SECP proposes sole proprietors merger to reap profit

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has proposed the small firms particularly the sole proprietorships that constitute approximately 75 percent of total number of audit firms, to consider merger with bigger firms to reap benefits of scale, access to new markets and better utilization of limited resources.
Chairman SECP Zafar Hijazi, while addressing a seminar ‘code of corporate governance, challenges and way forward’, asked the audit firms to adopt strict auditing criteria, aimed to bring the country’s audit regime at par with the international standards.
Hijazi said that the commission is creating an approved ‘Panels of Auditors’ to synergize audit services, create compatibility between the capacities of the auditors and the requirements of the audit of a particular company and encourage amalgamation of small firms/sole proprietors.
“In comparison with the international audit firms, the biggest gap is the lack of accountability,’ Hijazi said, “The era of self-regulation is over and worldwide there are independent audit oversight mechanisms for accountability whereas in Pakistan we have been debating on its development since last 10 years.”
Be it European Union (EU), World Bank or IOSCO every international forum has concluded that the oversight of audit profession in Pakistan is not independent of the profession it seeks to regulate,” a news statement quoted the chairman.
Chairman said if ICAP does not rise to the occasion, all the corporate governance stakeholders will suffer. The repute of the Institute itself and trust of investors in the economy of Pakistan will be badly affected.
He urged auditors to review their pledge for improving corporate practices, supporting transparency and accountability standards in the markets. The seminar was conducted by Institute of Chartered Accounts of Pakistan (ICAP) in Karachi.