ISLAMABAD, February 15: Securities and Exchange Commission of Pakistan in its recent meeting has withdrawn the 1990 Vegetable Ghee and Cooking Oil Companies (Cost Accounting Records) Order, and issued a circular requiring appointment of QCR-rated auditors for performance of cost audit. The SECP has been entrusted with a multifaceted role of ensuring accountability and transparency and at the same time enhancing the ease of doing business. It, therefore, constantly evaluates its regulatory regime to achieve the aforesaid delicate balance.
Vegetable Ghee and Cooking Oil Companies (Cost Accounting Records) Order required that the companies in this sector maintain cost records. These records were further required to be audited under the provisions of the 1984 Companies Ordinance. A review of the sector revealed that practically local industry imports the bulk of refined, bleached and deodorized cooking oil and markets it subsequent to packaging.
The manufacturing constitutes only negligible part of the producing process hence the cost records/audits did not add value to the understanding of the financials of such companies. It was also noted that businesses in ghee and cooking oil sector mostly operate in other than company form. At the same time, in order to strengthen vigilance on cost auditors reporting on the cost accounts, the SECP has introduced quality control mechanism for cost auditors. Thereby, the SECP now requires all public companies to appoint only cost and management accountants or chartered accountants as their cost auditors, which hold satisfactory rating from the Institute of Cost and Management Accountants of Pakistan (ICMAP) or the Institute of Chartered Accountants of Pakistan (ICAP).-NNI
