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Governance, Transparency and Service to Members & Students www.icap.org.pk The Council of the Institute after considering 3. The required information in respect of the the report of the Investigation Committee, the qualifications mentioned by the member in his submissions made by the member during his audit reports was not mentioned in accordance hearing and the information and evidence available with the requirements of the ISAs. on record decided to hold the member guilty of professional misconduct under the aforementioned 4. Appropriate disclosures including the terms Clause (3) of Part 4 of Schedule I of the Chartered and conditions of the loans/borrowings and Accountants Ordinance, 1961 on account of the the nature of other material amounts along irregularities relating to the published financial with clear description were not disclosed in statements of the Company. Accordingly, the the financial statements in accordance with Council decided to reprimand the member, the requirements of the Fifth Schedule to the Muhammad Amer, FCA [R-3311], with name along Companies Ordinance, 1984 and the AFRS for with a penalty of Rs. 1,000/- under Section 20D of MSEs. the Chartered Accountants Ordinance, 1961.  The Investigation Committee of the Institute (the 5. The disclosures relating to the domicile, legal Committee) noted that a practicing member failed form of the entity, its place of incorporation, the to address the following irregularities in his audit address of the registered office/principal place report on the financial statements of a private of business, a description of the nature of the limited company, for the years ended June 30, 2010 entity’s operations, its principal activities and and 2011, as per the requirements of the relevant the name of the parent and the ultimate parent International Standards on Auditing (ISAs) and of the group was not provided in the financial Section 255 of the Companies Ordinance, 1984. statements resulting in non-compliance of the Further, the member did not evaluate properly AFRSs for MSEs. whether the financial statements are prepared in all material respects in accordance with the 6. The accounting policies were not properly requirements of the applicable financial reporting disclosed in the financial statements resulting in framework resulting in non-compliance of the ISAs non-compliance of the AFRSs for MSEs. and the Companies Ordinance, 1984. 7. The member did not ensure that the terminology 1. No depreciation was provided in the financial used in the financial statements including the statements for the year ended June 30, 2010 and title of each financial statement is appropriate only one month’s depreciation was provided resulting in non-compliance of the ISA 700. in the financial statements for the year ended June 30, 2011 resulting in non-compliance of 8. The member did not disclose the name of the Accounting & Financial Reporting Standards the engagement partner in his audit reports (AFRS) for Medium Sized Entities (MSEs) and the International Accounting Standard (IAS) 16 resulting in non-compliance of the Auditing (Property Plant & Equipment). Technical Release (ATR) 19 (Identification of Audit Engagement Partner in the Auditors’ 2. The Company was not in production during Report on Financial Statements) issued by the the year ended June 30, 2010 and was suffering Institute. from losses which raises doubts regarding the Company’s ability to continue as a going concern In view of the above, the Investigation Committee and no disclosure in respect of the matter was held the member guilty of professional misconduct made by the company in its financial statements under Clause (3) of Part 4 of Schedule I of the in accordance with the requirements of the AFRS Chartered Accountants Ordinance, 1961 for not for MSEs. complying with the fundamental principle 100.4(c) 7