountants57 The Convergence of Management Accountancy and Information Technology

299

Tables

58 Managing Accounting in the 21st Century59 The Management Accountants in the Information Age60 From Management Accounting to the Executive Management and the Board-

room61 The Challenge and Management of Change62 Computer Education of Accountants in South Asia63 Income Tax Ordinance 1979 – Critical Appraisal64 Match Unmatch / Revenue Record Unit65 Issues in Contemporary Manufacturing Management66 The Role of Management Accounting in Creating Value67 Cost and Management Audits for Banks68 Corporate Financial Reporting in SAFA Countries69 Management by Objectives70 Financial Management of Public Sector Industries71 Accounting Education in Different Social and Economic Environments – A Case

study from Pakistan72 Accounting in 21st Century – A Changing Profession for a Changing World

(b) Research73 Cost and Management Accounting Techniques Employed in Cotton Textile

(Ring) Spinning Industry of Pakistan74 Sugar Industry in Pakistan – Problems and Potentials75 Comparative Study of SAARC and South Asian Countries on General Sales Tax

or Value-Added Tax76 Input Costs and Corporate Tax Structure – An Analysis of Trends in SAARC

Region77 Role of Small and Medium Enterprises in GDP and Macro-Economic

Development of Pakistan78 Cost Audit Handbook79 Status of Research in SAFA Member Bodies80 Cost Accounting Records Rules81 Research Line Newsletters (1996-1999)82. Alternate Dispute Resolution (ADR)83. Research & Technical Update (since May 2006)

300

Tables

(c) Education84 Organization for Part V Examination85 Papers and Suggested Answers (Advanced Cost Accounting)86 Business Mathematics – An illustrated Glossary for Managers and Accountants87 Damani’s ICMAP Solution Series

(Part I – Winter Examination 1979- Accounting 1 Paper 1)88 Business Communication and Report Writing (Part-II)89 Business Mathematics and Statistics Study Programme for Part-II90 Marketing Management (Part-V)91 Advanced Cost and Management Accounting (Part-IV)92 Short Course on Application of Computers in Business Environment93 Corporate Laws and Secretarial Practice94 Production Technology and Plant Management (Professional II)95 Auditing (Professional – III)96 Auditing (Final Group- A)97 Financial Management (Final Group- B)98 Marketing Management and Organization Behaviour (Professional IV)99 Production Technology and Plant Management (Professional- II)

Taxation (Intermediate Group B)100 Advanced Cost Accounting (Final Group A)101 Management Accounting (Professional – III)102 Corporate Performance Evaluation (Professional – IV)103 Management Accounting (Professional – III)104 Industrial and Commercial Law (Professional – I)105 English Grammar and Composition (Foundation Course)106 Quantitative Techniques107 Principles of Accounting (Foundation Course)108 Financial Accounting (Professional – I)109 Management Information System (Professional- IV)110 Industrial and Commercial Law (Professional – I)111 Financial Accounting (Professional – I)112 Advanced Financial Accounting (Professional – II)113 Business Communication and Report Writing (Foundation Course)114 Management (Final Group A)115 Quantitative Techniques (Intermediate Group A)116 Cost Accounting (Professional – I)

301

Tables

(d) Legal117 Memorandum and Articles of Association of Pakistan Institute of Industrial

Accountants118 Cost and Management Accountants Act, 1966 and Cost and Management

Accountants Regulations (various amended versions)119 Word Index of the Act and the Regulations120 Provisions Relating to Accounting and Auditing in the Companies Law, 1984121 Report of Reorganization Committee122 Memorandum of Association and By-Laws of Cost and Management

Accountants Foundation123 Management Accountancy Registration, Admission and Examination Rules124 ICMAP Employees Fund Trust Deed and Rules125 ICMAP’s Mission Statement126 Legislating Cost Audit in Pakistan – a Memorandum

(e) Miscellaneous127 Colombo Plan Assistance to PIIA128 The Association of Accounting Technicians of Pakistan129 Social and Political Impact of Multinationals on Third World Countries and its

Accounting Implications130 Glossary of Common Computer Terms131 Auditing132 Basic Accounting Short Courses for Pakistan International Airlines Corporation133 How to make a Profit Plan134 Finance Leasing Guide for the Lessee in UK135 Financial and Administrative Approvals136 Report on Insurance Section, PIA137 Cargo Accounting at John. F. Kennedy Airport, NY138 A Short Description of Airline Industry and its Accounting Procedures139 Functions of Public Accountants Association 140 Basic Accounting – An in-Company Course for Pakistan Airlines Corporation

302

Tables

Table XI

International Financial ReportingStandards (IFRSs)

IFRS 1 First-time Adoption of International Financial Reporting Standards IFRS 2 Share-based Payment IFRS 3 Business Combinations IFRS 4 Insurance Contracts IFRS 5 Non-current Assets Held for Sale and Discontinued Operations IFRS 6 Exploration for and evaluation of Mineral Resources IFRS 7 Financial Instruments: Disclosures IFRS 8 Operating Segments

International AccountingStandards (IASs)

IAS 1 Presentation of Financial Statements IAS 2 Inventories IAS 7 Cash Flow Statements IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors IAS 10 Events After the Balance Sheet Date IAS 11 Construction Contracts IAS 12 Income Taxes IAS 16 Property, Plant and Equipment IAS 17 Leases IAS 18 Revenue IAS 19 Employee Benefits IAS 20 Accounting for Government Grants and Disclosure of Government Assistance

303

Tables

IAS 21 The Effects of Changes in Foreign Exchange Rates IAS 23 Borrowing Costs IAS 24 Related Party Disclosures IAS 26 Accounting and Reporting by Retirement Benefit Plans IAS 27 Consolidated and Separate Financial Statements IAS 28 Investments in Associates IAS 29 Financial Reporting in Hyperinflationary Economies IAS 31 Interests in Joint Ventures IAS 32 Financial Instruments: Presentation IAS 33 Earnings per Share IAS 34 Interim Financial Reporting IAS 36 Impairment of Assets IAS 37 Provisions, Contingent Liabilities and Contingent Assets IAS 38 Intangible Assets IAS 39 Financial Instruments: Recognition and Measurement IAS 40 Investment Property IAS 41 Agriculture

304

Tables

Table – XII

SAFA Projects Assignedto ICMAP

Project Year of Completion

Computer Education 1989

Education through SAFA countries 1989

Project Appraisal in SAFA countries 1994

Action Plan for SAFA 1989

Study on Research in SAFA Member Bodies 2004

Study on Accrual-Based Accounting for Governments andPublic Sector Entities in SAARC Countries

2006

305

Tables

Appendex A

Memorandum of Associationof

Pakistan Institute of Industrial Accountants

Name:

The name of the Company (hereinafter called “The Institute”) is

“THE PAKISTAN INSTITUTE OF INDUSTRIAL ACCOUNTANTS’.

Registered Office:

2. The registered office of the Institute will be situated in Karachi.

Objects:

3. The objects for which the Institute is established are:-

(a) To provide a professional organization of Industrial Accountants in ally to do allsuch things as may, from time to time, be necessary to elevate the status andprocure the advancement of the interests of the profession.

(b) To provide for training in Industrial Accounts by arrangement of facilities fortuition, and by a system of examinations and the issue of certificates.

(c) To promote and foster in commercial circles, Engineering profession andAcademic institutions a higher sense of the importance of a knowledge ofsystematic and correct Industrial Accounts, and to encourage a greater ofefficiency in those engaged in such work.

307

Appendices

(d) To provide opportunities for intercourse amongst the members, and to givefacilities for the reading of papers and delivery of lectures and the maintenanceof a Library and for the acquisition and dissemination by other means of usefulinformation connected with the procession, and to encourage improvedmethods of costing.

(e) To watch over, promote and protect the mutual interests of its members.

(f) To assist necessitous members, and any of the dependent kindred of deceasedmembers and the widows of members, to act as treasurer and distributor of anybenevolent fund or funds, which may be contributed by members or others forthese purposes or any of them, and, subject to the provisions of clause 4(prohibiting payments being made to members) to make any contribution out ofthe surplus assets or income of the Institute, from time to time, to any suchbenevolent fund or funds.

To hire, purchase, have, hold and dispose of any buildings to be used as an Institute,college or lecture rooms, or any other property, real or personal, for the advancement of the above objects or any of them.

To borrow or raise or secure the payment of money and in particular, by the issue ofDebentures or debenture stock, perpetual or otherwise, charged upon all or any part ofthe undertaking, revenue and property of the Institute (present or future) and topurchase, redeem or pay off any such securities.

To procure the Institute to be registered or recognized in Pakistan and other countries.

To grant pensions or gratuities to any persons who, are for the time being, or shall atany time have been paid officers or employees of the Institute or the relations ordependents of any such persons.

To provide scholarships, prizes, medals or other awards in connection with the subjects of the examinations held by the Institute or otherwise in relation, to the profession ofIndustrial or Cost and Works Accountancy.

To admit men and women alike to membership of the Institute on the same terms andconditions.

To do all such other lawful things as are incidental or conducive to the attainment of the above objects or any of them.

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Application of Income:

4. The income and property of the Institute Vancouver derived shall be applied solely foror towards the promotion of the objects of the Institute as herein set forth, and noportion thereof shall be paid or transferred directly or indirectly by way of dividend orbonus or otherwise, howsoever, by way of profit to the persons who are or at any timehave been, members of the Institute, or to any person or persons claiming through all or any of them. Provided that nothing herein contained shall prevent the payment in good faith of remuneration etc. to any officers or servants of the Institute or to any memberthereof or to any other person or persons in return for services actually rendered to theInstitute, or for the payment of actual travelling expenses in connection with anybusiness or the Institute or payment of interest on money borrowed from any membersof the Institute.

Condition of Government Licence:

5. The fourth paragraph of this Memorandum is a condition on which a licence is grantedby the Government to the Institute, in pursuance of Section 26 of the Companies Act1913.

When Liability is Unlimited:

6. If a member of the Institute pays or receives any dividend, bonus or other profitcontravention of paragraph 4 of this Memorandum, his liability shall be unlimited.Except as above, the liability of the members is limited as hereinafter mentioned.

Liability of Members:

7. Every member of the Institute undertakes to contribute to the assets of the Institute inthe event of the same being wound up during the time that he is a member, or withinone year afterwards, for payment of the debts and liabilities of the Institute contractedbefore the time, at which he ceases to be a member and costs, charges and expenses ofwinding up the same and for the adjustment of the rights of the contributors amongstthemselves, such amount as may be required, not exceeding Rs.25. The liability ofmembers is thus limited.

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Disposal of Property on Dissolution:

8. If, upon winding up or dissolution of the Institute, there remains, after the satisfactionof all its debts and liabilities any surplus money or property whatsoever, the same shallnot be paid to or distributed among the members of the Institute, but shall be given ortransferred to some other institution or institutions, having objects similar to the objects of the Institute to be determined by the members of the Institute present at generalmeeting at or before the time of the dissolution, and in default thereof by such Judge ofthe Chief Court at Karachi as may have or acquire jurisdiction in the matter.

Accounts and Audit:

9. True accounts shall be kept of the sums of money received and expended by theInstitute, and the matter in respect of which such receipt and expenditure takes place,and of the property, credits, and liabilities of the Institute, and subject to any reasonable restrictions as to the time and manner of inspecting the same that may be imposed inaccordance with the regulations of the Institute for the time being, be open to theinspection of the members. Once at least in every year the accounts of the Institute shall be examined and the correctness of the balance sheet ascertained by one or moreproperty qualified auditor or auditors.

10. The cost of an incidental to the formation and registration of the Institute shall be paidby the Institute.

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We the several persons, whose names and addresses are subscribed, are desirous of beingformed into a Company in pursuance of this Memorandum of Association.

Name and Description of the Signatures Address Witness toSignatories

1. M. Shoaib,Financial Adviser (Communications),Government of Pakistan

203/B,Frere RoadE. I. Line, Karachi

Aziz Ahmad, P. A. to Financial

AdviserCommunications),

Government ofPakistan, Karachi

2. Mumtaz Mirza,Financial Adviser (Military),Government of Pakistan

21, Illaco House,Victoria Road

Karachi3. M. H. Khan,

Cost Consultant to Government of Pakistan

48, Zeenat Mansion,McLeod Road

Karachi4. Rahim Jan,

Chartered Accountant65, The Mall

Lahore5. N. M. Postwala

Incorporated Accountant51, Forbes Bldg.,

Karachi6. R. M. Billimoria,

Incorporated Accountant4, Rewa Mansion,

Frere Road, Karachi7. Iqbal Ahmad,

Cost AccountantPakistan Aviation Ltd.

38/5,Jehangir RoadKarachi

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Appendex B

Articles of Associationof the

Pakistan Institute of Industrial Accountants

Interpretation

Definition:

1. In the interpretation of these presents the following words and expressions have thefollowing meaning, unless excluded by the subject or context: -

(a) ‘The Institute” means the Pakistan Institute of Industrial Accountants.

(b) “The Statutes” mean and include the Companies Act 1913-36 and every otherAct for the time being in force affecting the Institute.

(c) “These presents” mean and include the Memorandum of Association of theInstitute and the Articles of Association and the Byelaws and the regulations ofthe Institute for the time being in force.

(d) “The Bye-Laws” mean the By-Laws of the Institute for the time being in force.

(e) “The profession” means the profession of Industrial or Cost and WorksAccountancy.

(f) “The Office” means the Registered office for the time being of the Institute.

(g) “Month” means calendar month and “year” means the year ending 30 June.

(h) “In writing” and “written” include printing, lithography and other modes ofrepresenting of reproducing words in a visible form.

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(i) “The Council” means the National Council of the Institute as hereinaftermentioned.

(j) words importing the singular number include the plural number and vice versa.

(k) words importing the masculine gender include the feminine gender.

2. The Institute, for purposes of registration, is declared to consist of an unlimited number of members.

3. The Institute is established for the purposes expressed in the Memorandum ofAssociation.

Qualifications and Admission of Members

Classes of Members:

4. There shall be three classes of Members; Fellows, (including Honorary Fellows),Associates (including Honorary Associates) and General Members.

Qualifications for Fellows:

5. Except as hereinafter provided, no person shall be eligible for admission as a Fellow ofthe Institute, unless he has attained the age of twenty-six years and at the date of hisapplication for admission as a Fellow has been an Associate for five years and for acontinuous period of not less than five years next before the date of his application hasheld a position as Chief Cost Accountant or an equivalent appointment or has been inpractice as a Consulting Industrial or Cost Accountant. The decision of the Councilregarding any case as to whether an applicant has held a position as Chief Accountantor an equivalent appointment, or is actually practising as a Consulting Industrial orCost Accountant, or on any other matter arising in this connection shall be final.

Use of “F. P. I. A”

6. Any person who is elected as a Fellow shall, while he remains a member of the Institute, be entitled to describe himself as Fellow of the Pakistan Institute of IndustrialAccountants, and to use the qualifying letters “F. P. I. A.” after his name.

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Qualifications for Associates:

7. Except as hereinafter provided no person shall be eligible for admission as an Associate unless he has attained the age of twenty-one years, and has at the date of his application for admission as an Associate had three years’ practical experience of cost-accountancyand has satisfied the requirements of the Council respecting the qualifyingexaminations as may be decided by them and is at the time election as an Associate,actually engaged, either in service or in profession as Industrial or Cost Accountant orin a similar position. The decision of the Council in any case as to whether the applicanthas the necessary qualifications shall be final.

Use of “A. P.I. A.”

8. Any person who is elected as an Associate shall, while he remains a member of theInstitute, be entitled to describe himself as an Associate of the Pakistan Institute ofIndustrial Accountants and to use the qualifying letters “A. P. I. A.”

8-A. No person shall be eligible for admission as a General member, unless he hadattained the age of 26 years. The decision of the Council, as to whether anapplicant is suitable for General Membership, shall be final. The Council alsoreserves the right to terminate the membership of any General member withoutassigning any reason.

Dispensation:.

9. Dispensation from any of the foregoing conditions as to admission to Fellowship orAssociationship may be granted by the Council in exceptional cases. Such dispensationwill be granted only by resolution, passed by a majority of not less than three-fourths of the members of the Council present, and voting at a Meeting of the Council speciallyconvened with notice of this object, at which meeting not less than one-half of themembers of the Council shall be present.

Provided that the powers conferred on the Council under this article shall lapse as soonas the total number of Members (Fellows and Associates) exceeds 100.

Membership Certificates:

10. Every member shall be entitled to a certificate of admission. Certificates of admission to the ranks of Fellows and Associates shall be in a form to be prescribed by the Council.

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Undertaking to abide by the rules:

11. Every member of the Institute shall, upon applying for admission, sign the engagement to observe these presents and the rules and regulations of the Institute, for the timebeing in force, as set forth in each of the forms of application for admission.

Deceased Members:

12. Any one ceasing by death or otherwise to be a member of the Institute shall not, norshall his representatives, have any claim upon or interest in the funds of the Institute;but this Article shall be without prejudice to the rights of the Institute to claim from hisestate any arrears of subscription or other sums due from him to the Institute at the time of his ceasing to be a member.

Members Address:

13. Every member shall from time to time notify to the Secretary a place of business orresidence to be registered as his place of address, and the place so from time to timeregistered shall for the purposes of the statutes and these presents be deemed his placeof address.

Members’ Resident Abroad:

14. If any member shall fail to give a place of address in Pakistan, he shall not be entitled toreceive notice of any of the General Meetings or other proceedings of the Institute, andno meetings or other proceedings shall be invalidated by reason of his not havingreceived such notice as aforesaid.

Inspection of books:

15. The Secretary shall allow between the hours prescribed by the Council, such inspectionof the register of members or other registers as is provided by the Statutes, and suchinspection of the books as is provided for by clause 9 of the Memorandum ofAssociation, but so that any member or other person, before inspecting any suchregister or books, sign his name in a book kept for this purpose; but the Secretary shallnot, without the express authority of the Council, allow any other inspection of therecords, books or papers.

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16. All records, books and papers shall at all times be open to inspection of members of theCouncil.

Entrance and Transfer Fees and Annual Subscriptions

Entrance and Transfer Fees:

17. (a) Persons admitted as Fellows without first becoming Associates, shall pay onadmission the sum of Rs. 200 and Associates admitted as Fellows shall pay the sum of Rs. 100.

(b) Persons admitted as Associates shall pay on admission the sum of Rs.100.

(c) Persons admitted as Registered Students shall pay on admission the sum of Rs.25. In the case of a person who at the date of his election is an F. C. W. A. The feesmentioned in (a) and (b) above shall be halved. This concession will lapse on the31st of December, 1952.

(d) Person admitted as a General Member shall not be required to pay admissionfee.

18. The following annual subscription shall be paid by members: -

Subscription:

(a) Every Fellow shall pay an annual subscription of Rs.40, every Associate anannual subscription of Rs.20, every General Member an annual subscription ofRs.20 and every registered Student an annual subscription of Rs. 15 and the same shall be deemed to become due and payable on the first day of July in each year;except that in the first instance it shall be due and payable at the date of electionor admission provided that in the event of such member being admitted after 31st

December in any year, only half a year’s subscription shall be payable by suchmember in respect of that year. In the event of a Registered Student becoming an Associate or an Associate becoming a Fellow during the currency of any year forwhich annual subscription as a Registered Student or an Associate has beenpaid, he shall have credit for the sum so paid toward his subscription as anAssociate or Fellow.

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Compounding of Subscriptions:

(b) Member may compound for the payment of future annual subscriptions by thepayment of a specified sum, the amount of which shall be prescribed by theCouncil.

Members in Retirement:

(c) A member of not less than 55 years of age who has been a member for at least 15years, and who has, with a view to permanent retirement, retired fromprofessional work, or service or business and who shall have given the Councilproof of his age and retirement, shall pay half the appropriate normal annualsubscription so long as such retirement continues.

Forfeiture of Membership. Arrears of Subscription:

(d) Any member shall ipso facto cease to be a member in the event of his annualsubscription being in arrears for six months from the date of same becomingpayable, but shall, nevertheless, be liable to pay the amount of such year’ssubscription, and any other arrears of subscription due by him to the Instituteand shall be liable otherwise as a member. The Council shall have power inspecial cases to suspend the operation of this clause.

List of Members:

19. The Council shall publish from time to time a list of members, which shall also containthe regulations and the bye-laws for the time being in force and a list of members of theCouncil and officers and such other matters as the Council shall consider it expedient to publish therein, and copies may be sold at such price as the Council shall determine,but each member shall be entitled to a copy free of charge.

Officers:

20. There shall be the following officers of the Institute, namely, a President, a VicePresident, a Secretary, a Treasurer and a Council as hereinafter provided. Providedthat if the Council so desires, it can appoint another person to act as a second VicePresident for a period not exceeding 12 months from the date of such appointment.

The President, the Vice President, the Secretary and the Treasurer shall be honoraryofficers. There shall also be Solicitors, Bankers, Examiners and Auditors.

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Patrons:

21. In addition to the above, the Council may at their discretion invite suitable persons tobecome Patrons of the Institute.

Head Office and Branches:

22. The principal management and general superintendence of the business of the Institute shall be in Karachi and there may be such branches elsewhere in Pakistan as theCouncil may from time to time establish.

The Council:

23. The Council shall be deemed to be the Governing Body of the Institute and shall consistof:

(a) The 1st President of the Institute as long he is alive.


(c) Elected members, not exceeding 12 in number, of whom a minimum of 7 mustalways be Fellows of the Institute.

(d) Co-opted members, as hereinafter provided.

(e) Ex-Officio members, comprising the Chairmen of the Branch Councils, ashereinafter provided.

(f) Provided that the aggregate number of Ex-Officio and Co-opted members of theCouncil shall always be one less than the number of the elected members of theCouncil.

Election of the members of the Council shall take place at the Ordinary GeneralMeetings.

The Executive Committee:

24. The following officers shall be deemed to be the Executive Committee of the Council ofthe Institute: -

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(a) The 1st President of the Institute.


(c) The President, the Vice President, the Secretary and the Treasurer of theInstitute.

Co-opted Members of the Council:

25. The Council by a resolution passed by a majority of not less than three-fourths of themembers of the Council present and voting at a meeting of the Council, may co-opt tothe Council for special purposes a limited number of co-opted members, to hold officefor a period up to two years, but to be eligible for re-co-option if desired. Co-optedmembers need not be Fellows even members of the Institute. They may vote atmeetings as ordinary elected members but, in the capacity of co-opted members, shallnot be entitled to exercise any other rights of membership.

Branch Council:

26. There shall be Branch Councils for the management and general superintendence ofbranches of the Institute where such are established under Article 22 above.

The Branch Councils will be appointed by the Council in accordance with the Byelaws,Rules and Regulations as framed by the Council under Article 36(k)(9) hereunder.

Removal of Member from Council:

27. A member of the Council shall vacate office if requested to do so by a resolution of aGeneral Meeting of the Institute.

The second Vice President shall vacate office if a resolution to that effect has beenpassed by a majority of at least three-fourths of the members present and voting at aCouncil meeting, of which proper notice has been given to move such a resolution.

Absence from Council:

28. In the event of any member of the Council failing to attend three consecutive meetingsof the Council of which he has been duly notified, the Council may, unless his absence

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is caused by illness (or other circumstances which in the opinion of the Council justifyhis absence), resolve that he ceases to be a member of the Council.

Chairman:

29. At all meetings of the Council, the President shall be the Chairman. In the absence of the President, the elected Vice President shall preside. In the absence of both the secondVice President shall preside. In the absence of all three of them the Council shall elect aChairman from amongst the elected members present.

Quorum:

30. The Council may meet together for the dispatch of business, adjourn and otherwiseregulate their meetings as they think fit, and determine the quorum necessary for thetransaction of business. Unless otherwise determined by the Council, three electedmembers shall be a quorum. Questions arising at any meeting shall be decided by amajority of votes, each member having one vote and the voting being by show ofhands. In case of an equality of votes, the Chairman shall have a second or casting vote

Who may Call Meeting:

31. Council meeting shall at any time be called by the Secretary, at the request of thePresident or the Vice President or of three elected Members of the Council by giving atleast three days’ notice to the several members of the Council. A Member of theCouncil who is absent from Pakistan or who has not his address in Pakistan registeredin the books of the Institute, shall not be entitled to notice of a meeting.

Nomination of Honorary Officers:

32. The power of nomination of the President, the Vice President, the Secretary andTreasurer of the Institute shall be vested in the Council as hereinafter provided.

Nomination & Election of Honorary Officers:

33. At a meeting of the Council preceding the date of the Annual General Meeting in eachyear, the Council shall nominate a Fellow of the Institute to act as President, a Fellow toact as Vice President, a Fellow or Associate to act as Secretary, and a Fellow or Associate to act as Treasurer, and Fellow and Associates to act as members of the Council to hold

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office until the close of the Annual General Meeting in the following year. Suchnominations shall appear in Agenda and be submitted for election at the AnnualGeneral Meeting duly convened for the purpose.

A proposal for election of Fellows or Associates, other than those nominated by theCouncil, shall be notified to the Secretary, 7 days before the date of the OrdinaryGeneral Meeting and must be signed by atleast one-tenth of the Associate or Fellowmembers on the Register or ten such members, whichever is larger.

Terms of Office:

34. The President, Immediate Past President, Vice President, Secretary and Treasurer ofthe Institute shall continue in office only until the close of the next Annual GeneralMeeting, but shall be eligible for re-election.

The second Vice President appointed by the Council shall hold office for a period 12months, but shall be eligible for re-appointment by the Council.

First Council:

35. Notwithstanding the provisions herein-before contained, the first Council includingoffice bearers shall be elected by the signatories to the Memorandum of Association at a meeting to be convened by any such signatory, and the members of the Council soelected shall be deemed to be elected as Fellows of the Institute and such Council shallelect the officers at its first meeting and the Council and the officers so elected shall hold office until the 31st of December, 1955 or until a fresh Council and officers have beenelected in accordance with the provisions of these Articles, whichever is later.

Duties and Powers of the Council :

36. The Council shall, subject to the control of General Meetings (but not so as to renderinvalid any act done by the Council before the resolution of a General Meeting).Conduct and manage all the business and affairs of the Institute, exercise all thepowers, authorities and discretions of the Institute, obtain or oppose the application byothers for all concessions, grants, charters, and legislative acts and authorizations, from any Government or authority, enter into such contracts and the business of theInstitute, except only such of them as under the statutes and these presents areexpressly directed to be exercised by general meetings, and (without in any way

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rejudicing or limiting the extents of such general power), shall have the followingspecial powers and duties:

(a) They may bring before a General Meeting of the Institute any matter, which theyconsider material to the Institute, or its objects or interests as, defined in theMemorandum of Association, or which appear to them to affect the interests ofthe profession and make any recommendations in relation thereto.

(b) They may take cognizance of any matter, which may be brought before themaffecting the Institute, or the conduct of any of its member as affecting hisprofessional status or the reputation of the Institute.

(c) They may, subject to the conditions herein contained, appoint, remove orsuspend any of the members of any Committee or Committees, or theExaminers, Solicitors, or Bankers, and Officers, on such terms and conditions asthey shall think fit and agree on, and fix such securities (if any) as are to be takenfrom any of the officials of the Institute for the faithful discharge of their duties.

(d) In the case of the absence of the Secretary or of his inability to act, they may inlike manner appoint any person to act in his stead, any such person maytemporarily exercise all the duties of the Secretary, but the earliest opportunityshall be taken to report matter to an ordinary or extraordinary general meetingfor necessary directions.

(e) In case of a casual vacancy in the post of an officer or the Auditor, the Councilshall have the power to appoint another qualified person to that vacancy.

(f) They may appoint any member of the Institute to be an Advisor to the Council or to assist the Council as an advisory, executive, administrative or supervisory,officer with remuneration and upon such terms and with such powers as theCouncil may think fit, and the Council may from time to time revoke suchappointment and appoint another member to take such office.

(g) They may from time to time appoint any Committee, or any person or persons tobe the agent or representative of the Institute in any country or place, with suchpowers, upon such terms and on such remuneration as they shall think firm andmay from time to time remove any such Committee, agent or representative.

(h) (1) The Council may, from time to time delegate to any Committee or to anyagent, or representative, servant or officer, all or any of the powers and

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authorities of the Council and may from time to rime reconstitute or removesuch Committee agent or official.

(2) Any Committee may from time to time delegate to any Sub-Committee, or to any agent, or representative, servant, or officer, all or any of the powers andauthorities of such Committee, and may from time to time reconstitute orremove such Sub-Committee, agent or official.

(i) They may from time to time incur, agree, and pay any expenses in connectionwith the Institute’s objects and undertaking, including the expenses of theformation and carrying on of any other company, society or body, not being forthe purposes of trade or profit, promoted, founded or supported by the Institute, either wholly or partially, and may enter into any contracts for carrying out anyof the above objects.

(j) They may raise any loan or loans in such manner upon such security and suchterms as they shall think fit, and may issue any Debentures or Debenture Stock to secure the same and any Debentures may be made payable to bearer and mayhave coupons attached representing the interest payable in respect thereof.

(k) They may at any time make such Bye-Laws, Rules and Regulations as they mayjudge necessary for carrying on the business of the Institute, and may in likemanner annul or vary at any time any Bye-Laws, Rules or Regulations so made,and all Bye-Laws, and Regulations so made and for the time being in force shallbe binding on the Members and Students of the Institute and have full effectaccordingly, and, without prejudice to the generality of the above powers, it isexpressly declared that the following shall be deemed to be Bye-Laws, Rules and Regulations in relation to the Institute within the meaning of this Clause, that isto say, regulating as to:

1) The persons eligible for membership and studentship of the Institute andqualifications, restrictions, terms and conditions attached thereto.

2) Subscriptions and other fees payable by students.

3) Admission as Honorary Members of the Institute.

4) Rights and privileges of Members and students.

5) Suspension and termination of membership and studentship.

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6) Training and examination of candidates for membership and studentship.

7) Arrangements with any other Institute, Society or Association for affiliation, reciprocal concession or otherwise.

8) The nomination of a President, a Vice President, a Secretary, a Treasurer andthe Council of the Institute.

9) Branch or District or Local Councils and Local and other Representatives.

10) Provision for Students Societies.

11) A postal ballot for the purposes of election and the procedure in connectiontherewith.

12) The List of Members, Journal, Library, and Publications of papers andbooks.

(l) The Council may, subject to the Bye-Laws, Rules and Regulations for the timebeing in force, do all other things that they consider conducive to the interests orgood management of the Institute or the promotion of its objects.

Provided that no Bye-Laws, Rules or Regulations shall be made or any other actdone under this or any other Article which would amount to such an addition to, or alteration of the Articles of Association as could only legally be made bySpecial Resolution.

Vacation of Office:

37. The office of a member of the Council shall be vacated:-

(a) If a receiving order in bankruptcy is made against him or he makes anyarrangement or composition with his creditors.

(b) If he is found lunatic or becomes of unsound mind.

(c) If he is suspended for any period from membership of the Institute.

(d) If he becomes disqualified pursuant to Articles 27 and 28.

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(e) If by resolution of the Council he has been found guilty of dishonourable orunprofessional conduct or a breach of the Articles of Association or Byelaws, orof any act prejudicial to the interests of the Institute.

In the case of elected member only, if he ceases to be a member of the Institute. If bynotice in writing to the Institute he resigns his office.

The Seal

Use of Seal:

38. The seal shall be affixed in the presence of two members of the Council and theSecretary and or such other persons as the Council may appoint for the purpose. Thesaid members and the Secretary and or such other person as aforesaid shall sign everyinstrument to which the Seal of the Institute is so affixed.

General Meetings:

39. The Institute shall hold its Ordinary General Meeting in Karachi once in each Calendaryear, for the purpose of transacting the business of the Institute, the election of Counciland auditors for the following year, and for receiving the accounts of the last year withthe auditors’ certificate and report, and also a report from the Council on the past year’s transactions and accounts, as well as for the discussion of questions incidental to theprofession.

Business:

40. It shall be competent for members to tender to the Council written papers on suchquestions, and if the Council deem fit such papers may, after the conclusion of thegeneral business of the Institute, be read and discussed at such General Meetings.

Notice of Special Business:

41. Any member wishing to bring before the Ordinary General Meeting any motion notrelating to the business mentioned in Article 39, shall give notice of such motion to theCouncil not later than the 15th day of August and no such motion shall come before themeeting, unless such notice has been given, or unless the Council deem fit to dispensewith this rule in any particular case.

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Notice of Meetings:

42. The Secretary shall, at least 14 days before the Ordinary General Meeting, send to every member at his registered address, by post or otherwise, with the notice of the meeting,a printed copy of the annual report and of the audited account and balance sheet, and alist of the persons nominated for election as members of the Council or as auditors, andany motion of which notice has been given as mentioned in the last preceding article, toeach member at his registered address, mentioning the day, place, and hour of meeting, and in the case of Extraordinary General Meeting stating the purpose of the meeting,but the non-receipt of such notice by any member shall not invalidate the proceedingsat any meeting.

Extraordinary Meeting when Called:

43. An Extraordinary Meeting may, at any time, be called by the Council of its own accord,and shall be called by the Council whenever a requisition of any number of members,not less than one-tenth in number and stating fully the object of the meeting, and signed by the requisitionists is delivered to the Secretary or left at the office for the Council.The requisition may consist of several documents in like form, each signed by one ormore requisitions.

44. Whenever the Council neglect, for twenty one days after the delivery of any suchrequisition to call a meeting in accordance therewith, the requisitionists, or a majorityof them, may call the meeting, but any meeting so convened shall not be held after three months from the date of such delivery.

Notice of General Meetings:

45. The Council calling any General Meeting, and the members calling any ExtraordinaryGeneral Meeting, shall respectively give at least 14 days’ notice of the Meeting, but thenon-receipt of any notice by any member, whether by reason of his not having anyregistered place of address in Pakistan, or otherwise, shall nor invalidate theproceedings at any General Meeting.

Business of General Meeting:

46. No business shall be transacted at an Extraordinary General Meeting, own as has beenspecified in the notice convening it, and except in the case of an Ordinary Meeting, thematters specially in these presents mentioned.

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Proceedings at General Meetings:

47. At all meetings of the Institute the President of the Council for the time being, and in his absence, the elected Vice President of the Council, shall be the Chairman, and in theabsence of both, the Chairman shall be a member of the Council elected by the members of the Council present. In case no member of the Council shall be present or willing totake the chair, the Chairman shall be elected from among the members present.

Quorum at General Meetings:

48. At each Ordinary General Meeting, unless five members are present personally or byproxy, within half an hour after the time appointed for the meeting, the meeting shallstand adjourned for a fortnight, to be then held at the same time and place, and so fromtime to time until there shall be a sufficient number of members present personally orby proxy, when the meeting shall proceed to business. At each Extraordinary GeneralMeeting, unless five members are present personally or by proxy, within half an hourafter the time appointed for the meeting, the meeting shall be thereupon and therebydissolved.

Adjournment:

49. The Chairman of any meeting at which there is a quorum present may, with the consent of the meeting, adjourn the meeting from time to time and from place to place, but nobusiness shall be transacted at any adjourned meeting other than the business leftunfinished at the meeting from which the adjournment took place. No notice need begiven of any adjourned meeting unless it is so directed in the resolution foradjournment.

Members of Council:

50. At every General Meeting at which any member of Council retired from office, he shallremain in office until the dissolution of the meeting, when unless re-elected, he shallretire from office.

Minutes:

51. The first business at every General Meeting after the chair is taken shall be The readingof the minutes of the then last General Meeting; and if the minutes do not appear to themeeting to have been signed according to the statutes or these presents, they shall be on

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being found or made correct, be signed by the Chairman of the meeting at which theyare read.

Voting:

52 Subject to a poll being demanded as hereinafter mentioned, every question to bedecided by any General Meeting unless resolved on without a dissentient, and in case it shall not be otherwise laid down by the statutes, shall be decided by a simple majorityof the members personally present thereat, and qualified according to these present tovote, by way of show of hands.

Demand for Poll:

53. At any General Meeting (unless a poll on any resolution thereof be, Immediately on thedeclaration by the Chairman of the meeting of the result of the show of hands thereon,demanded by at least three members, and also before the dissolution or adjournment of the meeting, by a written requisition signed in person or by proxy by at least one-tenthof the members of the Institute for the time being, and delivered to the Chairman orSecretary) a declaration by the Chairman that a resolution is carried, and an entry tothat effect in the minutes of the proceedings of the meetings, shall be sufficient evidence of the fact so declared, without proof of number or proportion of the votes given for oragainst the resolution. The members demanding a poll may nominate three membersto act as scrutinizers on their behalf. Provided always that no poll shall be taken as tothe election of the Chairman, the appointment of scrutinizers, or the adjournment of ameeting, and, notwithstanding a demand for a poll, the meeting shall continue for thetransaction of other business in respect of which a poll has not been demanded.

54. On a poll being demanded the Chairman shall forthwith reduce into writing theresolution writing the resolution or amendments on which the poll is to be taken andvoting papers containing such resolution or amendments shall be issued by theCouncil within seven days after the meeting, and shall be returned so as to be receivedby the Council within 14 days after the meeting, and the results of the poll shall bedeemed the resolution of the General Meeting at which the poll was demanded.

Chairman to have Casting Vote:

55. In case of an equality of votes, the Chairman shall have a casting vote in addition to hisvote as a member.

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Voting at General Meetings

Votes of Members:

56. Every member being a Fellow or Associate or General Member of the Institute, shallhave one vote at every

General Meeting.

57. A member qualified to vote being personally present at any General Meeting maydecline to vote on any question thereat, but shall not, by so declining, be consideredabsent from the meeting; nor shall his presence invalidate any proxy duly given byhim, except as regards any question on which he may vote in person or on which he haspersonally declared at the meeting to be not voting.

Proxies:

58. A member entitled to vote may, from time to time appoint any other member as hisproxy in voting at any poll.

59. Every instrument of proxy shall be in writing, or according to the form, or following asnear thereto as circumstances will admit, and shall be signed by the appointer, anddeposited at the office at least seventy-two hours before the time for holding theGeneral Meeting or adjourned Meeting whereat it is to be acted on:-

“ I ( ), a Fellow or Associate or General Member of THE PAKISTANINSTITUTE OF INDUSTRIAL ACCOUNTANTS, hereby appoint ( ) or in hisabsence ( ) both members of the Institute, to act as my proxy at the GeneralMeeting of the Institute to be held on the day of 19 and every adjournmentthereof.

As witness my hand this day of 19 “

(Signed) …………………..

And every such instrument of proxy shall be duly stamped.

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Appendices

Members in Arrears:

60. No member shall be entitled to be present at or vote at any General Meeting, who is nota Fellow or Associate or General Member, or who is in arrears with any subscription or sum payable by him to the Institute.

Validity of Votes:

61. No objection shall be taken to the validity of any vote except at the meeting or poll atwhich such vote shall be tendered, and every vote not disallowed at such meeting orpoll shall be deemed valid. The Chairman of the meeting shall be the sole and absolutejudge of the validity of every vote tendered at any meeting or poll.

Powers of General Meeting

62. The Institute may, with the sanction of a General Meeting and subject to any conditionsimposed by the meeting from time to time, exercise any of the powers conferred by thestatutes on Companies limited by guarantee.

Removal of Auditor:

63. Any General Meeting, when notice in that behalf is given, may, through a Resolutionpassed by three-fourths of the votes given personally or by proxy, remove any auditorfor misconduct, negligence, or incapacity, and may, if necessary, direct the accounts ofthe Institute to be re-audited, and may, by a simple majority, supply any vacancy in theoffice of auditor, and fix the remuneration of the auditor.

Report and Accounts:

64. Any General Meeting, after notice, may elect one or more members of Council andauditors, and may receive, and either wholly or partially reject, or adopt and confirmthe accounts, balance sheets and reports of the Council and auditors respectively.

Minutes of General Meetings

Signed Minutes Deemed Correct:

65. Every entry in the minute book of the proceedings of General Meetings, purporting tobe entered and signed, according to the statues of these presents shall in the absence of

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proof to the contrary, be deemed to be a correct record, and an original proceeding ofthe Institute accordingly; and in every case the burden of proof of error shall be whollyon the person taking any objection to the entry.

Trustees

Appointment of Trustees

66. The Council may appoint any person or persons to be Trustee or Trustees for any of thepurposes of the Institute, as the Council may determine. Any such Trustee or Trusteesshall be appointed and may be removed by the Council and shall have powers andindemnities, and perform such duties, and be subject to such regulations as the Councilmay determine. Members of the Institute other than members of the Council may beappointed as Trustees.

Liabilities of Council Trustees And Officers

67. Subject to any limitations prescribed by the statutes, the members of the Council,Members of Committees, Trustees, Auditors, Secretary and Treasurer and otherofficers shall be indemnified by the Institute from all losses and expenses incurred bythem in or about the discharge of their respective duties, except such as arise from theirown respective willful act or willful default.

Liabilities - Application of Funds

68. No member of the Council or of a Committee, Trustee or Officer, shall be liable for anyother member of the Council or of such Committee. Trustee, or Officer, or for joining inany receipt or other act for conformity, or for any loss or expense happening to theInstitute to any other person arising out of the acts or proceedings of the Institute or theCouncil or any Committee, unless such loss or expense arises from his own willful actor willful default.

Financial

69. The funds of the Institute shall, subject to the provisions of the Memorandum ofAssociation, be applied in the first place in defraying current expenses, and subjectthereto shall be applicable in or towards the acquisition by purchase, lease ofotherwise, and furnishing and maintenance of suitable premises for the use of Institute, and for such other purposes as the Council shall from time to time think expedient,

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with a view to the promotion of the objects of the Institute or any of them. Theadministration of the funds shall be under the direction of the Council.

Signing of Cheques etc:

70. No person, except the Council and Committees, and persons duly authorized by themand acting within the limits of the authority so conferred, shall have authority to givereceipts for money or otherwise, or to sign any cheque or to enter into any contract, soas thereby to impose any liability on the Institute, or otherwise to pledge the credit ofthe Institute.

Payment by Cash:

71. No payment exceeding Rs. 100 in amount shall be made in cash. Provided that theCouncil may authorize that certain payment exceeding Rs.100 may be made in cash.

Accounts Audited Approved:

72. Every account of the Council, when audited and approved by a General Meeting, shallbe conclusive except as regards any errors discovered therein within three months nextafter the approval thereof. Errors discovered within that period shall be forthwithcorrected, and subject to such correction every account of the Council shall at the end of such period be conclusive.

Reserve Fund:

73. The Council may, out of the money of the Institute by way of Reserve Fund, from timeto time reserve or set apart such sums as in their judgment are necessary or expedient,to be applied at the discretion of the Council in providing against losses on leasehold orother property subject to depreciation, or to meet claims on or liabilities of the Institute,or for any other purposes of the Institute.

Investments:

74. All money carried to the Reserve Fund, and all other money of the Institute notimmediately required for any payment to be made by the Institute, may be invested bythe Council in such manner as the Council may from time to time think proper, in anyform of investment for the time being authorized for the investment of trust funds, and

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the Council may from time to tome vary or realize such investments as they deemexpedient.

Investment in name of Trustees:

75. In any case where the Council thinks fit, investments may be made in the name of aTrustee or Trustees instead of in the name of the Institute. Any corporate body may actas such Trustees.

Accounts:

76. The accounts of any trustee or other officer may be settled and allowed, or disallowed,either wholly or in part, by the Council. A Trustee or other officer becoming bankruptor compounding with his creditors, or if a member, being found guilty ofdishonourable or unprofessional conduct or a breach of the Articles of Association orbye-laws shall, ipso facto, be disqualified from acting as, and shall cease to be, a Trusteeor other officer. Provided that until an entry of the disqualification be made in theminutes of the Council, his acts in his office shall be as effectual as is his disqualificationhad not occurred.

Accounts to be Kept:

77. The Council shall cause true accounts to be kept of the assets and liabilities of theInstitute, and of the sums of money received and expended by the Institute, and themanner in respect of which the receipt and expenditure takes place.

Custody of Books of Accounts:

78. The books of account shall be kept at the registered office of the Institute or at suchother place or places as the Council shall think fit.

Annual Accounts and Reports:

79. Once at least in every calendar year the Council shall lay before the Institute in GeneralMeeting, a statement of income and expenditure, balance sheet, and a report of theCouncil as to the affairs of the Institute generally, and a printed copy of such statement,balance sheet and report shall, 14 days before the meeting be served, on the Members in the manner hereinafter prescribed.

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Audit

Appointment of Auditors:

80. Auditors shall be appointed and their duties regulated in accordance with therequirements of the Statutes.

Notices

Notice to Members:

81. All notices required by these presents or the statutes to be given to the members shall,unless personally served, be given to the members having addresses registered as theirplace of address in Pakistan by sending letters to such addresses. Members not havinga place of address registered in Pakistan will not be entitled to receive any notices.

Signature of Notices:

82. All notices sent in pursuance of the preceding Article shall be signed by or have printedat the foot thereof, the name of the Secretary or such other person in his place as theCouncil shall appoint, except in the case of a meeting convened by Members inaccordance with these presents, and in that case shall be signed by or have printed atthe foot, the name of the members convening same, or a majority of them.

Notice by Post:

83. Any such notice sent through the post to the address in the register of members of anysuch member of the Institute, shall be deemed to have been served on him on the fourth day after the letter containing the same was ousted, and in proving such service, it shallbe sufficient to prove that such letter was properly addressed and put in the post office

Amendments to the Articles:

84 These articles may be amended by a General Meeting, especially called for the purposeunder Article 43 hereof, giving a minimum of 21 days’ notice of the amendmentsproposed. An amendment will require a three-fourths majority of the memberspresent in person or by proxy except that any amendment to Article 23 and 35 andArticle 36(m) and to this Article must be carried unanimously.

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Appendex C

Cost and Management Accountants Act*Act No. XIV of 1966

An Act to make provision for the regulation of the profession of Cost and 1[Management]Accountants.

WHEREAS it is expedient to make provision for the regulation of the profession of Cost and1[Management] Accountants and for that purpose to establish an Institute of Cost and1[Management] Accountants;

AND WHEREAS the national interest of Pakistan in relation to the achievement ofuniformity within the meaning of clause (2) of Article 131 of the Constitution requires centrallegislation in the matter;

It is hereby enacted as follows:

Chapter IPreliminary

1. Short title, extent and commencement:-

(1) This Act may be called the 2[Cost and Management Accountants Act, 1966].

(2) It extends to the whole of Pakistan.

(3) It shall come into force on such date as the Federal Government may, bynotification in the official Gazette, appoint in this behalf.

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Appendices

*This Act of National Assembly received the assent of the President on 14-7-1966 and published for generalinformation in the Gazette for Pakistan at Rawalpindi dated the July 19, 1966 and this Act was further amendedunder National Assembly Bill No.22 of 1976 as published in the Gazette of Pakistan at Islamabad, the November 1,1976.1. Substituted by Cost and Industrial Accountants (Amendment) Act, 1976 Section 2, for the words “Industrial”.2. Substituted by Cost and Industrial Accountants (Amendment) Act, 1976, Section 3, for the words “Cost and

Industrial Accountants Act 1966”.

Definitions: -

(1) In this Act, unless there is anything repugnant in the subject or context:-

(a) “associate” means an associate member of the Institute; 1[(aa)] Cost andManagement Accountant means a person who is an associate or a fellowmember of the Institute;]

(b) “Council” means the Council of the Institute:

(c) “dissolved company” means the company registered under the Companies Act,1913 (VII of 1913) as the Pakistan Institute of Industrial Accountants;

(d) “fellow” means a fellow member of the Institute;

(e) 2[Omitted].

(f) “Institute” means the 3[Institute of Cost and Management Accountants ofPakistan] constituted under this Act;

(a) “prescribed” means prescribed by regulations made under this Act;

(h) “President” means the President of the Council;

(i) “Register” means the Register of members of the Institute maintained under thisAct;

(j) “Vice-President” means the Vice-President of the Council;

(k) “year” means the financial year.

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1. Inserted by Cost and Industrial Accountants (Amendment) Act, 1976 Section 4, Sub-section (a) (i).2. Omitted by Cost & Industrial Accountants (Amendment) Act, 1976 Section 4, Clause (ii) of Sub- section (a).3. Substituted by Cost & Industrial Accountants (Amendment) Act; 1976, Section 4, Clause (iii) of Sub- Section

(a) for the words “Pakistan Institute of Industrial Accountants”.

(2) Save as otherwise provided in this Act, a member of the Institute shall be deemed “to be in practice” when, individually or in partnership with one or more members of theInstitute in practice, be in consideration of remuneration received or to be received:

(a) engages himself in the practice of Cost and 1[Management] Accounting; or

(b) offers to perform services involving the costing or pricing of goods or services orthe preparation, verification or certification of cost accounting and relatedstatements, or holds himself out to the public as a Cost and 1[Management]Accountant; or

(c) renders professional service or assistance in or about matter of principles, ordetails relating to the Cost and [Management] Accounting procedures, or therecording, presentation or the certification of costing facts or data; or

(d) renders such other services as, in the opinion of the Council, are or may berendered by a 2[Cost and Management] Accountant;

and the expression “to be in practice”, with its grammatical variations and cognateexpressions, shall be construed accordingly.

Explanation. ____ A member of the Institute who is a whole-time salaried employee ofany person, shall not be deemed “ to be in practice” within the meaning of this sub-section.

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Appendices

1. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976 Clause (i) of Sub-section (b) of Section4 for the word “Industrial”.

2. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976, Clause (ii) of Sub-section (b) of Section 4 for the words “an Industrial” with the words “Cost & Management”.

Chapter II[Institute of Cost and Management Accountants of Pakistan] 1

3. Incorporation of the Institute._____

(1) All persons whose names are entered in the Register at the commencement ofthis Act, and all persons who may hereafter have their names entered in theRegister under the provisions of this Act, so long as they continue to have theirnames borne on the said Register, are hereby constituted a body corporate by the name of 2[Institute of Cost and Management Accountants of Pakistan] and allsuch persons shall be known as members of the Institute.

(2) The Institute shall have perpetual succession and a common seal, and shall havepower to acquire, hold and dispose of property, both movable and immovable,and shall by its name sue or be sued.

4. Entry of names in the Register.______

(1) The following persons shall be entitled to have their names entered in theRegister, namely:-

(a) any person who was, immediately before the commencement of this Act, afellow or associate of the dissolved company;

(b) any person who has passed such examination and completed such training,as may be prescribed for membership of the Institute.

(c) any person who has passed such other examination and completed suchother training outside Pakistan.

As it is recognised by the Federal Government, or by the Council with theapproval of the Federal Government, as being equivalent to the examination and training prescribed for membership of the Institute and, in case he is notpermanently residing in Pakistan, fulfils such other conditions as the FederalGovernment, or the Council with the approval of the Federal Government, as the case may be, may deem fit to impose;

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1. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976, Section 5, for the heading. “PakistanInstitute of Industrial Accountants.”

2. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976 Section 6, for the words “PakistanInstitute of Industrial Accountants”.

(d) any person domiciled in Pakistan, who is, at the commencement of this Act,whether within or outside Pakistan,

(i) studying for any foreign examination and also undergoing training andpasses such examination and completes such training within three years ofsuch commencement, or;

(ii) undergoing training, having passed any such foreign examination, andcompletes such training within the said period,

if such foreign examination and training are recognised by the Federal Government, orby the Council with the approval of Federal Government, as being equivalent to theexamination and training prescribed for membership of the Institute.

(2) The Council shall, as early as possible, take such steps as may be necessary forhaving the names of all such persons as are mentioned in clause (a) of Sub-section (1) entered in the Register without any application being made in thatbehalf or the payment of any fee and the name of every such person so entered,shall be deemed to have been entered at the commencement of this Act for thepurpose of Sub-section (1) of Section 3.

(3) Every person belonging to any of the classes mentioned in clauses (b), (c) and (d)of Sub-section (1) may have his name entered in the Register on an applicationmade to, and granted by the Council in the prescribed manner and on paymentof the prescribed fee.

5. Associates and Fellows:-(1) Save as otherwise provided in the Act, the members of the Institute shall be

divided into two classes designated as fellows and associates.

(2) A person, other than a person mentioned in Sub-section (3), shall, on his namebeing entered in the Register, be an associate and , so long as his name remains so entered, shall be entitled to use the letters 1[A.C.M.A.] after his name to indicatethat he is an associate of the Institute.

(3) The name of a person who was, immediately before the commencement of thisAct, a fellow of the dissolved company shall be entered in the Register as a fellow of the Institute and such person, so long as his name remains so entered, shall beentitled to use the letters 2[F.C.M.A.] after his name to indicate that he is a fellowof the Institute.

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Appendices

1. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976 Clause (a) of Section 7 for the words“A.P.I.A”.

2. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976 Clause (b) of Section 7 for the words“F.P.I.A”.

(4) A person who has been an associate for a continuous period of not less than fiveyears, and who possesses such qualifications as the Council may prescribe, mayapply to the Council for admission as fellow; and if the Council grants hisapplication, his name shall be entered in the Register as a fellow.

Explanation.:______ In computing the continuous period during which a person hasbeen an associate of the Institute, there shall be included any continuous period duringwhich he has been an associate of the dissolved company immediately before hebecame an associate of the Institute.

(5) The decision of the Council on an application under Sub-section (4) shall be final.

6. Certificate of Practice.:-

(1) No member of the Institute shall be entitled to practise within Pakistan, unlesshe holds a certificate of practice granted by the Council.

(2) The Council may grant a certificate of practice to a member of the Institute whoapplies in the prescribed form and pays the prescribed annual fee for suchcertificate.

(3) Every member holding a certificate shall pay the annual fee for every year,which shall be due on the first day of July of that year.

(4) A certificate of practice shall be liable to be cancelled for default in payment ofthe annual fee for any year.

7. Members to be known as 1[Cost and Management Accountants]:–

(1) Every member of the Institute in practice shall, and every other member may,use the designation of 2[Cost and Management Accountant].

(2) No member of the Institute in practice using the designation of 3[Cost andManagement Accountant] shall use, whether in addition thereto or insubstitution, therefor any other costing designation:

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Appendices

1. Substituted By Cost & Industrial Accountants (Amendment) Act, 1976, Clause (a), Section 8, for the words“Industrial Accountants”.

2. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976, Clause (b), Section 8, for the words“Industrial Accountant”.

3. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976, Clause (c) (i), Section 8, for the words“Industrial Accountant”.

Provided that nothing in this sub-section shall be deemed to prohibit any such memberfrom adding any other description or designatory letters to his name, if entitled thereto, to indicate membership of such other institute of accountancy whether in Pakistan orelsewhere, as may be recognised by the Council in this behalf, or any other qualification that he may possess, or to prohibit a firm, all the partners of which are members of theInstitute in practice, from being known by its firm name as 1[Cost and ManagementAccountants].

8. Disabilities.:-

Notwithstanding anything contained in Section 4, a person shall not be entitled to havehis name entered in or borne on the Register if he—

(i) has not attained the age of twenty-one years at the time of his application for theentry of his name in the Register; or

(ii) is of unsound mind and stands so adjudged by a competent court; or

(iii) is an undischarged insolvent; or

(iv) having been discharged of insolvency, has not obtained from the court acertificate stating that his insolvency was caused by misconduct on his part; or

(v) has been convicted by a competent court, whether within or outside Pakistan ofan offence involving moral turpitude and punishable with 1[ ] imprisonment, or of an offence, not of a technical nature, committed by him in his professionalcapacity, unless in respect of the offence committed he has either been granted apardon, or, on an application made by him in this behalf, the FederalGovernment has, by an order in writing, removed the disability; or

(vi) has been removed from the membership of the Institute, on being found oninquiry to have been guilty of professional or other misconduct:

Provided that a person who has been removed from membership for a specified period, shall not be entitled to have his name entered in the Register until the expiry of suchperiod.

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Appendices

1. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976, Clause (c) (ii), Section 8, for the words“Industrial Accountants”.

2. The words ‘ Transportation or’ omitted by Cost & Industrial Accountants (Amendment) Act 1976, Section 9.

Chapter IIICouncil of Institute

9. Constitution of the Council:-

(1) There shall be a Council of the Institute for the management of the affairs of theInstitute and for discharging the functions assigned to it under this Act.

(2) The First Council shall be composed of such of the members of the Council of thedissolved company, as are entitled to have their names entered in the Register asfellow; and every other Council shall be composed of the following members,namely:-

(a) the first President of the dissolved company:

(b) not more than eight persons elected by members of the Institute, fromamongst the fellows of the Institute; and

(c) not more than four persons nominated by the Federal Government.

10. Election of the Council:—

(1) Election of the members of the Council, mentioned in clause (b) of Sub-section(2) of Section 9, shall be held at the annual general meeting of the Institute in such manner as may be prescribed.

(2) Where any dispute arises regarding any such election, it shall be referred by theCouncil to a Tribunal appointed by the Federal Government in this behalf andthe decision of such Tribunal shall be final:

Provided that no such reference shall be made except on an application made to theCouncil by an aggrieved party, supported by at least five members of the Institute, who attended the election, within thirty days from the date of the declaration of the result ofthe election.

(3) The expenses of the Tribunal shall be borne by the Institute or by the aggrievedparty as may be ordered by the Tribunal.

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Appendices

(4) If the members of the Institute fail to elect any of the members of the Councilmentioned in clause (b) of sub-section (2) of section 9, the Federal Governmentmay nominate any person duly qualified for the purpose to fill the vacancy, andthe person so nominated shall be deemed to have been duly elected under thatclause.

11. President, Vice-President, Secretary and Treasurer:-

(1) The Council shall, at its first meeting elect from amongst its members thefollowing honorary office bearers, namely:-

(a) a President;(b) a Vice-President;(c) a Secretary, and(d) a Treasurer.

(2) If the Council fails to elect any of the honorary office bearers within one month of the election of its members mentioned in clause (b) of sub-section (2) of section 9, thefederal Government may appoint, from amongst the members of the Council,any person duly qualified for the purpose to fill the vacancy and the person soappointed, shall be deemed to have been duly elected by the Council on the dateof such appointment.

(3) The President shall be the Chief Executive authority of the Council.

(4) Save as provided in sub-section (5), the President and other office bearers shall,subject to their continuance as members of the Council, hold their.Respectiveoffices from the date on which they are elected or deemed to have been electeduntil the expiry of the duration of the Council.

(5) Notwithstanding the expiry of their term of office under sub-section (4), thePresident and other office bearers shall continue to perform their functions untiltheir successors are elected by the new Council.

(6) Where the President or any other office bearer resigns from his office or ceases tobe a member of the Council, the Council shall elect from amongst its members anew President or other office bearers, as the case may be.

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(7) If the Council fails to elect a new President or office bearer as provided in sub-section (6), the Federal Government may appoint, from amongst the members ofthe Council, any person to fill the vacancy and the person so appointed, shall bedeemed to have been duly elected by the Council on the date of suchappointment.

12. Registration of membership and casual vacancies:-

(1) Any member of the Council may at any time resign his membership by writingunder his hand addressed to the President, and the seat of such member shallbecome vacant when such resignation is notified in the official Gazette.

(2) A member of the Council shall be deemed to have vacated his seat, if he isdeclared by the Council to have been absent without sufficient excuse from three consecutive meetings of the Council, or if his name is, for any cause, removefrom the Register under the provisions of Section 20.

(3) A casual vacancy in the Council may be filled by nomination by the FederalGovernment, and the person nominated to fill the vacancy, shall hold office until the expiry of the duration of the Council.

(4) No act done by the Council shall be called in question on the ground merely ofthe existence of any vacancy in, or defect in the constitution of the Council.

13. Duration and dissolution of Council:-

(1) The duration of a Council shall be three years from the date of its first meeting,on the expiry of which a new Council shall be constituted in accordance with theprovisions of this Act.

(2) A Council shall, notwithstanding the expiry of its duration under sub-section (1)continue to perform its function until a new Council is constituted, whereuponthe Council so functioning shall stand dissolved.

14. Functions of the Council:-

(1) The Council shall exercise such powers and perform such functions as may benecessary to carry out the purpose of this Act.

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(2) In particular, and without prejudice to the generality of the foregoing provision,the powers and functions of the Council shall include:-

(a) the examination of candidates for membership of the Institute and theprescribing of fees for such examination;

(b) the registration and training of students;

(c) the prescribing of qualifications for entry of persons as members of theInstitute;

(d) the recognition of foreign qualifications and training or experience forpurposes of membership of the Institute;

(e) the refusal, granting and cancellation of certificates of practice;

(f) the maintenance of the Register and publication of the list of members of theInstitute and also the names of the members who hold certificates ofpractice;

(g) the levy and collection of fees from members, students examinees and otherpersons;

(h the removal of names from the Register, and restoration to the Register ofnames which have been removed;

(i) the regulation and maintenance of the status and standard of professionalqualifications of the members of the Institute;

(j) the carrying out, by financial assistance to persons other than members ofthe Council or in any other manner, of research in Cost and 1[Management]Accounting;

(k) the maintenance of libraries and publication of books and periodicalsrelating to Cost and 1[Management] Accounting and allied subjects;

(l) the exercise of such disciplinary powers over the members and servants ofthe Institute as may be prescribed; and

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Appendices

1. Substituted by Cost & Industrial Accountants (Amendment) Act. 1976, Section for the word “Industrial”.

(m) the exercise of such other powers and the performance of such otherfunctions as are required to be, or may be, exercised or performed by theCouncil under this Act or Regulations made thereunder.

15. Staff remuneration and allowances:-

(1) For the efficient performance of its functions, the Council may:-

(a) appoint such officers and servants as it may consider necessary;

(b) require and take from employees of the Institute such security for the dueperformance of their duties as it may consider necessary;

(c) fix the salaries, fees, allowances and other conditions of service of theInstitute; and

(d) with the previous sanction of the Federal Government fix the allowances ofthe President, the Vice-President, the Secretary, the Treasurer and othermembers of the Council and its Committees.

16. Committees of the Council:-

(1) The Council shall constitute the following Standing Committees, namely:-

(a) an Executive Committee;(b) an Education Committee;(c) an Examination Committee and(d) a Disciplinary Committee.

(2) The Council may also constitute such other Committees as it deems necessaryfor the purpose of carrying out the provisions of this Act.

(3) The Executive Committee shall consist of the President, the Vice-President andthree other members nominated by the Council from amongst its members.

(4) The Education Committee shall consist of the President and such other members nominated by the Council from amongst its members as may be prescribed.

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(5) The Examination Committee shall consist of the President, or the Vice-President, as the Council may decide, and such other members, nominated by the Councilfrom amongst its members as may be prescribed.

(6) The Disciplinary Committee shall consist of the President and two othermembers of the Council, one of whom shall be nominated by the FederalGovernment and the other by the Council.

(7) Every other Committee shall consist of such members as the Council maydecide.

(8) The President shall be the Chairman of every Committee, of which he is amember and in his absence, the Vice-President, if he is a member of theCommittee, shall be the Chairman.

(9) The Standing Committee shall perform such functions as may be prescribed andthe other Committee, shall perform such functions as the Council may direct.

17. Branch Councils:-

(1) For the purpose of advising and assisting it in the discharge of its functions, theCouncil may constitute one or more Branch Councils as and when it considersnecessary.

(2) A Branch Council shall be constituted in such manner and perform suchfunctions as may be prescribed.

(3) The Council may, at any time, dissolve any Branch Council constituted underSub-section (1).

18. Finances of the Council:-

(1) There shall be established a fund under the management and control of theCouncil, into which shall be paid all moneys received by the Council. and out ofwhich shall be met all expenses and liabilities properly incurred by the Council.

(2) The Council may invest any money for the time being standing to the credit ofthe fund in any government security or in any other security approved by theCouncil.

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(3) The Council shall cause maintenance of proper accounts of the fundsdistinguishing capital from revenue.

(4) The annual accounts of the Institute shall be subject to audit by charteredaccountant within the meaning of the Chartered Accountants Ordinance, 1961(X of 1961).

Provided that no member of the Council or person who is in partnership with suchmember, shall be eligible for appointment as an auditor under this sub-section.

(5) As soon as may be practicable after the close of each year, but not later than thethirtieth day of November next following, the Council shall cause to bepublished a copy of the audited accounts and the report of the Council for thatyear, and copies of the said accounts and report shall be forwarded to the Federal Government and to all the members of the Institute.

(6) The Council may borrow from a scheduled bank as defined in the State Bank ofPakistan Act, 1956 (XXXIII of 1956) or from the Federal Government:-

(a) any money required for meeting its liability on capital account on thesecurity of the funds or on the security of any other assets for the time beingbelonging to it; or

(b) for the purpose of meeting current liabilities by way of temporary loans oroverdraft pending the receipt of income.

Chapter IVRegister of Members

19. Register:-

(1) The Council shall maintain in the prescribed manner a Register of the membersof the Institute.

(2) The Register shall include the following particulars about every member of theInstitute namely:-

(a) his full name, date of birth, domicile, residential and professional addresses;

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(b) the date on which his name is entered in the Register;

(c) his qualifications;

(d) whether he holds a certificate of practice; and

(e) such other particulars as may be prescribed.

(3) The Council shall cause to be published in such manner as may be prescribed, alist of members of the Institute as on the first day of July of each year, and a copyof the list shall be sent to every member of the Institute.

(4) Every member of the Institute shall, on his name being entered in the Register,pay such annual membership fee as may be prescribed and different fees may beprescribed for Associates and for Fellows.

20. Removal of name from the Register:-

(1) The Council may remove from the Register the name of any member of theInstitute:-

(a) who is dead; or

(b) from whom a request has been received to that effect, or

(c) who has not paid any prescribed fee payable by him; or

(e) who is found to have been subject, at the time when his name was entered inthe Register, or who at any time thereafter, has become subject, to any of thedisabilities mentioned in Section 8, or who for any other reason, has ceasedto be entitled to have his name borne on the Register.

(2) The Council shall remove from the Register the name of any member, who is notentitled to remain a member under this Act.

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Chapter VPenalties

21. Penalty for falsely claiming to be a member, etc:-

A person shall, without prejudice to his liabilities to any disciplinary measureprescribed under Section 34, be punishable on first conviction, with fine which mayextend to one thousand rupees, and on any subsequent conviction with imprisonmentwhich may extend to six months, or with fine which may extend to five thousandrupees, or with both if he—

(1) not being a member of the Institute, represents that he is a member of theInstitute, or uses the designation of Cost and 1[Management] Accountant or theletters 1[A.C.M.A., F.C.M.A.]; or

(2) being a member of the Institute but not having a certificate of practice, presentsthat he is in practice, or practises as a 2[Cost and Management Accountant], orworks accountant or in some similar profession in the field of Cost and3[Management Accounting].

22. Penalty for using the name of the Council etc:-

(1) Save as otherwise provided in this Act, no person shall—

(a) use any name or common seal which is identical with the name or thecommon seal of the Institute or so nearly resembles it as to deceive or as belikely to deceive the public; or

(b) grant or confer any degree, diploma, certificate or designation whichindicates or purports to indicate the possession or attainment of anyqualification or competence in Cost and 1[Management] Accounting similarto that of a member of the Institute.

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1. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976. Section 11, Clause (a) for the words,letters + comma ‘Industrial Accountants and the letters A.P.I.A., F.P.I.A.

2. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976. Section 11, Clause (b) (i) for the words“an Industrial Accountant”.

3. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976. Section clause (b) 1976. Section 11,Clause (b) (ii) for the words ‘Industrial Accounting’.

(2) Any person contravening the provisions of sub-section (1) shall, withoutprejudice to any other proceedings which may be taken against him, bepunishable, on first conviction, with fine which may extend to one thousandrupees, and on any subsequent conviction, with imprisonment which mayextend to six months or with fine which may extend to five thousand rupees orwith both.

(3) Nothing contained in this Section shall apply to any University established bythe law or to any institution affiliated thereto.

(4) If the Federal Government is satisfied that any diploma, certificate ordesignation granted or conferred by any person other than the Institute, whichpurports to be a qualification in Cost or 1[Management] Accounting, but whichin the opinion of the Federal Government falls short of the standard ofqualifications prescribed for Cost or 1[Management] Accountants, and does notin fact indicate or purport to indicate the possession or attainment of anyqualifications or competence in Cost or 1[Management] accounting similar to ofa Member of the Institute, it may, by notification in official Gazette and subject to such conditions as it may think fit to impose, declare that this section shall notapply to such diploma, certificate or designation.

23. Companies not to engage in 2[Cost and Management]Accountancy in Pakistan:-

(1) No company, whether incorporated in Pakistan or elsewhere, shall practice asCost and 3[Management] Accountants in Pakistan.

(2) If any company contravenes the provisions of sub-section (1) then, withoutprejudice to any other proceedings which may be taken against the company,every director, manager, secretary and other officer of such company, who isknowingly a party to such contravention, shall be punishable with fine whichmay extend, on first conviction, to one thousand rupees and, on any subsequentconviction, to five thousand rupees.

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1. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976. Section 12, for the word “Industrial”wherever occurring.

2. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976. Section 13, Clause (a) for the word“Industrial”.

3. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976. Section 13, Clause (b) for the words‘Industrial Accountants’.

24. Unqualified persons not to Sign Documents:-

(1) No person, other than a member of the Institute, shall sign any document onbehalf of 1[a Cost and Management Accountant] or a firm of 2[Cost andManagement Accountants] in his or its professional capacity.

(2) Any person contravening the provisions of sub-section (1) shall be punishablewith fine which may extend, on first conviction, to one thousand rupees and, onany subsequent conviction to five thousand rupees.

25. Offences by Companies:-

(1) If the person committing an offence under this Act is a company, the company as well as every person incharge of, and responsible to, the company for theconduct of its business at the time of the commission of the offence, shall bedeemed to be guilty of the offence, and shall be liable to be proceeded againstand punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liableto any punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence underthis Act has been committed by a company, and it is proved that the offence hasbeen committed with the consent or connivance of, or that the commission of theoffence is attributable to any neglect on the part of, any director, manager,secretary or other officer of the company, such director, manger, secretary orother officer shall also be deemed to be guilty of that offence, and shall be liableto be proceeded against and punished accordingly.

Explanation – for the purpose of this Section:-

(a) ‘company’ with respect to an offence under Section 21 or Section 24 meansany body corporate and includes a firm or other association of individualsand with respect to an offence under Section 23, a body corporate; and

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1. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976. Section 14, Clause (a) for the words‘Industrial Accountants’.

2. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976. Section 14, Clause (b) for the words‘Industrial Accountants’.

(b) ‘director’ in relation to a firm means a partner in the firm.

26. Sanction to Prosecute:-

No person shall be prosecuted under this Act except on a complaint made by or underthe order of the Council or of the Federal Government.

Chapter VIDissolution of The Existing

Institute of Industrial Accountants

27. Dissolution of the Institute registered under the Companies Act, 1913:-

on the commencement of this Act,—

(1) the company registered under the Companies Act, 1913 (VII of 1913) as thePakistan Institute of Industrial Accountants, shall stand dissolved and thereafter no person shall make, assert or take any claims, demands, or proceedingsagainst the dissolved company or against any officer thereof in his capacity assuch officer, except in so far as may be necessary, for enforcing the provisions ofthis Act;

(2) the right of every member, to or in respect of the dissolved company shall beextinguished, and thereafter no member of that company shall make, assert ortake any claims or demands or proceedings in respect of that company except asprovided in this Act.

28. Assets and liabilities of the dissolved company:-

(1) On the commencement of this Act, there shall be transferred to, and vested in the Institute, all the assets and liabilities of the dissolved company.

(2) The assets of the dissolved company shall be deemed to include all rights andpowers, and all property, whether movable, or immovable, of the company,including, in particular cash balance, reserve funds, investment deposits and allother interests and rights in or arising out of such property, as may be in thepossession of the dissolved company; and all books of accounts or documents, of

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the dissolved company shall be deemed to include all debts, liabilities andobligations of whatever kind of that company existing immediately before thecommencement of this Act.

(3) All contracts, debts, bonds, agreements and other instruments of whatevernature, to which the dissolved company is a party, subsisting or having effectimmediately before the commencement of this Act, shall have full force andeffect against or in favour of the Institute, as the case may be, and may beenforced as fully and effectively as if, instead of the dissolved company, theInstitute had been a party thereto.

(4) If, on the commencement of this Act, any suit, appeal or other legal proceedingsof whatsoever nature by or against the dissolved company is pending, the sameshall not abate, be discontinued or be in any way prejudicially affected, byreason of the transfer to the Institute of the assets and liabilities of the dissolvedcompany or of anything contained in this Act, but the suit, appeal or otherproceedings may be continued, prosecuted and enforced by or against theInstitute, in the same manner and to the same extent as it would have beencontinued, prosecuted and enforced by or against the dissolved company if thisAct had not been passed.

29. Employees of the dissolved:-

(1) Every person employed in dissolved company immediately before thecommencement of this Act shall, as from such commencement become anemployee of the Institute and shall hold his office or service therein upon thesame terms and conditions and with the same rights and privilege as to pensionand gratuity, as would have applied to him in his office or service under thedissolved company if this Act had not been passed, and shall continue to do sountil his employment in the Institute is terminated or his remuneration or otherterms and conditions of employment are duly altered by the Institute.

(2) Notwithstanding anything contained in any law for the time being in force, or inany contract, the transfer of the services of any employee of the dissolvedcompany to the Institute, shall not entitle any such employee to anycompensation under such law or contract, and no such claim shall be entertained by any court, tribunal or authority.

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Chapter VIIMiscellaneous

30. Alteration in the Register and cancellation of certificate: -

(1) Where an order is made under this Act reprimanding a member of the Institute,a record of the punishment shall be entered against his name in the Register.

(2) Where the name of any member is removed from the Register, the certificate ofmembership and the certificate of practice, if any granted to him shall be recalled and cancelled.

31. Protection of action taken in Good Faith:-

No suit, prosecution or other legal proceedings shall lie against the FederalGovernment or the Council, in respect of anything which is in good faith done orintended to be done in pursuance of this Act or of any regulation or order madethereunder.

32. Maintenance of Branch Offices: -

(1) Where a 1[Cost and Management Accountant] or a firm of 2[Cost andManagement Accountants] has more than one offices in Pakistan, each one ofsuch office shall be in the separate charge of a member of the Institute;

Provided that the Council may, in suitable cases, exempt any 3[Cost and ManagementAccountant] or a firm of 2[Cost and Management Accountants] from the operation ofthis sub-section.

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1. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976. Section 15, Clause (a) (i) for the words“an Industrial Accountant”.

2. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976. Section 15, Clause (a) (ii) for the words “ Industrial Accountants”.

3. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976. Section 15, Clause (a) (iii) for thewords “ Industrial Accountant”.

(2) Every 4[Cost and Management Accountant] in practice or firm of suchaccountants maintaining more than one offices shall send to the Council a list ofoffices together with the names of the persons in charge thereof, and shall keepthe Council informed of any change in relation thereto.

33. Reciprocity: -

(1) Where any country specified by the Federal Government in this behalf, bynotification in the official Gazette, prevents persons of Pakistan domicile frombecoming members of any institute similar to the Institute, or from practising the profession of Cost and 5[Management] Accounting, or subjects them to unfairdiscrimination in that country, no citizen of that country shall be entitled to be amember of the Institute or practice the profession of Cost and 5[Management]Accounting in Pakistan.

(2) Subject to the provisions of sub-section (1), the Council may prescribe theconditions, if any, subject to which foreign qualifications relating to cost and5[Management] Accounting shall be recognised for the purpose of entry in theRegister.

34. Power to make Regulations: -

(1) The council may, by notification in the official Gazette, make Regulations forcarrying out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing powers,such regulations may provide for all or of the following matters namely: -

(a) the standard and conduct of examinations under this Act;

(b) the qualifications for entry of the name of any person in the Register as amember of the Institute;

(c) the qualification for the purpose of sub-section (4) of Section 5;

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4. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976. Section 15, Clause (b) for the words “Industrial Accountants”.

5. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976. Section 16, for the word “Industrial ”,wherever occurring.

(d) the conditions under which any examination or training may be treated asequivalent to the examination or training prescribed for membership of theInstitute;

(e) the conditions under which any foreign qualification may be recognised;

(f) the manner in which and the conditions subject to which applications forentry in the Register may be made;

(g) the fees payable for membership of the Institute and the standard ofprofessional qualifications of members of the Institute;

(h) the manner in which election to the Council and the Branch Councils may beheld;

(i) the particulars to be entered in the Register;

(j) the functions of Branch Councils;

(k) the Regulations and maintenance of the status and standard of professionalqualifications of members of the Institute;

(l) the carrying out of research in Cost and 1[Management] accounting;

(m) the maintenance of libraries and publication of books and periodicalsrelating to cost and 1[Management] accounting and allied subjects;

(n) the management of the property of the Institute and the maintenance andaudit of its accounts;

(o) the summoning and holding of meetings of the Council and committeesthereof, the times and places of such meetings ,the procedure to be followedthereat, and the number of members necessary to form a quorum;

(p) Recording and certifying minutes of meetings of the Council and the annualgeneral meetings and extra-ordinary meetings;

(q) appointment and removal of auditors of the Institute;

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(r) the manner in which the annual list of members of the Institute shall bepublished;

(s) the power, duties and functions of the President and Vice-President;

(t) the functions of the Standing Committees and other Committees and theconditions subject to which such functions shall be discharged;

(u) the terms of office, and the powers, duties and functions of the Secretary,Treasurer, and the other employees of the Council;

(v) rules of professional and other conducts and the exercise of disciplinarypowers in relation thereto;

(w) the terms and conditions of service of the employees of the Institute,including persons who have become its employees under Section 29;

(x) the registration of students and the fees to be charged for such registration;and

(y) any other matter which is required to be or may be prescribed under thisAct.

(3) All Regulations made by the Council under this Act shall be subject to thecondition of previous publication and to the approval of the FederalGovernment.

(4) The Council shall, as soon as practicable, send a copy of any Regulation made byit to every member of the Institute.

(5) Notwithstanding anything contained in this section, the Federal Governmentmay make the first Regulations of the Council and such Regulations shall bedeemed to have been made by the Council and shall have effect accordingly.

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1. Substituted by Cost & Industrial Accountants (Amendment) Act, 1976. Section 17, for the word “Industrial”.

35. Power to give directions for making regulations, etc:-

(1) Where the Federal Government considers it expedient so to do, it may, by orderin writing, direct the Council to make any regulation, or to amend or rescind anyregulation already made, within such period as it may specify in this behalf.

(2) If the Council fails or neglects to comply with such direction within the specifiedperiod, the Federal Government may make or amend, with or withoutmodifications, or rescind, any regulation direct to be made amended orrescinded by the Federal Government shall be deemed to have been made,amended or rescinded by the Council and shall have effect accordingly.

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