ICAP, ICMAP lock horns for the CA title

ISLAMABAD: The Institute of Cost and Management Accountants of Pakistan (ICMAP) has applied for trade mark registration of the Chartered Accountant title with the Government of Pakistan’s trademark registration authority.

This action has irked many members of the Institute of Chartered Accountant of Pakistan (ICAP) as they claim that the title was by default, allocated to ICAP members under the CA ordinance 1961.

As per the chapter 2 clause 7 of the CA ordinance 1961, Members to be known as Chartered Accountants, “Every member of the Institute in practice shall, and any other member may, use the designation of a Chartered Accountant and no member using such designation shall use any other designation, whether in addition thereto or in substitution therefore.”

The clause further states, “Provided that nothing contained in this section shall be deemed to prohibit any such person from 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 or elsewhere as may be recognized in this behalf by the Council, or any other qualification that he may possess, or to prodhit a firm, all the partners of which are members of the institute and in practice, from being known by its firm name as Chartered Accountants.”

There were rumors circulating that some members of ICAP have been urging the institute to isolate the practicing members of ICMAP in the industry as a retaliative step.

However, the President of ICAP, Ashfaq Tola, while commenting on the issue told Profit, “I don’t think there is friction between Institutes and we don’t have any issues with practicing members of ICMAP.”

Referring to the trademark issue, he added, “This is a legal issue and it will be handled legally.”

Ali Latif, a senior Chartered Accountant and member of the ICAP’s governing council commented on the issue, “ICMAP is employing deceptive practices to exploit and benefit from the reputation created in the market by ICAP. Last year they tried to acquire audit rights through back door politics, but they failed to do so. Now this is another desperate step to revive their falling reputation amongst students and industry professionals.”

Profit reached out to President of ICMAP, Zia ul Mustafa Awan, He stated. “The rationale behind filing the patent was to protect the CA title from being misused by foreign accountancy bodies who have entered the Pakistani market and are awarding the title at will.”

“Our aim is not to create friction with ICAP as the objective of both organisations aim for the betterment of the accountancy profession. If ICAP has this (CA) trademark registered for itself then our application will automatically be rejected. Therefore, ICAP members shouldn’t be concerned.” he added.

To get some context, there needs to be an assessment of the difference between these certifications and those awarded by foreign institutes.

Currently, ICMA has around 5,000 registered members while ICAP has around 8,000 members. Sajjeed Aslam, head of ACCA Pakistan, while talking to profit in 2018 had stated that in Pakistan ACCA had around 35,000 members.

ICAP being the oldest institute of all (in Pakistan) has maintained a tight grip over the corporate sectors of Pakistan in terms of recognition of its qualification.

However, other institutes like ACCA and ICMAP have followed suit in terms of gaining recognition for their qualifications from HEC as well as the corporate sectors of Pakistan.

ICAP is widely accepted as the premier institute when it comes to Accountancy in Pakistan. The practicing members of this institute are entitled to conduct audits and also provide other tax, legal, accounting and support services to clients.

ICMAP, on the other hand, has been in the shadows of ICAP. Though the institute's members are recognised and authorised to provide audit, legal, accounting and other support services, there are some statutory limits to these.

The primary bone of contention between the two institutions, for long, has been the license to conduct audits. As per SECP regulations and Companies Act, ICAP registered members and firms subject to certain criterias are authorized to conduct audits of any type in the Pakistani jurisdiction.

However, for ICMAP, the audit rights are restricted to cost accounts and companies having share capital upto Rs 3 million.

Does it make any difference? In business terms, it does. The accounting, consultancy and audit firms thrive on the fees of audits assignment and ancillary services provided to the audit clients.

In ICMAP’s case its ability to conduct audits and provide these services is restricted by the law as it doesn’t have the legal right to conduct audits of large entities like those listed on the stock exchange and banks. Thus, its members lose out on a considerable market.

ICAP on the other hand is keen to protect its monopoly in the market and is adamant on holding on to the blanket audit rights.

ACCA, the most popular foreign accountancy body in Pakistan, is sailing a different boat altogether. It doesn’t have any special legal rights for services in Pakistan, but still it has the most members out of all 3 accounting bodies due to its global appeal and relatively better exam pass ratio.

This is not the first time that the accounting bodies in the country have come face to face. In September 2012, the Competition Commission of Pakistan (CCP) brought charges against ICAP for a directive that the latter had issued in July that same year. ICAP’s notice issued to its members and chartered accountants had asked them to refrain from hiring and engaging accounting trainees from any non-ICAP institution, ‘particularly trainees from foreign institutes or any other accounting body of a similar nature’.

Also Read: ACCAs will outnumber CAs in Pakistan this year. What does that mean for the accounting market?