ICAP Clarifies Its Role in the Tax Audit Function
Saturday, October 17, 2009
Mr. Saqib Masood, Chairman Taxation Committee of the Institute of Chartered Accountants of Pakistan (ICAP) in a statement has expelled misleading facts reported in a news item appeared in the Business Recorder on 15th October, 2009. Mr. Masood explained that in June 2009 ICAP and the Federal Government signed a Memorandum of Understanding (MOU) whereby as a national cause, ICAP agreed to develop a framework for outsourcing of tax audit by the FBR to be carried out by the firms of Chartered Accountants. Accordingly, ICAP developed a Tax Audit Framework (TAF) and submitted to the FBR for appropriate action. As per the terms of this TAF it would be exclusive domain and responsibility of the FBR to select the companies to be audited and appointment of auditors.
Mr. Masood expressed his surprise at the news item stating that FBR has directed ICAP to maintain independence while selecting the firms of auditors. He said that as per TAF developed by ICAP it is sole and exclusively authority of the FBR to select cases for audit and appoint firms of Chartered Accountants as auditors. Mr. Masood emphasized that ICAP will have no role or responsibility whatsoever in selection of cases or appointment of auditors. Further, under the TAF, FBR cannot direct ICAP for implementation of the said TAF.
Explaining further Mr. Masood said that ICAP has accepted the challenge of developing Tax Audit Framework for FBR as a national cause on the request of the Finance Minister who desired ICAP’s role and support in improving tax audit system. He said that ICAP as a premier national institution will continue to play it’s role for national interest. ICAP will hold workshops for its members to explain terms of TAF and provide them guidance on technical aspects of the proposed tax audit by its members. He however, made it clear that there will be a direct engagement contract between FBR and the CA firms to undertake audit assignments. ICAP will have no role in selection of cases, appointment of auditors or conducting of audit and reporting.
Mr. Saqib Masood said that this clarification is important to put the facts in correct perspective to avoid any confusion about the role of ICAP in the process.
Mr. Masood expressed his surprise at the news item stating that FBR has directed ICAP to maintain independence while selecting the firms of auditors. He said that as per TAF developed by ICAP it is sole and exclusively authority of the FBR to select cases for audit and appoint firms of Chartered Accountants as auditors. Mr. Masood emphasized that ICAP will have no role or responsibility whatsoever in selection of cases or appointment of auditors. Further, under the TAF, FBR cannot direct ICAP for implementation of the said TAF.
Explaining further Mr. Masood said that ICAP has accepted the challenge of developing Tax Audit Framework for FBR as a national cause on the request of the Finance Minister who desired ICAP’s role and support in improving tax audit system. He said that ICAP as a premier national institution will continue to play it’s role for national interest. ICAP will hold workshops for its members to explain terms of TAF and provide them guidance on technical aspects of the proposed tax audit by its members. He however, made it clear that there will be a direct engagement contract between FBR and the CA firms to undertake audit assignments. ICAP will have no role in selection of cases, appointment of auditors or conducting of audit and reporting.
Mr. Saqib Masood said that this clarification is important to put the facts in correct perspective to avoid any confusion about the role of ICAP in the process.
Labels: ICAP
posted @ 9:43 PM,
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