24 August, 2014 / Shawwal 27, 1435

CCP issues show-cause notice to ICAP

Published Sep 18, 2012 12:20am

ISLAMABAD, Sept 17: The Competition Commission of Pakistan (CCP) issued a show-cause notice to the Institute of Chartered Accountants of Pakistan (ICAP) on Monday for directing all its members not to engage trainees belonging to other accounting bodies. The notice has been issued under Section 30 of the Competition Act.

The ICAP had issued a directive on July 2012, advising its members and chartered accountancy firms to refrain from engaging trainees of other accounting bodies, particularly foreign institutes of chartered accountants.

The directive by the ICAP caused academic loss to accounting students belonging to other accounting body too, such as the Association of Chartered Certified Accountants (ACCA), Institute of Chartered Accountants of England and Wales (ICAEW) and Chartered Institute ofManagement Accountants(CIMA) .

The Competition Commission stated in the show-cause notice that the ICAP directive prohibits students, pursuing membership of accountancy bodies other than ICAP from getting training from chartered accountancy firms or members of ICAP in Pakistan, thereby, prima facie, foreclosing access to such students to a large segment of the relevant market, which appears to be in violation of Section 4 (1) of the Competition Act, 2010.

The show-cause notice further stated that such a foreclosure of the relevant market may further result in creation of barriers for undertakings, seeking entry in the market for provision of accountancy services in Pakistan in general, thereby preventing, restricting or reducing competition in such a market in violation of the law.Earlier, the CCP wrote to ICAP on July 16 to ascertain the rationale behind imposition of the bar under the directive on training of non-ICAP students, in particular, that of the foreign accountancy bodies, thus foreclosing a large segment of the market for the professional training.

However, the comments received from ICAP, prima facie, failed to give any reasonable justification for issuance of the directive and also failed to address the concerns raised by the commission for the imposition of the bar.

ICAP has been directed to submit its reply within seven days and appear before the CCP on Sept 24 to explain its position.

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