Page 35 - CMA Journal (May-Jun 2026)

F oc us S ec t ion

The Crucial Reforms-PIFRA & IMF The Role of the Accountants

Pakistan has invested many years in terms of time and Auditors and parliamentarians are not only responsible
funds, since 2008 years laying the foundation for the in a bigger canvas of public nancial management
improvement of the process of preparation nancial systems and here comes the role of the professional
statements and auditing. The pivotal step was the accountants working in the government departments
initiative of PIFRA, a World Bank-backed Project to or state-owned enterprises from where most
Improve Financial Reporting and Auditing, which irregularities are either arising or culminated. Their
transitioned government accounting into a SAP-based professionalism and most importantly integrity is key in
system with the application of the requirements in the
Each year Pakistan collects taxes and receives new loans protect that freedom New Accounting Model. The objective was to prepare the survival and smooth operations of the complex
and spends trillions of rupees that basically belongs to and resultantly the nancial statements on timely basis, auditable and nancial system and accountability.
ordinary people of Pakistan. Does that money turn into a accountability. not dependent on the manual records and auditor can Conclusion
well-equipped hospital, a state-of-the-art school, a road examine whole populations of transactions and not a
that survives harsh weather conditions, clean water and The President appoints limited sample. The AGP introduced and implemented Accountability institutions or framework is not the issue
basic facilities for the people of Pakistan? Or does it leak the Auditor-General, the the standards issued by INTOSAI which regulates the of Pakistan as it has constitutionally protected Auditor
General and a mechanism Public Accounts Committee
away through paperwork and mismanagement of term is xed and it’s a Supreme Audit Institutions of the world and the main (PAC), and a formal and organized process through
funds? The budget document will never provide the constitutional position bene t is the uniformity comes in the nancial which audit observations are reported and examined.
answers. The answer is in the scrutiny that comes with respect to its ecosystem of Pakistan. Further, under the terms and However, speed, prioritization, and enforcement is the
afterwards, and that responsibility and authority come appointment and requirements of IMF’s Fund Facility, clearance of the core issue which is challenging as well as not operating
under the jurisdiction of two prestigious organizations. removal. The core reason audit backlog and strengthening the public nancial as required.
management is on the top of the reforms required. If a
One is the Auditor-General of Pakistan (AGP), who audit is that an auditor who is country borrows like Pakistan, it has to demonstrate the Audit reports are only e ective when issues addressed
the accounts of public sector entities in details. The credibility and integrity through nancial system that timely and delays leads to more irregularities and public
other is the Public Accounts Committee (PAC), a not protected for raising the borrowed money utilized as required. distrust on the audit and ultimately accountability
parliamentary committee, responsible for examining issues or de ciencies is system and signi cant observations remain unresolved
government expenditure and audit reports of the not really an auditor. How Can the Strengthening of Audit Be for years raised questions on the PAC's e ectiveness.

Auditor General of Pakistan and have the powers to ask There is also a major aspect in respect of independence Achieved? Auditor General of Pakistan is raising the instances of
government o cials and make them explain what the and that lies in budgets and sta and the irony is when The strengthening of audit can be achieved by mismanagement of public money and irregularities
auditors agged. Together, both organizations serve as the o ce that audits the executive must visit that same implementing the following steps: from many years and the basic responsibility now rests
the backbone of public budget and spending and executive for the funds and human resource then the 1. Prioritizing should be enforced in letter and spirit to with Parliament and the executive to ensure timely
money gets handled with as per the regulations clear the backlogs which should be based on high action and corrective measures to streamline the
otherwise waste becomes the norm. protection is not in actual but only in black and white. risk and high value audit paras. nancial accountability system. PAC should be provided
with adequate time, technical support, and institutional
Two Institutions and One Objective- The Numbers Tell a Di erent Story 2. Key Appointments. Appointing chief nancial continuity with protection to deal with the audit
Accountability The numbers tell a di erent story and as per di erent, o cers/equivalents across the ministries and chief observations with follow up mechanism. PAC’s
internal accountants/equivalents in institutions, as
AGP’s Audit Reports for selected federal and provincial recommendations should be monitored through a
The AGP’s authority and powers comes straight out of entities covering di erent nancial years and the Parliament already directed, would settle many formal tracking system, on implementation status.
the Constitution. Four articles, 168 through 171, set up numbers it agged were not less and the alarming sign issues before they ever become paras. Coordination among audit institutions, government
the o ce and protect it from any interference, and hand is the repetition of the irregularities. Irregularity of 3. Timelines. Meeting the statutory deadlines for departments, and parliamentary committees can help
it over the responsibility and power of audit what the same nature adding up in each nancial year indicates tabling reports, holding hearings and ling ensure that identi ed de ciencies are addressed on
federation and the provinces take in and pay out and the systemic failure or weak internal controls rather than compliance replies is the key. timely basis. Digital monitoring tools can further
strengthen oversight by improving transparency and
working detail as per 2001 law on the Auditor-General’s 4. Make follow-up visible. PAC directions mean little real-time tracking. Public disclosure would also reinforce
functions and powers. AGP examine the accounts and one-o issue or anomaly. This also depicts that internal without a published tracker showing what was public con dence in the accountability process.
then report to rst to the departments through their audit is not working as per the core objective of it. recovered, regularized or disciplined.
own accounts’ committees, and in the end to Parliament. Another monster is the backlog issue and as per above 5. Give auditors better tools. A workforce of this size Strengthening audit and PAC oversight is not only an
said reports thousands of audit paras across ministries cannot hand-check everything, and pretending administrative reform but it is an investment in good
This is where the critical role of PAC is meant to come in. still pending and awaiting turn to review or discuss and governance of the country. People have all the right to
It has run under the National Assembly’s rules. When the ultimately disposed of. Like justice delayed is justice otherwise is part of the problem. International audit expect that every rupee collected in the form of taxes
standards in full, plus data analytics and risk-based
auditor raises a red ag, the committee can summon the denied, likewise observations that takes years to selection, let the same number of people cover far through their hard earned money is spent responsibly
principal accounting o cer (PAO) responsible, question dispose of it loses the objective of accountability more ground than manual sampling ever did. and accounted as required. Every rupee spent by the
him on the observation, and order for the recovery of government comes from the people, either through
funds, an expense regularized, or an o cial disciplined. process and by the time its nally disposed of the Follow What Already Works taxes or from borrowing. Stronger audit mechanism and
The mechanism is simple: auditor nds the problem, the o cers responsible have transferred to another None of these xes have to be invented from start. Our e ective oversight of PAC ensure that this money is used
elected committee asked an answer, the government department and the projects have completed and the committee descends from the Westminster system, and honestly, e ciently, and for the people from where it
reports back. Run the way in letter and spirit as per law, public funds wasted. So, the delays and repetition are that family of parliaments has a few habits worth comes, strengthening both governance and public
con dence.
hardly a rupee should waste away. the core reasons and leads to time barred actions. copying. Britain’s PAC keeps itself small, stays above
Independence is the Foundation Further, no ranking of paras as per value or risk and party point-scoring, takes evidence from the civil About the Authors: Mr. Adnan Mehmood Khan is a Chartered Accountant
and Fellow Member of PIPFA, currently serving as Senior Manager in the
servants who signed o the spending rather than from
settlement of paras than actual recovery just on
Quality Assurance Department of ICAP. He previously worked as an Audit
The main ingredient to the accountability lies under the departmental assurance and capacity building issues ministers, and answers to a deadline. No constitutional Consultant on PIFRA, a World Bank-supported project of the Auditor General of
foundation of independence and nothing achieve are the other basic reasons behind these numbers. amendments required rather implementation need a Pakistan aimed at improving financial reporting, auditing, transparency, and
accountability in the public sector. He has also served as a faculty member at
without it. The Constitution provided the basis to push as per its essence. LUMS, PIPFA, and CSA, teaching Audit, Accounting, and Public Finance.
ICMA’s Chartered Management Accountant, May-Jun 2026 33