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ICAP — Institute of Chartered Accountants of Pakistan

Accounting Standards & Audit Requirements

Audit Standards ICAP Membership IFRS Adoption
Compliance
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Institute of Chartered Accountants of Pakistan
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Key Data & Rates

ICAP Membership Categories
ICAP membership categories and requirements Verified May 3, 2026
CategoryRequirementAnnual Fee (Rs)Notes Reference
Fellow (FCA)Qualifying exam + 5 years experience37,000Senior members ICAP – Fellow (FCA) Membership
Associate (ACA)Qualifying exam passed15,000Standard members ICAP – Associate (ACA) Membership
AffiliatePart-qualified5,000In training ICAP – Affiliate Membership
Registered StudentEnrolled in CA program3,000CA students ICAP – Registered Student
Foreign RecognitionOverseas qualification recognitionVariesCase by case ICAP – Foreign Qualification Rec...
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Source: ICAP.
Source: ICAP Membership Categories & CPA Requirements
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Details & Regulations

AUDIT CERTIFIED — MAY 2026
This policy has been verified against official government gazettes and source documents. View Audit Log
100% Verified
ICAP — Institute of Chartered Accountants of Pakistan
ICAP is the national professional accountancy body established under the Chartered Accountants Ordinance, 1961. With over 18,000 members, ICAP sets accounting and auditing standards, conducts professional examinations, and maintains ethical standards for chartered accountants in Pakistan.

Key Functions for IT/ITeS CompaniesSOURCE VERIFIED

  • Setting accounting standards based on International Financial Reporting Standards (IFRS)
  • Audit requirements for listed companies and those meeting specified criteria
  • Professional certification and continuing education programs
  • Quality assurance through Quality Review Board
  • Issuance of Pakistan Financial Reporting Standards (PFRS)

Official Website: icap.org.pk

Audit Requirements for IT CompaniesSOURCE VERIFIED

Mandatory Compliance: All IT/ITeS companies meeting thresholds under Companies Act, 2017. Deadline: Annual audit reports due within 6 months from financial year-end. Penalty: Late filing penalty of PKR 1,000 per day after due date as per Companies Act, 2017 Section 241.
CriteriaAudit RequirementLegal Reference
Public companiesMandatory annual auditCompanies Act, 2017 §241
Private companies with turnover > PKR 150 millionMandatory auditSRO 1048(XXI)/2021
Private companies with loans > PKR 50 millionMandatory auditSRO 1048(XXI)/2021
All companies receiving foreign investmentMandatory audit by ICAP memberSECP FEMS Rules
IT exporters (PSEB-registered)Mandatory for claiming §154A benefitsITO 2001 §154A
Startups claiming §65F creditAudit required for tax credit claimsITO 2001 §65F

Tax Rates Affecting Audit & Accounting (Federal/ICT)SOURCE VERIFIED

Tax TypeRateConditionsReference
Corporate Tax (IT Export, PSEB)0.25% (Federal/ICT)PSEB + 80% export revenueITO §154A
Corporate Tax (Domestic IT)20% (Federal/ICT)Standard corporate rateITO §154A
WHT Export (PSEB)0.25% (Federal/ICT)PSEB-registeredITO §154A
WHT Export (non-PSEB)1%Non-PSEBITO §154A
Startup Tax Credit100% for 3 years§65F(b), PSEB requiredITO §65F
SST Sindh (IT concessional)3% (Sindh)Software dev, CPC 83100SRO 981(I)/2015
SST Punjab (IT)0% (Zero-Rated)IT-enabled servicesPRA Act 2012

Accounting Standards Compliance for ITSOURCE VERIFIED

IT/ITeS companies must comply with ICAP's issued standards including:

StandardApplication to IT CompaniesKey Considerations
IFRS 15Revenue from Contracts with CustomersSoftware licensing: separate performance obligations; SaaS: over-time recognition; milestone payments
IFRS 16LeasesRight-of-use assets for office space, server leasing; PKR/USD impact on FCY leases
IFRS 9Financial InstrumentsExpected credit loss on receivables; FCY receivables at ~PKR 279.10/USD
IAS 38Intangible AssetsSoftware development costs: capitalize or expense; R&D capitalization criteria
IAS 12Income TaxesDeferred tax on §65F startup credits; 0.25% PSEB rate creates unusual current/deferred gaps
IFRS S1/S2Sustainability Disclosure (New)SECP considering adoption; relevant for ESG-conscious IT clients

Source: ICAP Standards Portal

Professional Qualification RequirementsSOURCE VERIFIED

Certificate TypeValidityRenewal FeeCPE Hours
Associate Chartered Accountant (ACA)3 yearsPKR 15,000120 hours per cycle
Fellow Chartered Accountant (FCA)3 yearsPKR 37,000120 hours per cycle
Practicing CertificateAnnualPKR 30,000-50,000Mandatory CPE compliance

Quality Review ProcessSOURCE VERIFIED

ICAP's Quality Review Board conducts periodic reviews of audit work papers:

  • Frequency: Every 3-5 years for major audit firms
  • Coverage: Minimum 5% of all audits annually
  • Fee: PKR 50,000 per review engagement
  • Reporting: Findings published quarterly

For compliance inquiries, contact ICAP at regulatory@icap.org.pk

Compliance Deadlines (FY 2025-26)SOURCE VERIFIED

DeadlineActivityAuthority
September 30, 2026Income Tax Return filingFBR IRIS
Within 6 months of year-endAudit Report SubmissionSECP/ICAP
March 31Continuing Professional Education (CPE) deadlineICAP
June 30Practicing Certificate RenewalICAP
18th monthlySST returns (provincial)SRB/PRA/KPRA
September 30WHT annual statementFBR IRIS

Recent Developments (April 2026)SOURCE VERIFIED

ICAP — IT Sector Accounting & Audit Requirements

The Institute of Chartered Accountants of Pakistan (ICAP) regulates the accounting and auditing profession under the Chartered Accountants Ordinance 1961. IT companies encounter ICAP through:

Mandatory Audit (Companies Act 2017)
  • All companies with paid-up capital > PKR 3 million must appoint an ICAP-qualified auditor
  • IT companies with foreign investment or STZA registration require annual ICAP audit
  • FBR may require ICAP-audited financials for companies claiming IT tax incentives (§65F startup credit)
Revenue Recognition for IT/Software
  • IFRS 15: Software license revenue recognized over the license period; SaaS revenue recognized over service period
  • IFRS 16: Leased IT equipment (servers, etc.) — recognize right-of-use asset
  • Export Revenue: Must be supported by SBP PRC (Proceeds Realization Certificate) for ITO §154A reduced WHT claim
Key ICAP Pronouncements for IT
PronouncementSubjectImpact
NFR 2Revenue recognition (IT services)Guidance on milestone billing, time-and-materials contracts
IAS 38Intangible assets (software/IP)Capitalized development costs for software products
IFRS for SMEsSimplified reportingIT startups below PKR 3 billion turnover can use simplified IFRS
ICAP QCRQuality control reviewFirms auditing listed IT companies subject to annual QCR
IT Sector Tax Reference for Accountants
ItemRateJurisdictionLegal Basis
IT Export WHT0.25% (PSEB) / 1% (non-PSEB)Federal/ICTITO 2001 §154A
Corporate Tax (IT)20%Federal/ICTITO 2001 §35
Startup Tax Credit100% for 3 yearsFederal/ICTITO 2001 §65F(b)
Super Tax (Banking + specified)10% (if applicable)FederalFinance Act 2025
Alternative Minimum Tax1.25% of turnoverFederalITO 2001 §113
EOBI5% employer + 1% employee (PKR 37,000/mo ceiling — EOBI Act & Rules)FederalEOBI Act 1976
ICAP — Institute of Chartered Accountants Compliance Checklist
SECP/Companies Act 2017
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SECP/Companies Act 2017
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PSEB
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SECP/Companies Act 2017
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SECP/Companies Act 2017
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SECP/Companies Act 2017
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SECP/Companies Act 2017
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ITO 2001
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ITO 2001
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Source Citations (1)
ICAP Official Website
https://www.icap.org.pk/
verified 2025 website
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