Law: Companies Ordinance, 1984

Section: 255

Companies Ordinance (XLVII of 1984)---Ss. 255, 260 & 476---Companies (General Provisions and Forms) Rules, 1985, Rr. 17-A & 35---Chartered Accountants Ordinance (X of 1961), Ss. 20-A & 20-D---Conducting audit by auditor in violation of International Accounting Standard---Effect---Certain irregularities in observance of International Accounting Standard were found, on examination of accounts prepared by applicant/ auditor who audited accounts of a company---Applicant/auditor in response to show-cause notice issued to him admitted the lapse committed ,by him--- Institution after hearing applicant, alongwith other fines etc. imposed punishment by suspending his membership for period of five years under S.20-D of Chartered Accountants Ordinance, 1961--­Validity---Maintaining other fines and punishments imposed upon applicant/ auditor, period of suspension of his member­ship was reduced from five years to one year by the High Court. ORDER SHABBIR AHMED, J.---The appellant, a Member of respondent No.1 audited accounts of respondent No.4 for the year 2001 which was scrutinized by respondent No.2. On examination of the accounts prepared by the appellant, certain irregularities in observance of International, Accounting Standard (IAS) and complying with recruitments of Fourth Schedule of the Companies Ordinance were found in the following terms:-- -- The Company did not disclose the basis on which the financial statements are prepared and reasons why the enterprise is considered to be a going concern as per para.234 of IAS 1 (Presentation of Financial Statements). -- The Company has not recognized the borrowing cost on bank borrowings as an expense as required by para.7 of IAS 23 (Borrowing Costs). -- Disclosure of interest rate risk has not been made in the accounts contrary to requirements of paras.56, 66 and 77 of IAS 32 (Financial Instruments; Disclosure and Presentation). -- The Company did not disclose accounting policies in the accounts as per para.20 of IAS 1 (Presentation of Financial Statements). Statement of changes in equity and Cash Flow Statement have not been prepared and annexed to the accounts contrary to the requirements as per para. 7 of…

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