An interview with President ICAP Riaz A. Rehman Chamdia
Imran Zakir
Imran Zakir from ‘The Financial Daily International’ interviewed President ICAP, Riaz A. Rehman Chamdia, recently. Following is the rendering of this interview. – Editor
Q. Briefly share your career progression; please tell us briefly about your journey to success?
A. Currently, I am serving as the President of the Institute of Chartered Accountants of Pakistan. I qualified as a Chartered Accountant in 1993 and serving as Country Leader, Audit & Assurance (Designate) in EY Ford Rhodes, Chartered Accountants, a member firm of Ernst & Young Global. I have been elected as a member of the Council for the terms of 2013-17 and 2017-21 and severed as Vice President for the term 2013-14. I have also served as Chairman of the Southern Regional Committee, Accounting Standards Committee and Examinations Committee. I have also served as a Technical Advisor on IPSAS Board of IFAC for three years term.
Q. What are the core functions of ICAP?
A. ICAP is a national leader and regulatory body for the profession of Accountancy in the country. The core functions of ICAP are examination, education & training, service to its members and students and exercise of disciplinary proceedings against its members and students. Overall ICAP’s objective is to continue to build a strong Chartered Accountancy profession and to lead the profession in all key financial markets to promote sustainable growth and build business confidence and trust.
Q. What are the biggest challenges facing the profession right now?
A. I really think that it will be the implementation of the new auditors reporting standards. It’s a most significant change in decades, but now it’s up to the CA firms to be bold. I am afraid if this just becomes boiler plate – particularly in the area of Key Audit Matters – then it could be a setback, rather than a step forward. The real challenge is to make sure that those Key Audit Matters are tailored to the company and provide useful insight to the shareholders and other stakeholders.
Q. The last decade had been to some degree a bit of a make or break for the auditing profession. Do you think it’s managed to gain back some of the trust it lost during the financial crisis and audit failures – And if so, how?
A. I think in the recent past IAASB laid the ground work for rebuilding trust and the new auditors reporting standards are the centre piece of that. It’s so important that significant changes are made in the Auditor’s Report, because it’s the part of the auditors’ work that goes out in to the public domain. Stakeholders and regulators have been asking more from auditors. We have been asked to share more of the information that we gain based on our privileged position as auditors – to provide more insight. Thoughtful implementation of the new reporting standards should go a long way to regain some of that trust and confidence.
Q. What changes do you envision in the upcoming years in the profession of Chartered Accountancy?
A. Last few decades can be termed as decades of changed realities. The changing realities in business world are demanding new approach and orientation for doing business. Entrepreneurs have either re-aligned or are in the process of re-aligning their approach towards business and are expecting professionals to assist them in charting future of their businesses. To develop diversified Chartered Accountants, ICAP is planning to re-design its curriculum in order to keep pace with the changed demands and expectations of the market and other stakeholders and to maintain high quality education and examination standards.
A continuing challenge for ICAP is to address an uncertainty threatening the profession all over the world due to advancement of technology to a level where human intervention in book keeping and financial reporting would be reduced to bare minimum. I am referring to Artificial Intelligence (AI) that would be extensively used in next generation accounting soft wares. With the tendency of rule based financial reporting standards as against principle based standards, the use of AI would be economical, easier and effective. Similarly there are many other technological developments, like internet of things, machine learning, data analytics and block chain that are going to directly impact the profession.
Moreover, the increased demand for accountants and financial managers for public sectors poses another integral challenge. Trend of public sector governance through limited companies has increased, consequently creating demand for financial managers to attain diversified skills set, for which accounting profession has to really gear up and add value.
Q. Kindly share your views regarding job opportunities for CAs in Pakistan.
A. By and large all our CAs are gainfully employed in practice, industry and public sector. Almost every organization considers hiring a CA as a good investment and appreciates the skills of CAs. Demand is growing every day. An interesting fact about CA is that they are required in all stages of the economic and business cycle i.e. when economy is growing CAs help organizations decide when and where to invest and when the economy is in a decline, CAs guide organizations to become more efficient in resource utilization. Quite a few of our students start getting job offers before they qualify.
Q. Word of advice for the youngsters aspiring to pursue Chartered Accountancy.
A. Chartered Accountancy is an excellent profession in my opinion. To excel in this field, one should be dedicated, hardworking and committed to achieve their goal. The qualification is now changing from being limited only to accountancy and finance, to a much more versatile profession which will present a lot of opportunities to brighten up one’s future. Chartered Accountancy prepares you to not only be a business partner, but to manage and drive the organization. My advice is; don’t limit yourself to a finance only, broaden your horizon, be open to diversification and obtain an understanding of whatever organization you work in, so that the journey to the top is unhindered.
Q. How many CAs ICAP is producing annually? Are we keeping pace with the current market demand?
A. On an average we are producing around 500 CAs annually. At the moment, I don’t have the exact statistics, but roughly speaking, there is a dearth of chartered accountants in the market and the demand outnumbers supply. We need lot more CAs than we are producing now. However, the exact demand of the market is difficult to determine as the future growth of the profession will depend on the growth of the industry, economy, trade and overall GDP growth of the country. The amount of unemployment in chartered accountancy is very minimal if not zero. Almost all CAs are gainfully employed in the local as well as international markets. If the economy is further strengthened and more businesses are established, the demand for all kinds of professionals including CAs will increase. Around 25% of our members work abroad in countries like UAE, Saudi Arabia, United Kingdom, Canada, America, Australia and rest of the Middle Eastern countries etc. So we need to take into view the global business environment.
Q. With increasing interest among students in the field of chartered accountancy how do you see the employability of CAs in Pakistan in the near future? Don’t you think they will face the same fate as was of other business graduates?
A. The position has slightly changed now as only recently we have started marketing our qualification aggressively. Contrary to the past practice, where no advertisement was published in the press for CA qualification, there are proper advertisements in the press now. Similarly, those who get good grades are duly given coverage in the media and they get awards and medals too. Besides, we visit various schools and colleges all over the country to promote our education and the brand. The response is encouragingly good and people are not reluctant to join the profession due to lack of knowledge or with a fear of lack of scope in the market. A good number of students are now opting for CA qualification.
However, I disagree that our members will meet the same fate which was unfortunately faced by graduates of other professions. The reason – our strength lies in our practical training. In order to be a CA, it is mandatory for a student to work for three to four years with a firm of chartered accountants or an industrial organization where they have the exposure to audit large banks and financial institutions, airlines, shipping companies, manufacturing industries and service sector etc. This practical experience gives them an edge over their counterparts in other fields. We don’t see such a situation arising for our CAs and they will Insha Allah continue to do well in the market with the same excellence. This is also a testimony to our rate of unemployment which is almost next to nil.
While the IAASB is working diligently on improving trust in the auditing domain, it’s imperative to note that there are parallels in the medical field. For instance, the introduction and widespread use of drugs like generic Amoxicillin was a result of comprehensive research and vetting to gain public trust. Just as auditors are required to be transparent and insightful, medical practitioners and pharmaceutical companies are expected to provide reliable information about medications to ensure public health and safety.
Q. What are the new trends in the Accounting and Auditing profession and where do you see the ICAP 5 years down the line?
A. Accountancy is an ever-thriving profession which will continue to progress in the coming years. There remains a growing need for documentation, accountability and transparency in business reporting and operations, due to which the profession will refine and develop in the next 5 years.
I also believe that because of diversified and complex nature of businesses, the need for specialization within accounting itself would ultimately bring radical improvement in the quality of Chartered Accountancy in Pakistan.