Golden Jubilee Celebrations of ICMAP
Jul 24 - 30, 2000
At the time of independence, there were only seven cost
accountants in Pakistan. Mr. Muhammad Shoaib, the then Finance Minister of Pakistan had
the vision to forsee the need of an institution to provide education and training in the
field of Cost & Management accounting, which was gaining wider application in the
industrial sector of the developed world. Mr. Muhammad Shoaib founded Institute of
Industrial Accountants in May, 1951 and also founded Institute of Cost & Works
Accountants of India, as well, before independence of Pakistan.
The Institute, which started from the verandah of the residence of the
founder President, is today proud to have infrastructure facilities unmatched by any other
professional institute in Pakistan. It owns large custom-built, modern educational centers
in Karachi, Lahore, Islamabad, Multan, Hyderabad, Larkana, Sukkur, Peshawar, Quetta,
Faisalabad, Mir Pur (A.K.). The number of active registered students is over 25000. ICMAP
has over 1600 Fellow and Associate members who hold senior positions in trade, commerce,
industry and Government Organizations. A good of them are employed abroad.
The ICMAP is a member of International Federation of Accountants,
International accounting Standards Committee and South Asian Federation of Accountants.
By the Grace of Al Mighty Allah, the above achievements have made ICMAP
one of the largest professional Institute in Pakistan. which has been playing a proactive
role in the development of accounting profession not only in Pakistan but also globally.
The Institute started its year long Golden Jubilee Celebrations, and
organized the inaugural two day conference on "Adding Value to Business"
recently in Karachi.
Federal Minister for Finance & Economic Affairs, Mr. Shaukat Aziz,
was the Chief Guest in the inaugural day of conference said that the government would
provide cheaper utilities to the people if the tax base was expanded as a result of the
survey. "The government has to impose surcharge on utilities when it has no revenue
from taxes". Speaking at the Golden Jubilee celebration function of the Institute of
Cost and Management Accountants of Pakistan (ICMAP) at a local hotel, the federal minister
said that the economic survey started by the Government in Pakistan has no precedence in
the world. "The survey is not only directed against traders but its main objective is
to document entire economy. The economic survey is a spectacular feast and it will raise
head of every Pakistan with pride".
Elaborating on the progress made in the survey campaign, Mr. Shaukat
said the distribution of over 30,000 forms had been achieved. The number of unregistered
is two to three times more than the government had expected, he said. He said that the
government was fully committed to broaden the tax net. "The survey teams will visit
shops, houses and commercial establishments and the tempo of registration will gain
momentum. Nobody will be spared and provincial governments will levy income tax on
The Government revenue increased by 17 per cent in the current, whereas
the target for revenue collection for the next year has been set at 24 per cent, the
minister said adding that he is greatly encouraged with the result of the economic survey.
It is a marathon which calls for continuous running till the objective is achieved, he
Turning to the role of accountants, Shaukat Aziz said that both the
accounting bodies ICMAP and ICAP have a primary role to play so far as the
development of the capital market is concerned. "The preparation of accurate and
timely financial statements with the necessary disclosures and transparency is at the
heart developing a fair stock market that results in proper price determination and that
adequately protects investors".
He said that ICMAP members were the main architects for creating value
consciousness to ensure cost competitive management decisions and to ensure appropriate
pricing of products. This is absolutely essential if Pakistan's industry is to compete
effectively in this era of increasing globalization, he added.
Dr. Ishrat Husain, Governor of the State Bank of Pakistan, was the key
note speaker in the inaugural session of golden jubilee conference, said that the time has
come to concentrate on the internal factor to improve the business environment and
"we should graduate ourselves to deal with the external influences". He said the
external influence would lead towards globalizing the economy and hence it must be handled
carefully. He said the second factor which affects the economy and the business, was the
technical know-how of our labour force. He said the standardization of labour was needed
for the growth of business and for adding value to it. He emphasized the training
programmes and refresher courses for the labour force. He said the third factor was
upgradation of technology in the country and there was a need to learn from the neighbour
India, which had succeeded in getting very good results in the field of Information
Technology. He said "We can still get better result by adopting this technology"
IT is a growing field and Pakistan can get a substantial amount of exports share through
this technology. He stressed the need for better products designing, processing and
engineering. He said today 52 types of jeans were available in the market while initially
it was only blue jeans.
He said he was not satisfied with the quality of approach by the
Pakistanis and advised that they must go for better quality production. He said foreign
buyers have shut off their windows for Pakistani products as "we are producing only
second grade products". He said corporate governance was another factor in developing
a better business environment in the country. Unless we reduce the cost of input through
professional management, we will not be able compete in the world market".
"Finally customer is the key element of the business who are not treated as they need
to be treated". The governor said there was an attitude problem in the markets and
the salesmen did not show their skills in persuading the customers to buy their products.
"Our markets are not business friendly and customer oriented", concluded the
Mr. D. M. Qureshi, Adviser, Treasury, Islamic Development Bank, Jeddah,
Saudi Arabia, in his technical paper on "Development of Financial Markets for
Economic Revival" pointed out that financial markets in the world have reached a
consensus to concentrate on three pillars to safeguard the health of financial system,
both at the domestic and international levels. He identified these three pillars as: good
health of financial institutions, functioning of markets and the establishment of a sound
infrastructure including legal and judicial processess, payment and settlement systems and
accounting standards. Good practice in each of these three pillars are posted by three
sets of incentive systems, namely: internal governance, supervision and market discipline.
Defining on the strength of imparted to three pillars by good practices in given financial
markets, financial markets are able to face effectively or otherwise the adverse
consequences of financial instabilities caused by short-term volatilities, medium term
misalignments and the contagion - effect of crises. Referring to current state of
Pakistan's financial market, Mr. Qureshi expressed the view that the financial market in
Pakistan is highly unbalanced, financially weak, extremely volatile and lacks depth to
effectively perform the role of revival of the national economy. Excessive borrowings by
the government owing to narrow tax base and heavy expenditure for debt servicing, defence,
development and civil administration, has crowded-out the availability of market sources
of funds for investment the private sector. The banking system of Pakistan in he said, is
highly under-capitalized, below investment-grade and suffers from poor profitability by
international standards. Moreover the absence of an active bond market in Pakistan causes
unbridled volatility and has no safety value for flight-to-safety for investors whenever
the equity market experiences turbulence.
Mr. Imtiaz Alam Hanfi, Former Governor State Bank of Pakistan, presided
first technical session, said that, with notable expectations of multi-national companies,
corporate governance is sub-standard and transparency of information is much below the
international standards of disclosure.
Mr. Javed Iqbal, Chairman and Managing Director, Philips Electrical
Industries of Pakistan in his second technical paper titled "Role of Management
Accountants in Economic Development" recalled the history of accounting and observed
that from l5th century when accounting was first discovered, until the arrival of the
industrial, the accountants function has not changed much. However with the advent of
Industrial Revolution, the concept of management accounting appeared as management needed
reports on prices, costs, budgets inventories etc. With the dawn of the 20th century,
crises national and cross continent business started flourishing and a number of large
multinational organizations started expanding themselves throughout the world. The world
has moved fast towards globalisation through export oriented businesses and movement of
goods from country to country. Multinational companies continue to invest and
manufacturing facilities in countries/ regions where they foresee competitive advantages.
Mr. Javed Iqbal pointed out that the part played by the Management Accountant can be
identified in all facets of economic activity in various roles. He emphasized that as the
basic objective of management accounting is to serve management by providing information
for decision making, the management accountant would always form part of the cross
functional decision making teams: be it a trading concern, a manufacturing company, a
financial institution or a government. In this way the management accountant has vital
role to perform in the entire management function of planning, controlling, organising,
communicating and motivating.
Concluding his paper Mr. Khalid Mirza, Chairman Securities and Exchange
Commission of Pakistan, expressed the view that management accountants can play a greater
role in order to achieve revitalization of economic activities as per objectives set by
the government, through participation in financial and managerial reengineering of
operationally sick units and finally through guiding the government in the rationalizing
tariff and Tax Structure regime in order to attain optional benefits. This would go a long
way in putting the country's economic house in order.
"Credit Rating and the Role of Management Accountants" was
the subject of third technical paper presented by Mr. Jamal Abbas Zaidi, Executive Vice
President, DCR-VIS, credit rating company, defined credit rating an as an objective,
professional and independent opinion regarding the credit quality of a debt instrument and
ability of an entity to meet its unsecured obligations. It indicated the likelihood of
timely payment of principal and profit on debt that has been issued or is it to be
offered. The point to be noted is that Rating is not a recommendation to buy or sell a
security but can be used as a factor in investment decision. He further explained that
Rating should not be compared or confused with audit. Audit presents a snapshot of the
state of affairs at a particular point of time and compliance with regulations but doesn't
examine the ability of an organization to meet its financial obligations. On the other
hand, Rating is a continuous process through surveillance and gives a well-considered
opinion on the probability and ability of an organization to meet its financial
obligations. The opinion of credit rating agencies regarding the credit quality of issues
and ability of entities are expressed in a comprehensive yet simple manner that facilitate
its use by investors, depositors and creditors.
"Regarding the role the management accountants can play in the
furtherance of credit rating culture in the country, the session chairman, International
Monetary Fund's Pakistan representative, Mr. Ahsan Mansur, visualized two different roles
for management accountants vis-a-vis credit rating. Firstly the role for those management
accountants who are occupying the positions of CEO or CFO is to make themselves aware of
the credit rating process and use it as a tool for creating alternate sources, reducing
the cost of funding and bringing about competitive advantages to their companies
enterprise. They should interact with the credit rating company to make the best use of
the analysis and the peer group companies comparisons to overcome the weaknesses of their
organizations. Secondly, the management accountants can also play a role as credit rating
analysts as they already have a solid base in financial, cost and business risk. In this
context Mr. Mansur cautioned that rating is a specialized field and therefore, acquiring
knowledge of its mechanism and philosophy is essential.
"Role of Management Accountants in Services Sector" was the
subject of the fourth technical paper presented by, Mr. Sher Afgan Malik, Managing
Director, Pakistan International Airlines, started his paper by stating, an economic
spectrum has three constitutes, namely, agriculture, industry and services sector.
Management accountants have, wherever they were employed rendered excellent services in
all the three sectors. The services sector, he pointed out has four components namely,
Technological, Social, Physical and Financial. Glorious contributions have been made in
institutions where management accountants were associated in employment.
In his paper Mr. Afgan identified a number of objectives of management
accountants in rendering useful service sector. These objectives include providing
information for decision making and planning and proactively participating as part of the
management team, assisting management in directing and controlling operational activities
measuring the performance of activities of managers and other employees within the
organization and assessing the organization's competitive position and working with other
managers to ensure the organization's long run competitiveness in its industry.
The last session chairman, Mr. Lal Nanayakkara, President South Asian
Federation of Accountants, came all the way from Sri Lanka to attend this conference, in
his concluding comments, observed that the 21st century has come up with great challenges.
New management tools are in currency. Management accountants are equipping
themselves with these tools and are rendering excellent services in eliminating waste,
increasing productivity and beefing up the bottom line. He said the future augurs well for
the dynamic role of management accountants. They are by virtue of the training,
professional studies and well developed acumen well poised to serve the society.
Interior Minister Lt. General (R) Moinuddin Haider HI (M) was the Chief
Guest in next day's valedictory session, said that the present government is sincerely
working to root out corruption and bring an order to the society. Addressing at the
concluding session of the Golden Jubilee Conference of Institute of Cost and Management
Accountants of Pakistan (ICMAP) on "Adding Value to Business" the Interior
Minister pointed out that corruption was the root cause of deterioration of all the
institutions. "We are trying to root out corruption from the society", he said,
adding that this nation that corruption was the way to get work done was being eliminated
from the society.
He asked the professional accountants and auditors to fight against
corruption, adding that the professional could play an important role in rooting out
corruption. He appreciated the efforts of ICMAP in playing a major role in the developing
of institutions. He said professional education was very important and underlined the need
to bring changes in syllabus according to the requirements. He said the government was
working on plans for devolution of powers at grass root level. He assured the ICMAP for
his full support.
Those who also spoke on the occasion included Mr. M. H. Asif,
President, ICMAP, Mr. M. Ashraf Bawany, Vice President, ICMAP, Mr. Badruddin Fakhri, H.
Secretary, ICMAP, Mr. M. Rafi, H. Treasurer, ICMAP and Prof. Dr. Khawaja Amjad Saeed,
Chairman Golden Jubilee Committee.
To commemorate half a century of services of the Institute in the field
of professional education Government of Pakistan has launched postal stamps worth Rs. 2/-
and Rs. 15/- on the occasion of Golden Jubilee celebrations.