Securities and Exchange Commission of Pakistan (SECP) Chairman Dr Tariq Hassan has urged across-the-board adoption of the International Financial Reporting Standards (IFRS) in order to bring transparency in the corporate sector of Pakistan.
"What we seek in transparency is the ability of an investor to "see through" a company's financial statements and the true results of its operations. Transparency requires that companies follow Generally Accepted Accounting Principles (GAAP) in a manner that assures consistency and comparability.
The best way of achieving this is to observe and adopt IFRS in its true spirit," Tariq said, while speaking at a seminar on IFRS, organised by the Institute of Cost and Management Accountants of Pakistan (ICMAP) here on Tuesday.
The SECP chairman expressed the need of concerted efforts to address lack of transparency and accountability in the corporate sector as well as the financial reporting requirements emanating from increased globalisation of the capital markets. The accountancy profession, he said, had to appropriately respond to the increasing demand for information from a range of stakeholders in the corporate sector.
He said that Pakistan had adopted 38 out of 41 International Accounting Standards issued by the International Accounting Standards Board for application by the listed companies. Besides, he said that several other initiatives have been taken to improve financial reporting and transparency by Pakistani companies.
"The Code of Corporate Governance, issued by the SECP in March 2002, lays down a valuable mechanism for ensuring transparency and accountability in the affairs of companies, while the SECP carries out regular examination of financial statements of listed companies and non-banking financial corporations (NBFCs) to ensure adequacy of disclosures, monitor compliance with applicable laws and regulations and discourage unauthorised transactions, he added.
Tariq urged accountability of those at the helm of corporate affairs, the need of which has emanated from the changing and increasingly complex business environment, particularly after the onset of WTO regime and technological revolution.
As with all other sectors, the accountancy profession in Pakistan will also have to gear up to these challenges by improving upon the work quality, ethical standards and general practice of their profession in order to obtain international recognition and mobility. "Most importantly, we need to contribute, internationally, to the standard setting process," he added.
Earlier, Abbas Ali Mirza, Partner, Deloitte Touche Tohmatsu, gave a detailed presentation on IFRS.-PR
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