CHARTERED ACCOUNTANTS ORDINANCE, 1961
CHAPTER I – PRELIMINARY
Short title extent and commencement
CHAPTER II – THE INSTITUTION OF CHARTERED ACCOUNTANTS OF PAKISTAN
Incorporation of the Institute
Entry of names in Register
Associates and Fellows
Certificate of practice
Embers to be known as Chartered Accountants
CHAPTER III – COUNCIL OF THE INSTITUTE
Constitution of Council of the Institute
Mode of election to the Council
Nomination in default of election
President and Vice-President or Vice-Presidents
Registration of membership and casual vacancies
Duration and dissolution of Council
Functions of the Council
Staff, remuneration and allowances
Finances of the [Institute]
CHAPTER IV – REGISTER OF MEMBERS
Removal from the Register
CHAPTER V – REGIONAL COMMITTEES
Constitution and functions of Regional Committees
CHAPTER V-A – MISCONDUCT
Facts, etc., to be laid before the Investigation Committee
Enquiry by the Investigation Committee
Member or student not found guilty
Orders by the Council if member found guilty
Orders by the Council if students found guilty
Hearing of case by the High Court
Effect of inquiry
Council and Investigation Committee to have powers of Civil Court
Publication of findings and decisions
Return of certificate
Appeal and revision
CHAPTER VI – PENALTIES
Penalty for falsely claiming to be a member, etc
Penalty for using name of the council, awarding degree of Chartered accountancy, etc.
Companies not to engage in accountancy
Unqualified persons not to sign documents
Sanction to prosecute
CHAPTER VII – MISCELLANEOUS
Maintenance of branch offices
Power to make bye-laws
Powers of Federal Government to direct bye-laws to be made or to make or amend bye-laws
Reference to registered accountants, et., to be construed as references to Chartered Accountants
Amendment of Section 144 of the Companies Act, 1913
CHARTERED ACCOUNTANTS ORDINANCE, 1961
(X of 1961)
An Ordinance to make provision for the regulation of the profession of accountants
Whereas it is expedient to make provision for the regulation of the profession of accountants and for that purpose to establish an institute of Chartered Accountants.
Now, Therefore, in pursuance of the Proclamation of the seventh day of October, 1958, and in exercise of all powers enabling him in that behalf the President is pleased to make and promulgate the following Ordinance:–
1. Short title extent and commencement.– (1) This Ordinance may be called the Chartered Accountants Ordinance, 1961.
(2) It extends to the whole of Pakistan, [and shall apply to all members, wherever they may be]
(3) It shall come into force on such date as the Federal Government may, by notification into the official Gazette, appoint in this behalf.
2. Definitions.– (1) In this Ordinance, unless there is anything repugnant in the subject or context,–
(a) “Associate” means an associate member of the institute;
(b) “Chartered” accountant” means a person who is a member of the Institute;
(c) “Council” means the Council of the Institute;
[(cc) “Fellow” means a fellow member of the Institute;
(d) “Institute” means the Institute of Chartered Accountants of Pakistan constituted under this Ordinance;
(e) “Prescribed” means prescribed by the bye-laws of the institute;
(f) “Register” means the Register of the Members of the Institute maintained under this Ordinance;
(g) “Registered accountant” means any person who has been enrolled on the Register of Accountants maintained by the Federal Government under the Auditors” Certificates Rules, 1950;
(gg) “Student” means a person who is or has been a trainee under a training contract with a member of the Institute entitled to train students under this Ordinance and the bye-laws made thereunder and has not successfully completed the examination of the Institute and
(h) “Year” means the period commencing on the first day of July of any year and ending on the thirtieth day of June of the succeeding year.
(2) A member of the Institute shall be deemed to be in practice”, when individually or in partnership with chartered accountants in practice, he, in consideration of remuneration received or to be received;-
(i) Engages himself in the practice of accountancy, or
(ii) Offers to perform or performs services involving the auditing, or verification of financial transactions, books, accounts, or records or the preparation, verification or certification of financial accounting and related statements or holds himself out to the public as an accountant; or
(iii) Renders professional services or assistance in or about mattes of principle or detail relating to accounting procedure or the recording, presentation or certification of financial facts or data; or
(iv) Renders such other services as, in the opinion of the Council are or may be rendered by a chartered accountant in practice; and the words to be in practice” with their grammatical variations and cognate expressions shall be construed accordingly.
Explanation. An associate or a fellow of the institute who is salaried of a chartered accountant in practice or a firm of such chartered accountants shall, notwithstanding such employment, be deemed to be in practice for the limited purpose of the training of student.
The Institution Of Chartered Accountants Of Pakistan
3. Incorporation of the Institute.– (1) All persons whose names are entered in the Register at the commencement of this Ordinance and all persons who may hereafter have their names entered in the Register under the provisions of this Ordinance, so long as they continue to have their names borne on the said Register, are hereby constituted a body corporate by the name of the Institute of Chartered Accountants of Pakistan, and all such persons shall be known as members of the Institute.
(2) The Institute shall have perpetual succession and a common seal and shall have power to acquire, hold and dispose of property, both movable and immovable, and shall by its name sue and be sued.
4. Entry of names in Register.– (1) Any of the following persons shall be entitled to have his name entered in the Register, namely,-
(i) Any person who is registered accountant at the commencement of this Ordinance;
(ii) Any person who has passed such examination and completed such training as may be prescribed;
(iii) Any person who has passed such other examination and completed such other training outside Pakistan as is recognized by the Federal Government or the Council with the approval of the Federal Government as being equivalent to the examination and training prescribed for members of the Institute:
Provided that, in the case of any such person, the Council may, with the approval of the Federal Government, impose such conditions as it may deem fit.
(iv) Any person domiciled in Pakistan, who at the commencement of this Ordinance is studying for any foreign examination and is at the same time undergoing training, whether within or without Pakistan, or, who, having passed, such foreign examination, is at the commencement of this Ordinance undergoing training whether within or without Pakistan:
Provided that any such examination or training was recognized before the commencement of this Ordinance for the purpose of conferring the right to be registered as an accountant under the Auditor ‘s Certificates Rules, 1950, and
Provided further that such person passes the examination or completes the training.
(2) The name of every person belonging to the class mentioned in clause (i) of sub-section (1) shall be entered in the Register without the payment of any entrance fee or any application being made in that behalf and shall, for the purpose of subsection (1) of Section 3, be deemed to have been so entered at the commencement of this Ordinance.
(3) Every person belonging to any of the classes mentioned in clauses (ii), (iii) [and (iv)] of sub-section (1) shall have his name entered in the Register on application being made and granted into the prescribed manner and on payment of the prescribed fee, which shall not exceed rupees five hundred in any case.
(4) The Federal Government shall take such steps as may be necessary for the purpose of having the names of all persons belonging to the class mentioned in clause (i) of sub-section (1) entered in the Register.
5. Associates and Fellows.– (1) The members of the Institute shall be of two classes designated respectively as associates and fellows.
(2) Every person shall, on his name being entered in the Register become an associate member of the Institute and be entitled to use the letters A.C.A. after his name to indicate that he is an associate member of the Institute of Chartered Accountants.
(3) An associate member who has been in practice for at least five years or an associate member of the institute for a period of not less than ten years shall, on payment of the prescribed fee, have his name transferred to the Register of Fellows, of the Institute and, on having his name transferred to the Register of Fellows, he shall be entitled to use the letters F.C.A. after his name to indicate that he is a fellow member of the Institute.
Explanation. For the purpose of this sub-section, two years as a non-practicing associate shall be counted as one year of practice of such associate.
6. Certificate of practice.– (1) No member of the Institute shall be entitled to practice as an auditor of a public company as defined in the Companies Ordinance, 1984 (XLVII of 1984), unless he has obtained from the Council a certificate of practice;
(2) Every such member shall pay such annual fee for his certificate as may be prescribed, and such fee shall be due on the first day of July in each year.
7. Members to be known as Chartered Accountants.-Every member of the Institute in practice shall, and any other member may, use the designation of a Chartered Accountant and no member using such designation shall use any other designation, whether in addition thereto or in substitution therefor:
Provided that nothing contained in this section shall be deemed to prohibit any such person from adding any other description or designatory letters to his name, if entitled thereto, to indicate membership of such other institute of accountancy, whether in Pakistan or elsewhere as may be recognized in this behalf by the Council, or any other qualification that he may possess, or to prodhit a firm, all the partners of which are members of the institute and in practice, from being known by its firm name as Chartered Accountants.
8. Disabilities.-Notwithstanding anything contained in Section 4, a person shall not be entitled to have his name entered in or borne on the Register if he-
(i) Has not attained the age of twenty-one years at the time of his application for the entry of his name in the Register; or
(ii) Is of unsound mind and stands so adjudged by a competent Court; or
(iii) Is an undischarged insolvent; or
(iv) Having been discharged or insolvency, has not obtained from the Court a certificate stating that his insolvency was caused by misfortune without any misconduct on his part; or
(v) Has been convicted by a competent Court, whether within or without Pakistan, of an offence involving moral turpitude and punishable with transportation or imprisonment or of an offence, not of a technical nature, committed by him in his prepositional capacity unless in respect of the offence committed he has either been granted a pardon or, on an application made by him in this behalf, the Federal Government has, by an order in writing removed the disability; or
(vi) Has been removed from the membership of the Institute on being found on inquiry to have been guilty of such prepositional or other misconduct, as may be prescribed:
Provided that a person who has been removed from the membership of the Institute for a specified period, shall be entitled to have his name entered in the Register after the expiry of such period.
COUNCIL OF THE INSTITUTE
9. Constitution of Council of the Institute.– (1) There shall be a Council of the Institute for the management of the affairs of the Institute and for discharging the functions assigned to it under this Ordinance.
(2) The Council shall be composed of the following persons, namely:-
(a) The prescribed number of person, not being less than twelve, elected from the two prescribed regional constituencies by the members of the Institute belonging to such constituencies from among such members of at least five years” standing the number of members to be elected from each such constituency being such as may be prescribed:
Provided that each such regional constituency shall consist of two zones, to be known as Zone “A” and Zone “B”, having the prescribed limits:
Provided further that at least one member shall be elected from each of the aforesaid Zones; and
(b) Not more than four persons nominated by the Federal Government.
10. Mode of election to the Council.– (1) Elections under clause (a) of sub-section (2) of Section 9 shall be conducted in the prescribed manner.
(2) Where any dispute arises regarding any such election, the matter shall be referred by the Council to a Tribunal appointed by the President of the Council in his behalf and the decision of such Tribunal shall be final;
Provided that in case the President of the Council-in-office is himself a party to such dispute or is unwilling to make such appointment, the immediate past president of the Council shall appoint the Tribunal.
Provided further that no such reference shall be made except on an application made to the Council by an aggrieved party, within thirty days from the date of the declaration of the result of the election.
(3) The expenses of the Tribunal shall be borne by the Institute.
11. Nomination in default of election.– (1) If the members of the institute referred to in clause (a) of sub-section (2) of section 9 fall to elect the required number of members which they are empowered under that section to elect from a zone of a consistency, the members declared elected from that zone shall nominate the number of members not elected who shall be deemed to be members of the Council as if they had been duly elected.
(2) Where the members of the institute referred to in clause (a) of sub-section (2) of Section 9 do not at all elect any member, the Council shall nominate the required number of members from the respective regional constituencies and such members shall be deemed to be the members of the Council as if they had been duly elected.
12. President and Vice-President or Vice-Presidents.– (1) The Council shall elect from among its members a President and one or, if the Council so decides, [more than one] Vice President of the institute, who shall also be the President and Vice-President or Vice-Presidents of the Council respectively and so often as the offence or offices of the President or the Vice-President or Vice-Presidents becomes vacant, the Council shall choose from among its members a President or a Vice-President or Vice-Presidents, as the case may be;
(2) The President shall be the Chief Executive authority of the Council.
(3) The President and the Vice-President or Vice-Presidents shall hold office for a period of one year from the date on which they are chosen but so as not to extend beyond their term of office as members of the Council, and, subject to their being members of the Council at the relevant time, they shall be eligible for re-election for a total period not exceeding three consecutive years:
Provided that, notwithstanding the expiry of the term of their office, the President and the Vice – Presidency or Vice-Presidents of the Council, shall continue to hold office till such time as their successors are elected.
(4) On the dissolution of the Council, the President of the Council at the time of such dissolution shall continue to hold office and discharge such administrative and other duties as may be prescribed until such time as a new President shall have been elected and shall have taken over charge of his duties.
13. Registration of membership and casual vacancies.– (1) Any member of the Council may at any time resign his membership by writing under his hand addressed to the President and the seat of such member shall become vacant when such resignation is notified in the official Gazette.
(2) A member of the Council shall be deemed to have vacated his seat if he is declared by the council to have been absent without sufficient exercise from three consecutive meetings of the Council, or if his name is, for any cause, removed from the Register under the provisions of Section 19.
(3) A casual vacancy in the Council shall be filled by fresh election from the constituency concerned or by Nomination by the Federal Government, as the case may be, and the persons elected or nominated to fill the vacancy shall hold office until the dissolution of the Council:
Provided that no election shall be held to fill a casual vacancy occurring within six months prior to the date of the expiry of the duration of the Council, but such a vacancy may be filled by nomination by the Council.
(4) No act done by the Council shall be called in question on the ground merely of the existence of any vacancy, or defect in the Constitution of the Council.
14. Duration and dissolution of Council.-– (1) The duration of the Council constituted under this Ordinance shall be [four] years from the date of the first meeting of the Council on the expiry of which it shall stand dissolved and a new Council constituted in accordance with the provisions of this Ordinance.
Provided that the duration of the Council existing immediately before the commencement of the Chartered Accountants (Amendment) Ordinance, 1983, shall be three years.
(2) Notwithstanding the expiry of the duration of the Council it shall continue to function unit a new Council is constituted in accordance with the provisions of the Ordinance, and upon such constitution, the Council so functioning shall stand dissolved.
15. Functions of the Council.– (1) The duty of carrying out the provisions of this Ordinance shall be vested in the Council.
(2) In particular, and without prejudice to the generality of the foregoing provision, the [functions] of the Council shall include—
(a) The examination of candidates for enrolment and the prescribing or fees therefore;
(b) The regulation of the engagement and training of [student].
(c) The prescribing of qualifications for entry in the Register;
(d) The recognition of foreign qualifications and training for purposes of enrolment;
(e) The granting or refusal of certificates of practice under this Ordinance;
(f) The maintenance and publication of a Register of persons qualified to practice as chartered accountants;
(g) The levy and collection of fees from members, examinees and other persons;
(h) The removal of names from the Register and the restoration to the Register of names which have been removed;
(i) The regulation and maintenance of the status and standard of professional qualifications of the members of the Institute;
(j) The carrying out, by financial assistance to persons other than members of the Council or in any other manner, of research in accountancy;
(k) The maintenance of a library and publication of books and periodicals relating to accountancy;
(l) The exercise of such disciplinary powers over the members and servants of the institute as may be prescribed;
(m) The formation of such Standing Committees as may be prescribed;
(mm) The constitution of an investigation Committee consisting of such members as may be prescribed]; and
(n) Such other powers as may be conferred on the Council by the Federal Government.
16. Staff, remuneration and allowances.-For the efficient performance of its duties, the Council may—
(a) Appoint a full-time Secretary who may also, if so decided by the Council, act as Treasurer;
(b) Appoint such other offices and servants as it deems necessary;
(c) Require and take from the Secretary or from any other officer or servant of the Council such security for the due performance of his duties, as the Council considers necessary;
(d) Fix salaries, fees, allowances and other conditions of service of the officer and servants of the Council;
(e) With the previous sanction of the Federal Government, fix the allowances of the President, Vice-President or Vice-Presidents and ether members of the council and members of its Committees.
17. Finances of the [Institute].-There shall be established a fund under the management and control of the Council into which shall be paid all monies received by the [Institute] and out of which shall be met all expenses and liabilities properly incurred by the [Institute].
REGISTER OF MEMBERS
18. Register.– (1) The Council shall maintain into the prescribed manner a Register of the Members of the Institute.
(2) The Register shall include the following particulars about every member of the Institute, namely,-
(a) His full name, date of birth, domicile, residential and professional addresses;
(b) The date on which his name is entered in the Register;
(c) His qualifications;
(d) Whether he holds a certificate of practice; and
(e) Any other particulars which may be prescribed.
(3) The Council shall cause to be published, in such manner as may be prescribed, a list of members of its institute as on the first day of July of each year, and shall, if requested to do so by any such member, send to him a copy of such list.
(4) Every member of the Institute shall, on his name being entered in the Register, pay such annual membership fee, as may be prescribed and deferent fees may be prescribed for associates and for fellows.
19. Removal From The Register.– (1) The Council may remove from the Register the name of any member of the Institute—
(a) Who is dead, or
(b) From whom a request has been received to the effect; or
(c) Who has not paid any prescribed fee required to be paid by him; or
(d) Who is found to have been subject at the time when his name was entered in the Register, or who at any time thereafter has become subject, to any of the disabilities mentioned in Section 8, or who for any other reason has ceased to be entitled to have his name borne on the Register, or
(e) Against whom an order has been passed under this ordinance removing him from the membership of the Institute;
(2) The Council may, on an application made to it by a person whose name has been removed from the Register for a specified period, restore his name if he is otherwise eligible to such membership:
Provided that he shall have paid before such restoration the admission fee for the year during which his name is restored, and, if his name has been removed under clause (b) or clause (c) of sub-section (1), all arrears on account of annual membership for subject to maximum of five years of annual membership fee according to the scale applicable to him.
(3) The restoration of the name of a member shall be notified in the official Gazette and in such journal or journals as the Council thinks desirable and shall also be communicated in writing to the person concerned.
20. Constitution and functions of Regional Committees. — (1) For the purpose of advising and assisting it on matters concerning its functions, the Council may constitute such Regional Committees as and when it deems fit for one or more of the regional constituencies that may be [prescribed under clause (a) of sub-section (2) of Section 9.
(2) The Regional Committees shall be constituted in such manner and exercise such functions as may be prescribed.
20-A. Facts, etc., to be laid before the Investigation Committee. — (1) The Secretary of the Institute shall, and any member or any aggrieved person may, lay before the Investigation Committee any fact indicating that-
(a) A member of the institute has prima facie been guilty of any professional misconduct specified in Schedule I or Schedule II; or
(b) A student has prima facie been guilty of any professional misconduct specified in Schedule III.
(2) Where a complaint is received by the Institute that any member of the Institute or student is guilty of professional misconduct referred to in sub-section (1), the complaint shall, with relevant and necessary facts, be laid before the investigation committee.
20-B. Enquiry by the investigation Committee.– (1) If on considering the facts or complaint laid before it under Section 20-A, the Investigation Committee is of opinion that such facts or complaint require investigation, it shall, after giving a notice to the member of the Institute or student whose conduct is in question, hold an inquiry.
(2) A member of the Institute or student whose conduct is in question shall be given an opportunity of being heard and, if such member or student so desires, the Investigation Committee shall permit such member or student to be represented before it by a council or by a member of the Institute.
(3) After the conclusion of inquiry, the Investigation Committee shall report the result of the inquiry to the Council.
20-C. Member or student not found guilty. – If, on receipt of the report under Section 20-B, the Council finds that the member of the Institute or student, as the case may be, is not guilty of any professional misconduct, it shall record its finding accordingly and direct that the proceedings or, as the case may be, the complaint be filed.
20-D. Orders by the Council if member found guilty.-(1) If, on receipt of the report under Section 20-B the Council is of opinion that the member of the Institute has been guilty of any professional misconduct specified in Schedule I, it may, after affording such member an opportunity of being heard, either personally or through counsel or another member of the Institute, make any of the following orders, namely:-
(a) Reprimand or warn such member;
(b) Impose such penalty as it may deem necessary not exceeding one thousand rupees; and
(c) Remove the name of such member from the Register for a period not exceeding five years:
Provided that, where it appears to the Council that the case is one in which the name of such member ought to be removed from the Register for a period exceeding five years or permanently, he shall not make any order but shall refer the case to the High Court with its recommendations thereon.
(2) If the Council is of opinion that the member of the Institute is guilty of a professional misconduct specified in Schedule II, it shall refer the case to the High Court with its recommendations thereon.
20-E. Orders by the Council if students found guilty. – If, on receipt of report under Section 20-B, the Council is of opinion that the student is guilty of any professional misconduct specified in Schedule III, it shall, after affording such student an opportunity of being heard, either personally or through a counsel or a member of the Institute, make any of the following orders, namely:-
(a) Reprimand or warn the student; or
(b) Suspend the student from training, or, extend the period of training of the student, for such period as it may deem fit; or
(c) Debar the student from training.
20-F. Hearing of case by the High Court.-On receipt of a reference under Section 20-D, the High Court shall fix a date for the hearing of the reference and cause notice of the date so fixed to be given to the member of the Institute and the Council, and shall, after affording such member and the Council, either personally or through counsel or a member of the Institute, an opportunity of being heard, make any of the following orders, namely:-
(a) Direct that the proceedings be filed, or dismiss the complaint, as the case may be;
(b) Reprimand such member;
(c) Remove him from membership of the Institute either permanently or for such period as it may deem fit; or