Ordinance X of 1961 · 24 pages
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THE CHARTERED ACCOUNTANTS ORDINANCE, 1961
PREAMBLE.
CHAPTER I.
PRELIMINARY
1. Short title, extend and commencement.
2. Definitions.
CHAPTER II.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OFPAKISTAN
3. Incorporation of the institute.
4. Entry of names in register.
5. Associates and fellows.
6. Certificate of practice.
7. Members to be known as Chartered Accountants.
8. Disabilities.
CHAPTER III.
COUNCIL OF THE INSTITUTE
9. Constitution of the Council of the Institute.
10. Mode of election to the Council.
11. Nomination in default of election.
12. President and Vice President or Vice-Presidents.
13. Resignation of membership and casual vacancies.
14. Duration and dissolution of Council.
15. Functions of the council.
16. Staff, remuneration and allowances.
17. Finances of the Institute.
CHAPTER IV.
REGISTER OF MEMBERS
18. Register
19. Removal from the Register.
Page 1 of 24
CHAPTER V.
REGIONAL COMMITTEES
20. Constitution and functions of Regional Committees.
CHAPTER VA.
MISCONDUCT
20 A. Facts, etc, to be laid before the Investigation Committee.
20 B. Enquiry by the Investigation Committee.
20 C. Member or student not found guilty.
20 D. Orders by the Council if member found guilty.
20 E. Orders by the Council if student found guilty.
20 F. Hearing of case by the High Court.
20 G. Effect of inquiry
20 H. Council and Investigation Committee to have powers of civil court.
20 I. Publication of findings and decisions.
20 J. Return of certificate.
20 K. Appeal and revision.
CHAPTER VI.
PENALTIES
21. Penalty for falsely claiming to be a member etc.
22. Penalty for using name of the Council awarding degree of chartered accountancy,etc.
23. Companies not to engage in accountancy.
24. Unqualified persons not to sign documents.
25. Sanction to prosecute.
CHAPTER VII.
MISCELLANEOUS
26. Maintenance of branch offices.
27. Power to make byelaws.
28. Powers of Federal Government to direct byelaws to be made or to make or amend byelaws
29. References to registered accountants, etc to be construed as references to chartered
accountants
Page 2 of 24
30. Amendment of section 144 of the Companies Act, 1913 (VII of 1913),
31. [Saving.]
SCHEDULE I.
[See section 20A]
SCHEDULE II.
[See section 20A and 20D]
SCHEDULE III.
[See section 20A and 20E]
Page 3 of 24
THE CHARTERED ACCOUNTANTS ORDINANCE, 1961
ORDINANCE No. X OF 1961
[10th March, 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 and 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 in pleased to make and
promulgate the following Ordinance:—
CHAPTER I.
PRELIMINARY
1. Short title, extend and commencement.—(1) This Ordinance my be called the
Chartered Accountants Ordinance, 1961.
(2) It extends to the whole of Pakistan 1[and shall apply to all members, wherever they may
be].
(3) It shall come into force on such date2 [3[Federal Government] may, by notification in
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;
4
[(cc) “fellow” means a fellow member of the Institute];
(d) “Institute” means the Institute of Chartered Accountants of Pakistan on
stituted 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 thisOrdinance;
(g) “registered accountant” means any person who has been enrolled on the
Registerof Accountants maintained by the 3[Federal Government] under the
Auditors'Certificates Rules, 1950;
4
[(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 examinations 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.
1
Added by the Chartered Accountant (Amdt.) Ordinance, 1983 (15 of 1983), s. 2.
2
The 1st July, 1961, see Gaz. of P., 1961, Ext., p. 1025.
3
Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government”. 4Ins. by Ord. 15 of 1983, s. 3.
Page 4 of 24
(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 matters 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 the Institute who is salaried employee 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 1[students].
__________
CHAPTER II.
THE INSTITUTE 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;
1
Subs. by the Chartered Accountants (Amdt.) Ordinance, 1983 (15 of 1983), s. 3, for “articled clerks”.
Page 5 of 24
(iii) any person who has passed such other examination and completed such
other training outside Pakistan as is recognized by the 1[Federal
Government] or the Council with the approval of the 1[Federal
Government] as being equivalent to the examination and training
prescribed for members of the Institute:
2
[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
Auditors Certificates Rules, 1950, and provided further that such person passes the examination or
completes training 3[.]
4
* * * * * * *
(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 sub-section (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), 4[(iii), 5[and
(iv)]] of sub- section (1) shall have his name entered in the Register on application being made and
granted in the prescribed manner and on payment of the prescribed fee, which shall not exceed
rupees five hundred in any case.
(4)The 1[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.
1
Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government”.
2
Subs. by the Chartered Accountants (Amdt.) Ordinance, 1983 (15 of 1983) s. 4, for the Proviso.
3
Subs. by the Chartered Accountants (Amdt.) Ordinance, 1968 (4 of 1968) s. 2, for the semi-colon, which was previously amended by Ord. 24 of
1962, s. 2, for full-stop. 4Cl.(v) omitted ibid.
4
Subs. by the Chartered Accountants (Amdt.) Ordinance, 1962 (24 of 1962), s. 2, for clauses (iii) and (iv).
5
Subs. by the Chartered Accountants (Amdt.) Act 1968, (4 of 1968), s. 2, for “clauses (iv) and (v)”.
Page 6 of 24
1
[(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 Act, 1913 (VII of 1913) , unless
he has obtained from the Council a certificate of practice 2[ . ]
3
* * * * * * *
(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
Accountants and no member using such designation shall use any other designation whether in
addition thereto or in substitution therefore:
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 behalf by the Council, or any other qualification that he may possess, or to prohibit 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
undercharged insolvent; or
(iv) having been discharged of 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 professional 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 1[Federal Government] has, by an
order in writing, removed the disability; or
1
Subs. by the Chartered Accountants (Amdt.) Ordinance, 1983 (15 of 1983), s. 5, for sub-section (3).
2
Subs. ibid., s.6, for the colon.
3
Proviso omitted ibid.
Page 7 of 24
(vi) has been removed from the membership of the Institute on being found on
inquiry to have been guilty of such professional 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.
___________
CHAPTER III.
COUNCIL OF THE INSTITUTE
9. Constitution of the 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.
1
[(2) The Council shall be composed of the following persons, namely :—
(a) the prescribed number of persons, 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.]
2
* * * * * * *
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.
3
[(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 this 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 :
1
Subs. by the Chartered Accountants (Amdt.) Ordinance, 1983 (15 of 1983), s. 7, for sub-section (2).
2
Sub-section (3) omitted ibid.
3
Subs. ibid., s. 8. for sub-section (2).
Page 8 of 24
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.
1[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 fail to elect the required number of members which
they are empowered under that section to elect from a zone of a constituency, 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 members a President and one or, if the Council so decides, 2[more than one] Vice-Presidents
of the Institute, who shall also be the President and Vice-President or Vice Presidents of the
Council) respectively and so often as the office or offices of the President or the Vice-President
or Vice- Presidents become vacant, the Council shall choose from among its members a President
or a Vice- President or vice-Presidents, as the case may be 3[.]
4
* * * * * * *
(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 5[:]
6
[Provided that, notwithstanding the expiry of the term of their office, the President and the
Vice- President 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. Resignation of membership and casual vacancies.—(1) Any member of the Council
may at 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.
1
Subs. by the Chartered Accountants (Amdt.) Ordinance 1983 (15 of 1983) s. 9, for section 11.
2
Subs. by the Chartered Accountants (Amdt.) Ordinance, 1970 ( 9 of 1970), s. 2, for “two”.
3
Subs. by Ord. 15 of 1983 . s. 10, for colon.
4
Proviso omitted ibid.
5
Subs. ibid., for full-stop.
6
Proviso added ibid.
Page 9 of 24
(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 excuse from three consecutive meetings of
the Council, or if his name is, for any cause, removed from the Register under the provisions of
section19.
(3) A casual vacancy in the Council shall be filled by fresh election from the
constituency concerned or by nomination by the 1[Federal Government] as the case may be,
and the person 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 2[Council].
(4) No act done by the Council shall be called in question on the ground merely of the
existence of any vacancy in, 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 3[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 [:]4
5
[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
until a new Council is constituted in accordance with the provisions of this 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 provisions,
the 6[functions] of the Council shall include—
(a) the examination of candidates for enrolment and the prescribing of fees
therefore;
(b) the regulation of the engagement and training of 7[students];
(c) the prescribing of qualifications for entry in the Register;
(d) the recognition of the foreign qualifications and training for purposes of
enrolment;
(e) the granting or refusal of certificates of practice under this Ordinance;
1
Subs. by F.A.O., 1975, Art. 2 and Table for “Central Government”.
2
Subs. by the Chartered Accountants (Amdt.) Ordinance, 1983 (15 of 1983), s. 11, for certain words.
3
Subs. ibid., s. 12, for “three”.
4
Subs. ibid., for full-stop.
5
Proviso added ibid.
6
Subs. by the Chartered Accountants (Amdt.) Ordinance, 1983 (15 of 1983), s. 13, for “duties”.
7
Subs. ibid., for “articled and audit clerks”.
Page 10 of 24
(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, examines and other person;
(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 power over the members and servants of
the Institute as may be prescribed;
(m) the formation of such Standing Committees as may be prescribed; and
1
[(mm) the constitution of an Investigation Committee consisting of such members as
may be prescribed;].
(n) such other powers as may be conferred on the Council by the 2[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 officers 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 officers and
servants of the Council.
2
(e) with the previous sanction of the [Federal Government] fix the
allowances of the
President, Vice President or Vice-Presidents and other members of
the Council and members of its Committees.
1
Cl (mm) ins. by the Chartered Accountants (Amdt.) Ordinance, 1983 (15 of 1983), s. 13.
2
Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government”.
Page 11 of 24
17. Finances of the 1[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 1[Institute] and
out of which shall be met all expenses and liabilities properly incurred by the 1[Institute].
_____________
CHAPTER IV.
REGISTER OF MEMBERS
18. Register.—(1) The Council shall maintain in 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 the Institute as on the first day of July of each year, and shall, if requested to do so
by any such members, 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 different fees may be prescribed for
associates and for fellows.
19. Removal from the Register.—2[(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 that 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 anytime 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 3[; or]
1
Subs. by F.A.O., 1975, Art. 2 and Table for “Central Government”.
2
Re-numbered by the Chartered Accountants (Amdt.). Ordinance, 1983 (15 of 1983), s. 15
3
Subs. ibid., s. 15, for full-stop.
Page 12 of 24
1
[(e) against whom an order has been passed under this Ordinance removing him from
the membership of the Institute.];
2
[(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 fee 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.]
CHAPTER V.
REGIONAL COMMITTEES
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 3[prescribed] under clause (a) of sub-section (2) of section 9.
(2) The Regional Committees shall be constituted in such manner and exercise functions as
may be prescribed.
______________
4
[CHAPTER VA.
MISCONDUCT
20A. 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.
20B. Enquiry by the Investigation Committee.—(1) If on considering the facts or
complaint laid before it under section 20A, 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.
1
Cl. (e) added ibid.,
2
New sub-section (2) added ibid.,
3
Subs. by the Chartered Accountants (Amdt.) Ordinance 1983 (15 of 1983), ibid., s. 16, for “specified by the Federal Governmen t”.
4
Chapter VA ins. ibid., s. 17.
Page 13 of 24
(2) A member of the Institute or a student whose conduct is in question shall be given
an opportunity of being heard and, such member or student so desires, the Investigation Committee
shall permit such member or student to be represented before it by a counsel 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.
20C. Member or student not found guilty.—If, on receipt of the report under section
20B, 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.
20D. Orders by the Council if member found guilty.—(1) If, on receipt of the report
under section 20B, 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, 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.
20E. Orders by the Council if student found guilty.—If, on receipt of report under
section 20B, 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.
20F. Hearing of case by the High Court.—On receipt of a reference under section
20D, 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:—
Page 14 of 24
(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
(d) refer the case to the Council for further inquiry and report.
20G. Effect of inquiry.—For the purposes of this Chapter, “member of the Institute”
includes a person who was a member of the Institute on the date of the alleged misconduct but has
ceased to be a member of the Institute at the time of inquiry for any reason.
20H. Council and Investigation Committee to have powers of civil court.—The
council and the Investigation Committee shall, for the purpose of an inquiry under this Chapter, be
deemed to be a civil court and shall have the same powers as are vested in a civil court under the
Code of Civil Procedure, 1908 (V of 1908) in respect of the following mattes, namely:—
(a) summoning and enforcing the attendance of any person and examining him on
oath;
(b) the discovery and production of any document; and
(c) receiving evidence on affidavits.
20I. Publication of findings and decisions.— Where a member of the Institute or a
student is found guilty, the Council shall cause the findings and decisions given against such
member or student, as the case may be, to be published in the official Gazette and in such journal
or journals as the Council may deem fit:
Provided that, where the Council deems necessary, it may omit the name of such member
or student from publication.
20J. Return of certificate.—(1) Where the name of member of the Institute is removed
from the Register, whether for a specified period or permanently, every certificate of membership
or practice held by such member shall be deemed to be cancelled from the date of the order
removing his name from the Register and shall stand so cancelled for the said period or, as the case
may be, permanently.
(2) The certificate referred to in sub-section (1) shall be returned by the member of the
Institute to the Secretary of the Council who shall, in the case of a member whose name is
removed from the Register for a specified period, return the certificate to the member on the
expiration of the said period.
20K. Appeal and revision.—(1) Any member of the Institute aggrieved by an order of
the council imposing on him any of the penalties referred to in section 20D may, within sixty days
of the date of communication of such order to him, prefer an appeal to the High Court.
(2) The High court may, on its own motion or on an application made to it, call for the
record of any case in which the Council has made an order under section 20D and may—
(a) confirm, modify or set aside the order;
Page 15 of 24
(b) impose any penalty or set aside, reduce, confirm or enhance the penalty
imposed by the order;
(c) remit the case to the Council for such further inquiry as the High Court may
consider proper in the circumstances of the case; or
(d) pass such other order as it may deem fit:
Provided that no order of the Council shall be modified or set aside unless the Council has
been given an opportunity of being heard and no order imposing or enhancing a penalty shall be
passed unless the person concerned has also been given an opportunity of being heard.]
___________
CHAPTER VI.
PENALTIES
21. Penalty for falsely claiming to be a member, etc.— Any person who—
(i) not being a member of the Institute,__
(a) represents that he is a member of the Institute; or
(b) uses the designation Chartered Accountant, 1* * *; or
(ii) being a member of the Institute, but not having a certificate of practice,
represents that he is in practice or practices as a chartered accountant,
shall be punishable on first conviction with fine which may extend to one
thousand rupees, and on any subsequent conviction with imprisonment
which may extend to six months or with fine which may extend to five
thousand rupees, or with both.
22. Penalty for using name of the Council awarding degree of chartered
accountancy, etc.—
(1) No person shall—
(i) use a name or a common seal which is identical with the name or the
common seal of the Institute or so nearly resembles it as to deceive or as is
likely to deceive the public;
(ii) award any degree, diploma or certificate or bestow any designation which
indicates or purports to indicate the possession or attainment of any
qualification or competence possessed by a person by virtue of his being a
member of the Institute; or
(iii) seek to regulate in any manner whatsoever the profession of chartered
accountants.
1
The certain words omitted by the Chartered Accountants (Amdt.) Ordinance, 1983 (15 of 1983) s. 18.
Page 16 of 24
(2) Any person contravening the provisions of sub-section (1) shall, without prejudice to
any other proceedings which may be taken against him, be punishable with fine which may extend
on first conviction to one thousand rupees, and on any subsequent conviction with imprisonment
which may extend to six months, or with fine which may extend to five thousand rupees, or with
both.
23. Companies not to engage in accountancy.—(1) No company, limiting the liability
of its members, whether incorporated in Pakistan or elsewhere shall practice as chartered
accountants [:]1
2
[Provided that the members of the Institute shall be permitted to form into a limited
company solely for practicing as “Management Consultants”.]
(2) If any company contravenes the provisions of sub-section (1) then, without prejudice to
any other proceedings which may be taken against the company, every director, manager,
secretary and any other officer thereof, who is knowingly a party to such contravention, shall be
punishable with fine which may extend on first conviction to one thousand rupees and on any
subsequent conviction to five thousand rupees.
24. Unqualified persons not to sign documents.— (1) No person other than a member
of the Institute shall sign any document on behalf of a chartered accountant in practice or a firm of
such chartered accountants in his or its professional capacity.
(2) Any person contravening the provisions of sub-section (1) shall, without prejudice to
any other proceedings which may be taken against him, be punishable with fine which may extend
on first conviction to one thousand rupees, and on any subsequent conviction with imprisonment
which may extend to six moths, or with fine which may extend to five thousand rupees, or with both.
5. Sanction to prosecute.—No person shall be prosecuted under this Ordinance except
on a complaint made by or under the order of the Council or of the 3[Federal Government].
_________
1
Subs. by the Chartered Accountants (Amdt.) Ordinance, 1983 (15 of 1983), s. 19, for full-stop.
2
Proviso added ibid.
3
Subs. by F.A.O., 1975, Art. 2 and Table for “Central Government”.
Page 17 of 24
CHAPTER VII.
MISCELLANEOUS
26. Maintenance of branch offices.—(1) Where a chartered accountant in practice or a
firm of such chartered accountants has more than one office 1** each one of such offices shall be
in the separate charge of a member of the Institute 2[who ordinarily resides in the area served by
such office].
Provided that the Council may in suitable cases exempt any chartered accountant in practice
or a firm of such chartered accountants from the operation of this sub-section.
(2) Every chartered accountant in practice or a firm of such chartered accountants
maintaining more than one office shall send to the Council a list of offices and the persons in
charge thereof and shall keep the Council informed of any change in relation thereto.
27. Power to make bye-laws.—(1) The Council may, by notification3 in the official
Gazette, make bye-laws for the purpose of carrying out the object of this Ordinance and a copy of
such bye- laws shall be sent to each member of the Institute.
(2) In particular, and without prejudice to the generality of the foregoing power, such
bye-laws may provide for all or any of the following matters:—
(a) the standard and conduct of examinations under this Ordinance;
(b) the qualifications for the entry of the name of any person in the Register;
(c) the conditions under which any examination or training may be treated as
equivalent to the examination and training prescribed for the membership of
the Institute;
(d) the conditions under which any foreign qualifications may be recognized;
(e) the manner in which and the conditions subject to which applications for
entry in the Register may be made;
(f) the fees payable for membership of the Institute and the annual fees payable
by associates and fellows of the Institute in respect of their certificates;
(g) the manner in which elections to the Council and the Regional Committees
may be held;
(h) the particulars to be entered in the Register;
(i) the functions of Regional Committees;
4
[(j) the training of the students and suspension of the training of students for
misconduct or for any other cause;]
1
The words in Pak istan omitted by the Chartered Accountant (Amdt.) Ordinance, 1983, (15 of 1983) s. 20.
2
Added ibid.
3
For the Chartered Accountants bye-laws, 1961, see Gaz of P., 1961 Ext., pp10 26-1060.
4
Subs. by the Chartered Accountants (Amdt.) Ordinance 1983 (15 of 1983) s. 21 for (j)
Page 18 of 24
(k) the regulation and maintenance of the status and standard of professional
qualifications of members of the Institute;
1
[(kk) the issue of directives to the members of the Institute on professional matter;]
(l) carrying out of research in accountancy;
(m) the maintenance of a library and publication of books and periodicals on
accountancy;
(n) the management of the property of the Council and the maintenance and
audit of its accounts;
(o) the summoning and holding of meetings of the Council, the times and
places of such meetings, the conduct of business thereat and the number of
members necessary to form a quorum;
(p) the powers, duties and functions of the President and the Vice-President
or Vice-Presidents of the Council;
(q) the functions of the Standing and other Committees and the conditions
subject to which such functions shall be discharged;
(r) the terms of office, and the powers, duties and functions of the Secretary
and other officers and servants of the Council;
(s) the rules of professional and other misconduct, and the exercises of
disciplinary powers; and
(t) any other matter which is required to be or may be prescribed under this
Ordinance.
(3) All bye-laws made by the Council under this Ordinance shall be subject to the condition
of previous publication and to the approval of the 2[Federal Government].
(4) Notwithstanding anything contained in sub-section (1) and (2), the 2[Federal
Government] may frame the first bye-laws for the purposes mentioned in this section, and such
3
bye-laws shall be deemed to have been made by the Council, and shall remain in force from the
date of the coming into force of this Ordinance, until they are amended, altered or revoked by the
Council.
28. Powers of 2[Federal Government] to direct bye -laws to be made or to make or
amend bye - laws.__ (1) Where the 2[Federal Government] considers it expedient so to do, it may,
by order in writing, direct the Council to make any bye-law or to amend or revoke any bye-law
already made within such period as it may specify in this behalf.
(2) If the Council fails or neglects to comply with such order within the specified period,
the 2[Federal Government] may make or amend, with or without modifications, or revoke, any bye-
laws, directed to be made, amended or revoked by that order.
1
Cl. (kk) added ibid.
2
Subs. by F.A.O., 1975, Art. 2 and Table for “Central Government”.
3
For such bye-laws see Gaz. of p 1961 Ext, P.1026.
Page 19 of 24
29. Reference to registered accountants, etc. to be construed as references to
chartered accountants.—Any reference to a chartered accountant or a registered accountant or a
certified or qualified auditor in any other law or in any document whatsoever shall be construed as a
reference to a chartered accountant in practice within the meaning of this Ordinance.
30. [Amendment of section 144 of the Companies Act, 1913 (VII of 1913),] Omitted by
the Federal Laws (Revision and Declaration) Ordinance, 1981, (XXVII of 1981), s. 3, and Sch., II.
31. [Savings.] Omitted by the Federal Law (Revision and Declaration) Ordinance, 1981
(XXVII of 1981), s. 3, and Sch., II.
1[SCHEDULE-I
[See Section 20A]
PART I
Professional misconduct in relation to chartered accountants in practice.
A Chartered Accountant in practice shall be deemed to be guilty of professional
misconduct, if he—
(1) allows any person to practice in his name as a chartered accountant, unless such person is
also a chartered accountant in practice and is in partnership with, or employed by, him;
(2) pays or allows or agrees to pay or allow, directly or indirectly, any share, commission
or brokerage in the fees or profits of his professional business to any person other than a member of
the Institute or a partner or a retired partner or the legal representative of a deceased partner;
Explanation.—In this clause, “partner” includes a person residing outside Pakistan with
whom a chartered accountant in practice has entered into partnership which is not in contravention
of clause (4) of this part;
(3) accepts or agrees to accept any part of the profits of the professional work of a
lawyer, auctioneer, broker, or other agent who is not a member of the institute;
(4) places his professional service at the disposal of, or enters into partnership with,
an unqualified person or person in a position to obtain business of the nature in which
chartered accountants engage by means which are not open to a member of the Institute:
Provided that this paragraph shall not be construed as prohibiting a member from practicing
in a country outside Pakistan in association with a person who is entitled under the laws in force
in that country to perform functions similar to those a member of the Institute is entitled to
perform in Pakistan;
(5) solicits clients for professional work either directly or indirectly by circular,
advertisement, personal communication or interview or by any other means;
(6) advertises his professional attainments or services, or uses any designation or expression
other than chartered accountant on professional documents, visiting cards, letter head or sign boards
unless it be a degree of a University established by law in Pakistan or recognized by the Federal
Government or the Council;
1
Subs. by F.A.O. 1975, Art. 2 and Table, for “Central Government”.
2
Added by Chartered Accountant (Amdt.). Ordinance, 1983 (15 of 1983) s. 22.
Page 20 of 24
(7) accepts a position as auditor previously held by another member of the Institute without
first communicating with him in writing;
(8) accepts an appointments as auditor of a company without first ascertaining from it
whether the requirements of sub-section (6) of section 144 of the Companies Act, 1913 (VII of
1913), in respect of such appointment have been duly complied with;
(9) charges or offers to charge, accepts or offers to accept in respect of any
professional employment fees which are based on a percentage of profits or which are
contingent upon the findings or results of such employment, except in cases which are permitted
under any law for the time being in force or by an order of the Government;
(10) Engages in any business or occupation other than the profession of chartered
accountants unless permitted by the Council so to engage:
Provided that nothing contained herein shall disentitle a chartered accountant from
being a director of a company, unless he or any of his partners is interested in such company as an
auditor;
(11) accepts a position as auditor previously held by some other chartered accountant in
such conditions as to constitute undercutting;
(12) allows a person not being a member of the Institute or a member not being his partner to
sign on his behalf or on behalf of his firm, any balance sheet, profit and loss account, report or
financial statement; or
(13) gives estimates of future profits for publication in a prospectus or otherwise or certifies
for publication the statements of average profits over a period of two years or more without, at the
same time, stating the profits or losses for each year separately.
PART 2
Professional misconduct in relation to members engaged in management consultancy.
A member of Institute engaged in management consultancy shall be deemed to be guilty
of professional misconduct, if he—
(1) advertises or solicits for work or issues any circular, calendar or publicity material;
(2) issues brochures, except to existing clients or in response to an unsolicited request;
(3) uses designatory letters indicating qualifications of the directors and members of the
company on letter head, note-papers, or professional cards excepts as provided in clause (6) of Part
1 of this Schedule;
(4) refers to associate firms of Chartered Accountants on his letter head or professional
cards or announcements;
(5) adopts a name or associates himself as a partner or director of a firm or a company
whose name is indicative of its activities;
(6) uses the term chartered accountants for his management consultancy firm or company;
Page 21 of 24
(7) shares profits of remuneration in a manner contrary to clauses (2) and (3) of Part 1 of
this Schedule, except when he associates with non-members as stated in clause (10) of this part;
(8) or his partner in any firm accepts auditing, taxation, or other conventional accounting
work from any client introduced to him for management consultancy services by the client’s
own professional accountant;
(9) uses the term “Management Consultant (s)" except in respect of a company engaged
in management consultancy field;
(10) associates with non-members for the rendering of various management services except
as long as such non-member observes the bye-laws and code of professional ethics of the Institute;
(11) does not communicate with the existing professional accountant or consultant, if a
member of the Institute, informing him of the special work he has been asked to undertake in the
event of an introduction for management consultancy work other than through the existing
professional accountant; or
(12) under the guise or through the medium of a company or firm does anything which he is
not allowed to do as an individual.
PART 3
Professional misconduct in relation to members of the Institute in service.
A member of the Institute (other than a member in practice) shall be deemed to be guilty
of professional misconduct, if he, being an employee of any company, firm or person,—
(1) pays or allows or agrees to pay directly or indirectly to any person any share in
the emoluments of the employment undertaken by the member;
(2) accepts or agrees to accept any part of fees, profits or gains from a lawyer,
chartered accountant or broker engaged by such company, firm or person or agent or
customer of such company, firm or person by way of commission or gratification; or
(3) discloses confidential information acquired in the course of his employment except as
and when required by law or except as permitted by the employer.
PART 4
Professional misconduct in relation to members of the Institute generally.
A member of the Institute, whether in practice or not, shall be deemed to be guilty of
professional misconduct, if he—
(1) includes in any statement, return or form to be submitted to the Institute any
particulars knowing them to be false;
(2) not being a fellow styles himself as a fellow;
(3) does not supply the information called for by the Institute or does not comply with
the requirements asked to be complied with or does not comply with any of the directives issued
or pronouncements made by the Council or any of its Standing Committees;
Page 22 of 24
(4) generally, willfully maligns the Institute, the Council or its Committee to lower their
prestige, or to interfere with performance of their duties in relation to himself or others;
(5) has been guilty of any act or default discreditable to a member of the Institute; or
(6) contravenes any of the provisions of the Ordinance or the bye-laws made thereunder.
SCHEDULE II
(See section 20A and 20D)
PART 1
Professional misconduct in relation to chartered accountants in practice requiring action by a
High Court.
A chartered accountant in practice shall be deemed to be guilty of Professional
misconduct, if he__
(1) discloses information acquired in the course of his professional engagement to any
person other than his client, without the consent of his client or otherwise than as required by any
law for the time being in force;
(2) certifies or submits in his name or in the name of his firm a report of an examination
of financial statement unless the examination of such statements and the related records has been
made by him or by a partner or an employee in his firm or by another chartered accountant in
practice;
(3) permits his name or the name of his firm to be used in connection with any estimates
of earnings contingent upon future transactions in a manner which may lead to the belief that
he vouches for the accuracy of the forecast;
(4) expresses his opinion on financial statements of any Business or any enterprise in
which he, his firm or a partner in his firm has a substantial interest, unless he discloses his interest in
his report;
(5) fails to disclose a material fact known to him which is not disclosed in a financial
statement, but disclosure of which is necessary to ensure that the financial statement is not
misleading;
(6) fails to report a material mis-statement known to him to appear in a financial statement
with which he is concerned in a professional capacity;
(7) is grossly negligent in the conduct of his professional duties;
(8) fails to obtain sufficient information to warrant the expression of an opinion or his
exceptions are sufficiently material to negate the expression of an opinion; or
9) fails to keep moneys of his client in a separate banking account or fails to use such moneys
for purposes for which they are intended.
Page 23 of 24
PART 2
Professional misconduct in relation to members engaged in management consultancy requiring
action by a High Court.
A member engaged in management consultancy shall be deemed to be guilty of
professional misconduct, if he—
(1) discloses information acquired in the course of his professional engagements to any
person other than his client, without the consent of his client or otherwise than as required by any
law for the time being in force;
(2) is grossly negligent in the conduct of his professional duties; or
(3) fails to keep moneys of his client in a separate banking account or fails to use such
moneys for purposes for which they are intended.
____________
SCHEDULE III
(See Section 20A and 20E)
Professional misconduct in relation to the students of the Institute.
A student of the Institute shall be deemed to be guilty of professional misconduct, if he—
(1) contravenes any of the provisions of the Ordinance or the bye-laws made thereunder;
(2) does not supply the information called for by the Institute;
(3) does not comply with any requirements which he is asked by the Institute to comply with;
(4) does not comply with any of the directives issued by the Council or any of its committees;
(5) discloses confidential information acquired in the course of his training except as and
when required by law or except as permitted by his principal;
(6) includes in any statement or form to be submitted to the Institute, any particulars
knowing them to be false; or
(7) has been guilty of any act or omission discreditable to a student of the Institute.
__________
Page 24 of 24
Source: Pakistan Code, Ministry of Law and Justice (pakistancode.gov.pk). Text on this page is reproduced verbatim from the official PDF and is provided for reference only. For the authoritative version, always consult the source document or a current reported edition.
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