Directive 4.

25 (Revised 2024)

AUDIT PRACTICE REVIEW & SUPPORT PROGRAM (APRSP)

The Institute of Chartered Accountants of Pakistan being a member of the International Federation
of Accountants (IFAC) needs to mandatorily comply with Statements of Membership Obligations
(SMOs) issued by IFAC.

IFAC's SMO-1 Quality Assurance requires that a mandatory quality assurance review system
should be in place for firms performing Audit, Assurance and Related Services to ensure that the
firms and its partners comply with all applicable professional standards with particular emphasis
on strengthening the quality of audit assignments. Similar programs for ensuring quality of practice
are followed by institutes globally including those operating in Bangladesh, Sri Lanka, UK and
Malaysia.

ICAP already runs a Quality Control Review (QCR) Program under QCR framework since 2003.
The QCR framework covers firms that are engaged in statutory external audits of:
• Public Interest Companies;
• Large Sized Companies; and
• Public Interest and Large Sized Companies which are either associations not for profit or
limited by guarantee.
Now the Institute is introducing 'Audit Practice Review & Support Program’ for all the Non-
QCR rated firms engaged in Audit, Assurance and Related Services.

The APRS Program approved by the Council, after due process, is attached herewith. It outlines:
(a) Objectives & Scope of the program;
(b) Selection of firms for review under the Program and the review process;
(c) Details of Appellate Forums and Appeal Process; and
(d) Support by the Institute.

The APRS Program is effective from October 1, 2020.

The Program can also be accessed at https://www.icap.org.pk/aprsp/
(331st meeting of the Council- September 4-5, 2020)

The Council approved the following changes in the directive

“6.2.6 The decision of the Forum shall be final unless challenged before the High Court under
Clause 6.2.9, a copy of the decision shall be communicated to the appellant with a copy to the
Director of Practice Review and the Chairman of the Committee.
6.2.9 Any person aggrieved by the order of the Appellate Forum shall file an appeal before the
High Court, within sixty days of the date of such order.”

(Approved in 376th meeting of the Council- December 18-19, 2023)

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AUDIT PRACTICE REVIEW &
SUPPORT PROGRAM

[Not Applicable to QCR Rated Firms]

September 11, 2020

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 AUDIT PRACTICE REVIEW & SUPPORT PROGRAM (APRSP)
TABLE OF CONTENTS

Clause Particulars Page

Reference No.
Preamble / Background 3
Part – I Scope, Definitions & Objectives
1.1 Scope 6
1.2 Definitions 6
1.3 Objective of the APRSP 9

Part - II Selection & Arrangement of Reviews

2.1 Firms subject to Practice Review 11
2.2 Selection for Review 11
2.3 Arrangement of Reviews 14

Part - III Directorate of Practice Review

3.1 Establishment of the Directorate of Practice Review 16
(DPR)
3.2 Functions & Responsibilities of the DPR 16
3.3 Powers of the Reviewer 17

Part - IV The Review Process & Report

4.1 Review Process 19
4.2 Review Report 20
4.3 Consideration & Determination by the Committee 21

Part - V Retention & Confidentiality

5.1 File Retention 25
5.2 Confidentiality 25

Part - VI Appeal
6.1 Appellate Forum 27
6.2 Filing of Appeal 28

Part - VII Miscellaneous

7.1 Failure to Comply 30
7.2 Amendments / Removal of Difficulties / Effective Date 30

Part - VIII Support by the Institute

8.1 Technical Helpline 32
8.2 Frequently Asked Questions (FAQs) 32

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Preamble/Background

The Institute of Chartered Accountants of Pakistan (the Institute) is a member of the

International Federation of Accountants (IFAC) and Statements of Membership
Obligations (SMOs) by IFAC are issued, which are needed to be mandatorily complied
by its member bodies. The SMO-1 (Quality Assurance) of the IFAC requires that a
mandatory quality assurance review system should be in place for firms performing
audits of financial statements by virtue of which it should be ensured that the firms and
its partners are in compliance with the quality standards for professional assignments.
Similar programs for ensuring quality of practice are followed by international institutes
globally including those operating in Bangladesh, Sri Lanka, UK and Malaysia.

Building public trust in the work performed by practicing members is one of the key
priorities of the Institute, therefore, improvements in the existing practice regime is also
one of the strategic objectives approved by the Council of the Institute. Accordingly, the
Council of the Institute decided to introduce this ‘Audit Practice Review & Support
Program’ to ensure maintenance of quality standards of the professional practices. This
will ensure that the work carried out by practicing members complies with Professional
Standards and is in accordance with the directives of the Council and other laws,
regulations and pronouncements of professional bodies as applicable in Pakistan.

The ‘Audit Practice Review & Support Program’ provides the application of best
practices followed by professional institutes around the world. The ‘Audit Practice
Review & Support Program’ will run in parallel with the Quality Control Review (QCR)
Program and firms which have attained satisfactory QCR rating under the QCR program
of the Institute are excluded from the ambit of the ‘Audit Practice Review & Support
Program’.’.

The key features of the ‘Audit Practice Review & Support Program’ are as follows:

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(i) Review of engagements to ensure that Audit, Assurance and Related Services
rendered by firms, comply with the Chartered Accountants Ordinance, 1961,
Chartered Accountants Bye-Laws, 1983, Professional Standards, Training
Regulations and Directives of the Council of the Institute;

(ii) Applicable to - firms carrying out Audit, Assurance or Related Services;

(iii) Establishment of a Directorate of Practice Review; and

(iv) Constitution of an Independent Appellate Forum.

The Council believes that the effective implementation of the Program will go a long way
in the development of the profession.

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PART I – SCOPE, DEFINITIONS AND
OBJECTIVES

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1.1. Scope

The ‘Audit Practice Review & Support Program (APRSP, the Program) applies
to all firms providing Audit, Assurance or Related Services conducted under legal
and financial reporting framework as applicable in Pakistan.

This document prescribes the objectives and scope of the Program, composition,
responsibilities and functions of the Directorate of Practice Review and the
Appellate Forum. The Members’ Affairs Committee formed by the Council shall be
responsible for carrying out the implementation of the Program.

1.2. Definitions

In this framework, unless there is anything repugnant in the context:

1.2.1. “Additional Practice Review” means review conducted due to

circumstances provided in clause 2.2.6 below;

1.2.2. “Audit, Assurance and related services partner” means a partner as

identified by the Firm to the Institute;

1.2.3. “Audit, Assurance or Related Services” “Audit” means an audit

assignment carried out by a Firm in respect of which the audit report is
issued under International Standards on Auditing as applicable in Pakistan.
“Assurance” means an assurance engagement in respect of which the
assurance report is issued under International Standards on Assurance
Engagement as applicable in Pakistan. “Related services” refer to
assignments performed under the pronouncement of International Audit
and Assurance Standards Board (IAASB) on related services. These
assignments carried out together or separately are referred to as “Audit,
Assurance or Related Services”;

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 1.2.4. “Committee” means the ‘Members Affairs Committee’ formed by the
Council of the Institute;
1.2.5. Reviewer” means a Chartered Accountant appointed by the Institute to
carry out Practice Review under this Program and having post-qualification
experience including in a professional QCR rated firm of Chartered
Accountants, as may be prescribed by the Committee.;

1.2.6. “Chartered Accountant” means a person who is a member of the Institute;

1.2.7. “QAB” means the Quality Assurance Board;

1.2.8. “Firm” means a sole practitioner or a partnership of the members of the

Institute engaged in providing Audit, Assurance or Related services;

1.2.9. “Non-Reportable Matters” means matters which are insignificant

departures from the requirements of the Program and are not considered
as Reportable Deficiencies;

1.2.10. “Practice Review” means a review performed under the Program to

ensure that the work carried out by the Firm or Member(s) is in compliance
with professional standards and with the requirements mentioned in clause
1.3.1 below;

1.2.11. “Director of Practice Review” means a Chartered Accountant appointed

by the Institute under the Program, with post-qualification experience
including in a professional QCR rated firm of Chartered Accountants as may
be prescribed by the Committee, and may include a Senior Manager of
equivalent qualification and prescribed experience appointed in place of the
Director, as deemed appropriate;

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1.2.12. “Re-Review” means re-review conducted as prescribed under clause
4.3.1(c) of this Program on the direction of the Committee on some or all of
the aspects covered in clause 1.3.1;

1.2.13. “Practice Review Year” means a period of twelve months commencing

on 1st July of any year and ending on 30th June of following year;

1.2.14. “Professional Standards” means the International Standards on Auditing

(ISAs), International Standard on Quality Control 1 (ISQC 1),
Related Services Pronouncements, Ethical Standards, Directives and
Pronouncements issued by the Institute, Legal and Regulatory
Framework and other requirements with respect to Audit, Assurance or
Related Services as applicable in Pakistan;

1.2.15. “Public Practice Program” means a training program prescribed by the

Council and to be completed by a practicing member carrying out Audit,
Assurance or Related Services.

1.2.16. “Reportable Deficiencies” mean matters which are departures from the
requirements of the Program or Professional Standards and are further
categorized as either “significant” (e.g. important to the quality of the work
performed to support the report issued by the practicing member or
important to the usefulness of the financial statements); and

1.2.17. “Partner” means a Chartered Accountant identified as a partner in a firm

of chartered accountants on “Form C” submitted to the Institute.

Any term not defined under this Program shall have the same meaning as
prescribed in the Chartered Accountants Ordinance, 1961 (here-in-after referred
to as ‘the Ordinance’) or the Chartered Accountants Bye-Laws, 1983 (here-in-after

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 referred to as ‘the Bye-Laws’) or any other Directive or pronouncement of the
Institute.

1.3. Objective of the APRSP

1.3.1 The objective of the Program with respect to a firm is to ensure that:

a) in providing Audit, Assurance or Related Services, a firm complies with

Professional Standards; and

b) it complies with Training Regulations for Firms employing students as

given in Council’s Directive(s);

c) Members are compliant with CPD requirements of the Institute.

1.3.2. In order to achieve the above objectives there shall be periodical Practice
Review of the Firms. The scope of the Practice Review shall only cover
matters noted in 1.3.1 above.

1.3.3. Further, the Program incorporate requirements for members to complete the
Public Practice Program prescribed by the Institute in order to properly
equip and remain updated with knowledge of the matters related to the
public practice concerning Audit, Assurance or
Related Services of the firm.

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PART II - SELECTION AND ARRANGEMENT
OF REVIEWS

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2.1. Firms subject to Practice Review

2.1.1. All firms engaged in providing Audit, Assurance or Related Services shall be
subject to Practice Review under this Program.

2.1.2. Where the name of the firm is appearing in the list of firms having satisfactory
QCR rating, that firm shall be excluded from the purview of this Program. If
the name of the firm is removed from the list of firms having satisfactory
QCR rating, that firm shall be subject to this Program if it does not apply for
review under the QCR Program within one year from the date of removal
from the list of firms having satisfactory QCR rating.

2.1.3. A firm may apply for an exemption from Practice Review by filing an
Exemption Form in a prescribed format with the Director of Practice Review
certifying that:
a) The firm has not been engaged in Audit, Assurance or Related Services
during the two years preceding the end of last financial year; or

b) The firm will discontinue the provision of Audit, Assurance or Related

Services within three months from the date of the notice of Practice
Review. However, firms which have provided Audit, Assurance or
Related Services to public limited companies (other than those which
are already covered under the QCR Program) during the preceding one
year from the date of Review shall be subject to Practice Review, for
that period.

2.2. Selection for Review

2.2.1. A member obtaining a practicing license for the first time and establishing
a new firm, either as a sole proprietor or in partnership with others, in which
either the sole proprietor or at least one Partner is engaged in providing

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 Audit, Assurance or Related Services, shall be subject to Practice Review
after completing its two years of operation.

2.2.2. A firm, already in practice on the Effective Date of the Program and in which
at least one member is engaged in providing Audit, Assurance or Related
Services shall be subject to Practice Review at any time after one year of
effective date of the Program and thereafter, every two and a half years
from the date of its last Practice Review. However, the Director of Practice
Review may, on special request of the firm, grant an extension in the
Practice Review for a period not exceeding three months, from the date the
Practice Review is due to commence.

2.2.3. Up to fifty percent Members who are engaged in providing Audit, Assurance
or Related Services in a single firm shall be subject to Practice Review
referred to in clause 2.2.2.

Every firm shall ensure that all members engaged in providing Audit,
Assurance or Related Services shall be subjected to Practice Review at
least once within a period of five years. However, any delay on the Part of
Directorate of Practice Review to commence, conduct or complete the
Practice Review during the stipulated time shall be excluded from this
period.

2.2.4. Notwithstanding anything else contained in this Program, a firm can be

subjected to Re-Review in the event, the Committee, through a resolution
passed by at least three fourth majority of its members, concludes that a
firm or a member has not complied with the requirements specified in clause
1.3.1.

2.2.5. Notwithstanding any previous Practice Review, a Firm can be subject to

additional Practice Review, if the Committee so concludes, in the case of a

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 change in the partnership profile of the Firm. For the purpose of this clause,
the term “change” means:

(i) Induction of new member(s) by a Firm, which constitutes 50% or

more of the firm’s total partners’ strength.

(ii) Change in the role of existing partner(s) who was/were not

previously providing Audit, Assurance or Related Services.

The member(s) and or partner(s) referred to in sub clause (i) and

(ii) above will be subject to Practice Review after completion of one
year from the date of admission, or the change in role, of such
member(s) or partner(s) as the case may be.

(iii) Merger of a firm with another where one of the firms has not been
engaged in the provision of Audit, Assurance or Related Services
and the partner(s) in such firm has/have not been subject to
Practice Review. Such partner(s) shall be subject to Practice
Review after completion of one year from the date of merger.

2.2.6 If a case involving a member at the time of commencement of Practice

Review, is pending before the Investigation Committee, the Director of
Practice Review may, with the approval of the Committee, postpone the
Review of the member for the time being to the extent of that particular
assignment/client of the firm in respect of which the investigation
proceedings are in process. The Practice Review may however, be
commenced again with the approval of the Committee.

2.2.7 Notwithstanding, anything contained in clause 2.2.1 to 2.2.6 above, the

Director of Practice Review, in consultation with the Chairman of the
Committee, may decide to defer the Practice Review if the

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 circumstances so require. However, in such cases Director of Practice
Review shall report the reasons for the consideration and approval of
the Committee in its next meeting.

2.3. Arrangement of Reviews

2.3.1. The Director of Practice Review shall serve a notice to a Firm indicating that
Practice Review of the firm is due.

2.3.2. The firm shall complete and file a Planning Questionnaire, in a format
prescribed by the Committee, with the Director of Practice Review within 30
days of the notice issued under clause 2.3.1.

2.3.3. The Director of Practice Review shall consider the information contained in
the Planning Questionnaire submitted by the firm and assign one or more
Reviewer(s) to conduct the review.

2.3.4. The Director of Practice Review shall give notice in writing in a form to be
prescribed by the Committee giving the name(s) of the assigned
Reviewer(s) and the commencement date of a firm’s review.

2.3.5. The notice shall be served upon the firm at least 30 days prior to the
commencement date or such shorter period as may be mutually agreed by
the firm and the Director of Practice Review.

2.3.6. Within 15 days of receipt of the notice pursuant to clause 2.3.4, the firm may
file an objection in writing to the named Reviewer(s) for any other valid
reason.

2.3.7. The Director of Practice Review, in consultation with the Chairman of the
Committee, shall consider the objection and may assign another
Reviewer(s) on being satisfied that there is a reasonable basis for the
objection.

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PART III - DIRECTORATE OF PRACTICE
REVIEW

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3.1. Establishment of the Directorate of Practice Review (DPR)

There shall be a DPR in the Institute for carrying out the activities and functions
under the Program. The DPR shall be headed by a Director or Senior Manager,
Practice Review appointed by the Council as it may deem appropriate. There will
be other staff and reviewers appointed by the Committee. The reviewers shall be
appointed as full time practice reviewers.

3.2. Functions and responsibilities of the DPR

3.2.1. The Director of Practice Review shall have the following functions and
responsibilities:

a) to ensure adequate and effective implementation of Practice Review in

accordance with this Program;

b) to ensure conduct of Practice Review is in accordance with the

procedure laid down;

c) to seek guidance of the Committee in respect of matters where the

Director of Practice Review feels that explicit guidance is not available
in the Program. The Committee shall decide on the matter expeditiously
within a period not exceeding 60 days of the receipt of such matter or
enquiry. Any matter not specifically covered under this Program shall be
referred to the
Council for advice;

d) to finalize the Practice Review report in consultation with the

Reviewer(s) for submission to the Committee;

e) to work as secretary of the Committee;

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 f) to maintain record of all reviews, by name of the firm, partner, location,
period covered, date of review etc.

g) to represent the Directorate at the Appellate Forum;

h) to maintain an updated list of members and firms subjected to practice

review, conclusions and actions taken; and

i) to appoint, with the approval of the Secretary, any individual on a fee

and authorize him/her to perform Practice Review under this Program.

3.2.2. The Director of Practice Review shall report functionally to the Committee
through its Chairman and administratively to the Secretary.

3.3. Powers of the Reviewer

3.3.1. A Reviewer shall have the following powers:

a) to review files, record and other information of a firm under review;

b) to require the firm to provide information and produce documents

necessary for the purposes of Practice Review;

c) to report the findings of the Practice Review at its conclusion to the

Committee through Director of Practice Review;

d) to assist Director of Practice Review in presenting the “Report of

Review” to the Committee; and

e) to assist Director of Practice Review to make representations before the

Appellate Forum, if required.

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PART IV -THE REVIEW PROCESS AND
REPORT

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4.1. Review Process
4.1.1. The Practice Review shall be conducted in accordance with the procedure
laid down in this Program.
4.1.2. On the commencement date of the Practice Review, the Reviewer shall
attend at the office of the Firm, or any other location as may be agreed with
the firm. In conducting the Practice Review, the Reviewer shall consider:

a) documentation and implementation of the quality control system of the

Firm;

b) current engagement files (covering Audit, Assurance or Related

Services) of last completed assignments provided that, in case of
private limited companies, selection preference would be given to
engagement files of companies having share capital exceeding
Rupees fifty million or annual turnover exceeding Rupees one hundred
million;

c) compliance with Professional Standards;

d) compliance with the provisions of the Ordinance, Byelaws and

Directives of the Institute;

e) compliance with training regulations of the Institute;

f) compliance with laws and regulations as applicable in Pakistan,

related to Audit, Assurance and Related services;

g) that the practicing members carrying out Audit, Assurance or Related

services of the firm have attended the Public Practice Program once
in three years; and

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 h) Compliance with CPD program/directive of the Institute.

4.1.3. The Reviewer shall select two engagement files to be reviewed for each
partner or sole proprietor engaged in audit, assurance and related services
of the firm. However, the Reviewer may, if deemed necessary, select
additional files to be reviewed with reasons to be recorded in writing duly
concurred by Director of Practice Review. The Reviewer shall consider the
following factors regarding selection of files:
a) the degree of reliance, if any, to be placed on quality controls;
b) the size of the firm; and
c) level of risk involved in the engagement.

4.1.4. The Reviewer shall use a Practice Review checklist duly approved by the
Committee to ensure that requirements of the Program have been met. The
format of the checklist shall be placed on the Institute’s website for the
information of members of the institute.

4.2. Review Report

4.2.1. At the conclusion of the Practice Review, the Reviewer shall prepare a draft
report within 30 days, setting out Reportable Deficiencies and Non-
Reportable Matters.

4.2.2. After completion of the review, the Reviewer shall discuss the Reportable
Deficiencies, if any, in the draft report with a representative of the Firm and
may revise the draft report.

4.2.3. The Director of Practice Review shall discuss the draft report with the
Reviewer to ensure that all Reportable Deficiencies have been adequately
identified and appropriately reported and the draft report conforms to the
requirement of the Practice Review.

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 4.2.4. The Director of Practice Review may also discuss the report with the Firm.

4.2.5. On conclusion of the review by the Director of Practice Review, the draft
report will be delivered to the firm for comments to be provided within 21
days.
4.2.6. The Director of Practice Review or a Reviewer may require the firm to
provide written confirmation of any actions planned by the firm to address
deficiencies.
4.2.7. If the Firm disagrees with a Reportable Deficiency listed in the report, it may
provide explanation and documentation to support its position.
4.2.8. The Director of Practice Review or a Reviewer may amend the draft report
as appropriate, taking into consideration any matters arising from clause
4.2.3 to clause 4.2.7, concluding with recommendations as to a course of
action and submit the final report to the relevant bench of the Committee for
review.
4.2.9. The Director of Practice Review shall communicate the decision of extending
satisfactory report or otherwise of the Committee or the Council as
appropriate within fifteen days of the decision, to the firm.

4.3. Consideration and Determination by the Committee

4.3.1. The Committee shall consider the report and matters pertaining to the
Practice Review, or of a Re-Review, and may take one or more of the
following actions:

a) deem the Review or Re-Review complete and ratify the report of

Practice Review;

b) require the firm to provide further written submissions on the intended

correction of any identified deficiencies along with action plan in a

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 prescribed format, and consider the matter further once such
submissions have been received or the time for making submissions has
expired;

c) require the firm or a member to be subject to full or partial Re-Review

within one year. However, Committee shall not allow opportunity of more
than two Re-Reviews to any firm or member within one year from the
date of first Practice Review;

d) require the firm or a member to undertake certain specified actions in

order to improve the overall standards of the Firm to ensure that it
conforms to the requirements of the Program;

e) subject to the approval of three-fourth majority of the members of the

Committee to refer the member to the Investigation Committee for
investigation, where the member has continuously failed to implement
the action plans and improve the standard of work after two Re-Reviews;
and/or

f) report to the Investigation Committee through Secretary on any other

matter relating to non-compliance with the Professional Standards.

To educate and help improve the understanding of compliance

requirements by members / firms under the Program, the clauses (e) and
(f) above shall be applicable after three years from the effective date of this
Program.

4.3.2. The Committee shall not refer a matter to the Investigation Committee or
Secretary solely for the failure of a firm or a member, to produce a document
subject to a valid claim of legal privilege that has not been waived.

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4.3.3. In determining the action to be taken pursuant to clause 4.3.1, the
Committee may consider, but will not be limited to, the following matters:
a) the degree to which the requirements of the Practice Review have been
met;

b) the nature and severity of any identified deficiencies;

c) the cooperation of the firm or member;

d) implementation of action plan submitted as a result of an earlier Practice

Review or Re-review as the case may be; and

e) public interest;

4.3.4. A decision made by the Committee pursuant to clause 4.3.1(e) shall be final
unless a firm or a member files an appeal under Part VI of this Program.
Action taken or proposed to be taken against any partner of a firm under
this Program shall be limited to such partner without any negative
implications on other partner(s) of the firm or on the firm as a whole.

4.3.5. The Investigation Committee and the Council shall proceed on the
recommendation of the Committee referred to in sub clause 4.3.1(e) in
accordance with the provisions of investigation envisaged in the Ordinance
and Bye-laws of the Institute.

4.3.6. The Committee shall ensure that its decision pursuant to clause 4.3.1(e) is
communicated in writing to the firm or member through Director of Practice
Review within fifteen days from the date of such decision.

4.3.7. Each Member covered in a review shall be awarded 20 CPD credit hours
after the successful completion of the Practice Review.

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PART V - RETENTION AND CONFIDENTIALITY

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5.1. File Retention
5.1.1. Any file created during a Practice Review shall be retained until the Practice
Review has been deemed complete by the Committee and thereafter for a
period of twelve months after the conclusion of Practice Review Year in
which the Practice Review was completed. However, if a firm or a member
makes an appeal under this Program against the decision of the Committee,
all files and documentation relevant for the Practice Review shall be
retained by the Firm, and the Institute till the case attains finality or for a
period of twelve months as described above whichever is later.
5.1.2. Notwithstanding clause 5.1.1, the Institute shall at minimum retain
information required for administrative purposes till next Practice Review
date of the firm, including:

a) evidence that a Practice Review has been completed;

b) documentation identifying the firm or the member and client files

reviewed;

c) documentation that may assist in future review planning; and

d) any other documentation as required by the Committee.

5.2. Confidentiality

5.2.1. A member of the Committee, or any person acting on its behalf, or the
Director of Practice Review or any Reviewer, or a staff member of
Directorate of Practice Review, shall not make use of or disclose the
contents of any report, files, working paper files, books, documents or other
material reviewed, or any confidential information concerning the affairs of
any firm or a member or of its clients obtained in the course of a Practice
Review to anyone, except to the Director or Directorate of the Practice
Review, the Committee, the Appellate Forum and or the Council as
required under this Program.

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PART VI - Appeal

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6.1 - Appellate Forum
6.1.1 Two Appellate Forums (the Forum) shall be constituted by the Council under the
Program to provide grievance mechanism to firms or members not satisfied with
the outcome of the Practice Review, one each for the Northern and Southern
Regions.

6.1.2 The Forum shall comprise three members appointed by the Council, of which two
shall be from the members of the Institute who have been past members of the
Council and have served at-least one full term in the Council and one shall be a
person who has exercised the powers of, or has been, a judge of a High Court or
who is or has been, an advocate of a High Court and is qualified to be a Judge of a
High Court. Such person shall also act as Chairman of the Forum.

6.1.3 The members of the Committee or of the Council shall not be nominated on the
Forum. A cooling off period of two years shall be required for eligibility to be
appointed at the Forum for the former members of the Committee or of the Council.

6.1.4 The quorum for a meeting of the Forum shall be the majority of its members. In
case the Chairman is unable to attend the meeting, the members present shall
decide amongst themselves a person to act as Chairman at that meeting.

6.1.5 The term of the Forum shall be three years from the date of its constitution.

6.1.6 No member of the Forum shall serve for more than two consecutive terms of two
years each.

6.1.7 A member retiring after serving two consecutive terms shall be eligible for
reappointment, after two years from the date of retirement.

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6.2. Filing of Appeal
6.2.1 Any member or a firm aggrieved by the decision of the Committee shall have a right
to appeal before the Forum within 30 days of such decision having been
communicated to the member or the firm, on the prescribed form and accompanied
by such documents and information as may be prescribed.

6.2.2 The Forum shall, at the request of the applicant, or on its own motion give a personal
hearing to the aggrieved member or authorized representative of the firm, who
must either be a lawyer or a member of the Institute.

6.2.3 The Committee shall authorize any of its members or any representative to attend
the hearing on its behalf.

6.2.4 Director of Practice review and Head of Legal is also entitled to attend the hearing
of the Forum, if he so desires;

6.2.5 The Forum shall have the power to confirm, vary or reverse the original
recommendation/decision of the Committee that has been appealed. The Forum
can also remand the case to Director of Practice Review with directions;

6.2.6 The decision of the Forum shall be final unless challenged before the High Court
under Clause 6.2.9, a copy of the decision shall be communicated to the appellant
with a copy to the Director of Practice Review and the Chairman of the Committee.
6.2.7 The Forum shall preferably dispose of the appeal within 60 days from the date of
filing of appeal.

6.2.8 During the process of appeal, the Forum can grant relief to the firm or member
suspending the decision of the Committee.

6.2.9 Any person aggrieved by the order of the Appellate Forum shall file an appeal before
the High Court, within sixty days of the date of such order.

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PART VII - MISCELLANEOUS

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7.1 Failure to Comply

7.1.1 Failure to comply with any provision of this Program, including a failure to comply
with any decision or requirement of the Committee, can be referred to the
Investigation Committee of the Institute under Section 20A of the Chartered
Accountants Ordinance, 1961.

7.2 Amendments/ Removal of Difficulties/ Effective Date

7.2.1 This Program may be altered or amended, by the Council.

7.2.2 The Council may provide guidance on matters not specifically covered under this
Program.

7.2.3 This Program shall become effective from October 1, 2020.

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PART VIII – SUPPORT BY THE INSTITUTE

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8.1 TECHNICAL HELPLINE
A Technical Helpline has been established on the Institute’s website, where members
can post their queries in relation to financial reporting, auditing or ethics related
matters. Guidance will also be provided through this helpline in respect of matters
arising from the provisions of this Program. The Helpline may be accessed by visiting
the Institute’s website http://www.icap.net.pk/your-technical-helpline .

8.2 FREQUENTLY ASKED QUESTIONS (FAQs)

1. When the firm shall be subject to Practice Review under this program?
A firm, already in practice on the effective date of this program and in which at least
one member is engaged in providing Audit, Assurance or Related Services shall
be subject to Practice Review at any time after one year of effective date of this
program.

2. Whether the program is applicable to all CA firms?

The program applies to all firms providing Audit, Assurance or Related Services
conducted under legal and financial reporting framework as applicable in Pakistan.

3. Whether the Audit, Assurance or Related Services provided to the private

limited companies by the firm shall be subject to Practice Review?
Yes, the program is applicable to all types of private limited companies.

4. Why this program is being implemented in the presence of QCR program?

QCR is a voluntary program undertaken by CA firms who intend to conduct audits
of financial statements of listed and certain specified non-listed companies.

The Institute is a member of the International Federation of Accountants (IFAC)

and there are Statements of Membership Obligations (SMOs) of IFAC which are

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 needed to be complied with by its member bodies. SMO-1 of IFAC requires a
mandatory quality assurance review system to be in place for firms performing
audits of financial statements by virtue of which it should be ensured that the firms
and its partners are in compliance with the quality standards for professional
assignments

5. Does this program conflict with the existing QCR program of the Institute?
No, this program shall not be applicable to the firms which have attained
satisfactory QCR rating under the QCR program of the Institute.

6. What if the name of any firm is removed from the list of firms having
satisfactory QCR rating under the QCR program of the Institute?
If the name of the firm is removed from the list of firms having satisfactory QCR
rating, that firm shall be subject to this Program if it does not apply for review under
the QCR Program within one year from the date of removal from the list of firms
having satisfactory QCR rating.

7. What are the penalties for non-compliance with this program?

The Members’ Affairs Committee may with the approval of three-fourth majority of
its members, refer the case to the Investigation Committee of the Institute where
the member has continuously failed to implement the action plans and improve the
standard of work after two Re-Reviews. The Members’ Affairs Committee may also
report to the Investigation Committee any other matter relating to non-compliance
with professional standards.

8. What if the firm is restricted to produce any document to the Institute due to
absence of consent from its client?
The Committee shall not refer a matter to the Investigation Committee or Secretary
solely for the failure of a firm or a member, to produce a document subject to a
valid claim of legal privilege that has not been waived.

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9. In case of any difficulty arising on the professional matters, whether any
guidance will be provided by the Institute?
“Technical Helpline” is available on the Institute’s website for providing guidance
on professional and other matters relating to the Program. Members can post their
queries on the Helpline.

10. Whether an appeal can be filed against the decisions made under this
program?
There will be two Appellate Forums to provide grievance mechanism to firms or
members who are not satisfied with the outcome of the Practice Review, one each
for the Northern and Southern Regions.

11. What is the timeline to file an appeal before the Appellate Forum?
Any member or a firm aggrieved by the decision of the Committee shall have a
right to appeal before the Forum within 30 days of such decision having been
communicated to the member or the firm.

12. Whether the decision of the Appellate Forum can be challenged?

The decision of the Forum shall be final unless challenged before the High Court
under Clause 6.2.9.

13. What is meant by ‘Related Services’?

Related Services comprise of ‘Compilation’ and ‘Agreed Upon Procedures’
engagements. There are separate International Standards on Related Services
(ISRS) for each of the above engagements. These standards explain the auditor’s
professional responsibilities along with the form and content of the reports that the
auditor issues in connection with such engagements.

The objective of an agreed-upon procedures engagement is for the auditor to carry

out procedures of an audit nature to which the auditor and the entity and any
appropriate third parties have agreed and to report on factual findings.

The objective of a compilation engagement is for the accountant to use accounting

expertise, as opposed to auditing expertise, to collect, classify and summarize
financial information.

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