SECP says role of audit firm also under scrutiny
Move comes as regulator looks to tighten screws on illegal trading activities
Move comes as regulator looks to tighten screws on illegal trading activities. PHOTO:FILE
KARACHI:
More drama continued to unfold in the case of the country’s stock market and the recent crackdown by the apex regulator as the Securities and Exchange Commission of Pakistan (SECP) sought information from six auditing firms to assess the quality of their audit.
SECP moves to unfreeze Hekmatyar accounts
The move comes as the regulator looks to tighten the screws on brokerage houses and also “critically reviews the role of statutory auditors of brokerage houses”.
In a handout released on Friday, the SECP said that it has observed that some auditing firms are acting as statutory auditors for a large number of brokers.
“One of these firms had audited the accounts of three brokers who recently defaulted,” stated the handout. “As part of the ongoing inquiry against recently defaulted brokers, the conduct of the said auditing firm is also under scrutiny.
“Additionally, the SECP has started looking at financials of brokers audited by this firm.”
SECP Chairman Zafar Hijazi emphasised on statutory auditors to perform their duties in conformity with the law otherwise they would have to face dire consequences.
“The SECP would not shy away from initiating any stern legal actions against those auditing firms that fail to perform their functions with utmost diligence and in accordance with the law,” he said.
The role of the SECP has recently been under the limelight after three brokerage firms defaulted and other houses were also accused of being involved in illegal trading activities. In-house financing was among the major issue.
Hijazi, in a briefing to the Senate standing committee on Wednesday, said the brokers were a powerful bunch, capable of bringing the KSE-100 Index - a benchmark for market performance - down when they wanted. However, he said the SECP would ensure that “abnormal trading activities”, which he believes is the reason for the recent bullish run at the bourse, would not be tolerated.
Investor Education: SECP conducts awareness seminar
The index has retreated over 2.5% since hitting a record high in January with brokers, along with the trading community, worried over future actions, if any, taken by the regulator in the wake of his recent statements.
Published in The Express Tribune, March 11th, 2017.
More drama continued to unfold in the case of the country’s stock market and the recent crackdown by the apex regulator as the Securities and Exchange Commission of Pakistan (SECP) sought information from six auditing firms to assess the quality of their audit.
SECP moves to unfreeze Hekmatyar accounts
The move comes as the regulator looks to tighten the screws on brokerage houses and also “critically reviews the role of statutory auditors of brokerage houses”.
In a handout released on Friday, the SECP said that it has observed that some auditing firms are acting as statutory auditors for a large number of brokers.
“One of these firms had audited the accounts of three brokers who recently defaulted,” stated the handout. “As part of the ongoing inquiry against recently defaulted brokers, the conduct of the said auditing firm is also under scrutiny.
“Additionally, the SECP has started looking at financials of brokers audited by this firm.”
SECP Chairman Zafar Hijazi emphasised on statutory auditors to perform their duties in conformity with the law otherwise they would have to face dire consequences.
“The SECP would not shy away from initiating any stern legal actions against those auditing firms that fail to perform their functions with utmost diligence and in accordance with the law,” he said.
The role of the SECP has recently been under the limelight after three brokerage firms defaulted and other houses were also accused of being involved in illegal trading activities. In-house financing was among the major issue.
Hijazi, in a briefing to the Senate standing committee on Wednesday, said the brokers were a powerful bunch, capable of bringing the KSE-100 Index - a benchmark for market performance - down when they wanted. However, he said the SECP would ensure that “abnormal trading activities”, which he believes is the reason for the recent bullish run at the bourse, would not be tolerated.
Investor Education: SECP conducts awareness seminar
The index has retreated over 2.5% since hitting a record high in January with brokers, along with the trading community, worried over future actions, if any, taken by the regulator in the wake of his recent statements.
Published in The Express Tribune, March 11th, 2017.