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April 30, 2008

Pakistan profession falls short of potential

The accounting profession in Pakistan is bringing in far below its potential fee income, according to PricewaterhouseCoopers Pakistan partner Syed Mohammad Shabbar Zaidi.

Zaidi, who is also president of the South Asia Federation of Accountants, estimated the profession does not earn more than PKR2.5 billion ($39.8 million) per year. “My view is that the potential is more than PKR10 billion, but we don’t have sufficient people and we don’t have sufficient number of firms with the capacity to earn that kind of money,” he told IAB.

Zaidi explained there is also insufficient capacity among firms to train and develop enough professionals. He said the Pakistani profession is split between the Big Four and micro practices. “The middle layer of firms has not developed in the way they should have developed,” he said.

The Pakistani accounting profession has traditionally struggled to attract the brightest students, who have instead chosen to pursue careers such as engineering or medicine. “So generally the average and the below average are opting for the accounting side,” Zaidi said.

Today, the field of competing qualifications has widened to include MBAs, which Zaidi said have a more glamorous reputation than the CA (chartered accountant) qualification.

There are two roots to the accounting profession’s failure to attract the brightest students, according to Zaidi. The first is the profession not marketing itself properly and the second is inadequate facilities among firms to train and develop staff.

A task force – of which Zaidi is president – has been formed in Pakistan to address education and training within firms. Zaidi said one suggestion for attracting more quality students has been to target people who have already completed MBAs. The Institute of Chartered Accountants of Pakistan (ICAP) is looking to revamp its course to give the CA qualification a distinct edge over other business management programmes.

Another problem the accountancy profession is facing is that the brightest graduates are not willing to work at trainee rates. To solve this, ICAP is looking at introducing field training outside the profession so trainees can be paid market rates while still being educated by the institute.

One more issue the profession faces is harnessing the potential of investment advisory, which Zaidi identified as the only area in which “we have got an edge”. He said the investment advisory business should belong to the accounting profession rather than investment bankers.

“It is our business because we know the business… we have learned the law and the tax. So the lead should be coming from our side and they should help us, but unfortunately the lead is coming from their side and we are helping them,” he said.

Zaidi also believes monotonous rules-based auditing standards are driving staff away from the profession.

Carolyn Canham

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