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You retained earnings in DROPS, BUT can lose it in GALLONS

TESTING - DRAFT

SENIORITY ONLY BY THE PASSAGE OF TIME – solution to this common dilemma especially in public sector

As you might be aware of the fact that in the country we lives in, contrary to the rest of the world, seniority could easily be attained only with the passage of time, means in national language ‘paray paray senior hojana’ is one of the core Human Recourse issue that is standing behind our national economics retrogression model. As one of my colleagues suggested me once, ‘you may find many stupid non-qualified in your organization in different departments… NEVER argue with these stupid people, they will drag you down to their level and then beat you with their experience..... Seriously!’. Trust me I found this statement correct every time I tried to go and prove otherwise.

Practical jokes apart! To avoid the attainment of seniority only by the passage of time, Continuing Professional Development (CPD) is ‘the SOLUTION’. CPD is the systematic maintenance, enhancement and continuous improvement of the knowledge, skills and ability, often termed ‘competence’, that is required of a Professional as in this particular case is Professional Accountant.

Although I do firmly believe that the purpose of education is to make minds, not careers, BUT whether it’s about the minds or about careers, it certainly requires continuous overhauling otherwise it would get ruined. This ruining is really very dangerous because this make one a frog of a well, to whom the whole world is only the well, as he is unaware of the fact that there is even a possibility of the living beyond. This all happens when a person thinks that he possesses sufficient knowledge over the subject and there is nothing required to be improved. On the contrary professional bodies always demands their professionals to get involved in the continuous process of education and professional growth, and CPD is a recognized tool to obtain the same target. It actually prevents a professional mind from getting rusted.

 In the Accountants’ world, as we all are aware that the International Federation of Accountants (IFAC) has made mandatory for its member bodies to design and implement a CPD mechanism in such a way that it becomes a component of continued membership for the professional accountants. In order to facilitate the CPD implementation, IFAC has issued International Educational Standard for Professional Accountants (IES-7), which is in effect from January 01, 2006.

All professional accountants have an obligation to develop and maintain their professional competence, relevant to the nature of their work and professional responsibilities. This obligation applies to all professional accountants, irrespective of whether they are involved in traditional accounting fields or other areas.

The process of lifelong learning commences early, continuing with the education program to become qualified as a professional accountant, and on through an individual's career. CPD is an extension of the education process that led to qualification as a professional accountant.

The professional knowledge, skills, values, ethics and attitudes gained by the time of qualification continue to increase and be refined in a manner appropriate for the activities and responsibilities of a professional accountant.

Continuing professional development refers to learning activities that develop and maintain capabilities to enable professional accountants to perform competently within their professional environments. It is to be appreciated that the knowledge needed to function effectively as a professional accountant in public practice, industry, commerce, education and the public sector continues to expand and change at a rapid rate with the changes in regulatory environment, international standards and technology.

CPD is the thing that actually discriminates and gives professional bodies a privilege over the academic pass outs.

CPD, on its own, does not provide assurance that all members will provide high quality professional service all the time. Doing so involves more than maintaining professional competence; it involves applying knowledge with professional judgment and an objective attitude. Also, there cannot be assurance that every person who participates in a CPD programme will obtain the full benefits of that programme, because of variances in individual commitment and capacity to learn. Nevertheless, it is certain that members who are not up-to-date on current technical and general knowledge pertinent to their work will not be able to provide professional services competently. Therefore, despite the inherent limitations of any CPD programme, a CPD requirement is important in preserving the standard of the profession and also in maintaining public confidence.

It is the responsibility of the individual member to develop and maintain professional competence necessary to provide high quality services to clients, employers and other stakeholders. Members are free to choose from the opportunities both locally and internationally available, as approved by the CPD Committee, to fulfill their relevant CPD needs.

This Directive prescribes that members:

• foster a commitment to lifelong learning
• establish benchmarks for developing and maintaining the professional competence necessary to protect the public interest; and
• monitor and enforce the continuing development and maintenance of professional competence

The IES-7 states that CPD can be achieved by at least three different approaches:

• In-put based approaches by establishing a set amount of learning activity that is considered appropriate to develop and maintain competence.
• Out-put based approaches by requiring professional accountants to demonstrate, by way of outcomes, that they develop and maintain professional competence.
• Combination approaches by effectively and efficiently combining elements of the input and output based approaches, setting the amount of learning activity required and measuring the outcomes achieved.

COMPARISON WITH GLOBE:

CPD is required in almost every professional accounting body throughout the globe, I have highlighted a few foreign bodies with respect to the CPD requirements so that the same may be compared with the national bodies.

CPD Requirements - AAT

The minimum requirement for members is 45 hours of CPD per calendar year, of which a minimum of 15 hours must be structured training and 30 hours unstructured. The annual requirement has to be met over one year, the two-year averaging that is applicable to CIOT members is not available to ATT members. (For more information go to www.aat.co.uk)

CPD Requirements - ACCA

40 CPD units are required: 21 need to be verifiable e.g. e-learning, work based skills and courses and the remaining can be non-verifiable e.g. general business reading, writing and technical material. (For further information visit www.acca.org.uk/cpdrealise)

CPD Requirements - ATT

The minimum requirement for members is 45 hours of CPD per calendar year, of which a minimum of 15 hours must be structured training and 30 hours unstructured. The annual requirement has to be met over one year, the two-year averaging that is applicable to CIOT members is not available to ATT members. (For more information go to www.aat.co.uk)

CPD Requirements - CIMA

CPD became mandatory for all CIMA members in January 2006, it is a principles based scheme which focuses on the outcomes of the development activities undertaken and what has been learnt. CIMA detail a development cycle which members are required to progress through, this cycle involves six steps. Below is a brief synopsis of these steps:

• Define present and desired roles
• Assess development needs
• Design choose development activities to meet learning objectives
• Act undertake development activities
• Reflect on how it went, what you have learnt and how you can apply that learning
• Evaluate evaluate your record assessing actual development against objectives.
• Development records must be kept for a rolling three year period and there are acceptable formats detailed by CIMA.

(For further information visit www.cimaglobal.com)

CPD Requirements – CIPFA

Over a three-year period 120 hours of CPD is expected with a minimum of 20 hours verifiable activities in any one-year. For those members that chose to follow Level 2, upon completion of three continuous years of CPD activity will receive a Certificate of Achievement. (For further information please visit www.cipfa.org.uk)

CPD Requirements - ICAEW

The overall aim of CPD is to develop and enhance the value of the individual as a professional. An ongoing commitment to professional judgement based on ethics.

The ICAEW scheme is applicable to all members except fully retired members (Those who do not perform any work paid or unpaid) and requires members to:

• Reflect consider what is required in your role
• Take action undertake activities that enable you to meet expectations
• Consider the impact of the activities you have undertaken and whether they meet the needs identified
• Confirm submit an annual declaration that you have met expectations

(For further information visit www.icaew.co.uk)

CPD Requirements - ICAS

CPD became a requirement for all members, except fully retired, from 1 January 2006 and members will need to confirm their commitment to CPD in their annual return.

(For further information visit www.icas.org.uk/fastforwardcpde)

While in Pakistan the following bodies are paying utmost efforts to maintain their effectiveness vide CPD requirement.

CPD Requirements - ICMAP

Every member is required to complete 40 hours in one year or 120 hours in every 3 years period with a minimum of 20 hours in a year. This directive does not apply to the members who are ill or incapacitated so that he/she cannot perform normal work, retired from whole time business or facing career breaks. (For further information visit http://www.icmap.com.pk/cpd.aspx)

CPD Requirements - ICAP

ICAP has developed a revised CPD Directive for full compliance with the requirements of IES 7 which mandates 40 CPD hours per year, or 120 hours in a rolling period of 3 years, for both practicing and non-practicing members. The previous CPD exemption available to practicing members above 70 years of age and   non practicing members above 60 years of age has now been withdrawn. (For further information visit http://www.icap.org.pk/web/links/11/cpddirective.php)

Although worldwide CPD is also being observed by other professionals too e.g. CPD for lawyers, European Federation of National Engineering Associations,  Chartered Institute of Personnel and Development, Institute of Administrative Management, American Academy of Financial Management,  Chartered Institute of Logistics and Transport,  Royal Institution of Chartered Surveyors, The Federation of Medical Regulatory Authorities of Canada etc.

As the Pakistan Institute of Public Finance Accountants (PIPFA) deals largely with the Public Sector Accounting and Finance its effort toward the CPD would surly change the environment with in the Public Sector of Pakistan, by improving the Human Resource already performing the functions of Public Finance Accountant with in the County, It is not merely like injecting the new Red Blood Cells to their weak bodies which would enhance the absorbing capabilities of knowledge into their souls but also make their dead blood cells  moves out spade by spade. The rust of idea that they are excel in the field with their apprehended knowledge gained decades ago on the grounds of experience only would be shaded off with this CPD. Perhaps that is why the CPD is one of the essential components of the professional bodies throughout the globe.

As in the words of Dr. Allama Iqbal [translation] khirad ko ghulami say azad kar (free your intellect from slavery), jawano ko peero ka ustad kar (let the youth guide the elders), this is badly required in the Public Sector but this fresh blood should only be injected on merit with the vaccine named “Edu-CPD” i.e ‘education along with CPD’ otherwise this fresh blood cells will also transform into dead blood cells just after 3 months.

In the last I would like to suggest PIPFA to formulate, implement and mandated the CPD at least in the guidelines specified by IFAC’s International Educational Standard for Professional Accountants (IES-7). This will not only allow chance to those people who participate in a CPD programme to obtain the maximum benefits of that programme but also preserve the standard of the profession along with maintaining public confidence.

The resources which would never been used for Benefit!

Pakistani people are dying while sitting in a land full of riches. Perhaps this is the horrid yet true picture of reality in most developing countries in the world.

Pakistan covers an area of 796,095 km2 (307,374 sq mi), approximately equaling the combined land areas of France and the United Kingdom. It is the 36th largest nation by total area although this ranking varies depending on how the disputed territory of Kashmir is counted. Apart from the 1,046 km (650 mi) coastline along the Arabian Sea, The country is strategically located between South Asia, Central Asia, and the Middle East. Land is a valuable natural resource which include an extensive natural gas supply, some oil, hydro power potential, coal (although not high quality), iron ore, copper, salt, and limestone. Agricultural products are wheat, cotton, rice, sugarcane, eggs, fruit, vegetables, milk, beef, and mutton. Primary industry includes textiles, food processing, pharmaceuticals, construction materials, shrimp, fertilizer, and paper products. Major exports are textiles, rice, leather goods, sports goods, carpets, rugs, and chemicals. Pakistan imports petroleum, machinery, plastic, edible oil, iron, steel, tea, and paper.

Many Pakistanis are proud of their motherland. Every elementary school student is taught that the country is rich in natural resources. The citizens’ pride is rooted in the fact that the country is geopolitically important and can survive on its own – unlike Singapore, for example, which basically lives from its neighbors’ resources.

Ironically, these same children have to grow up witnessing or experiencing extreme poverty. This is more painful given the dreams they hold after being taught about the tishness of their land.

There is a long list of cases in which corporations – local and foreign – exploited and polluted the land, leaving toxic waste behind for the local people. From the human rights violations and destruction of peoples’ livelihoods caused by mining companies, to the environmental damage by the lather industry in Karachi, to a plethora of cases of mercuric materials in drinking reservoirs, corporations have brought evil consequences to Pakistani people.

Joseph Stiglitz, the 2001 Nobel Prize recipient for economic sciences, famously remarked, “Most countries with large (production) of natural resources do more poorly than those without, which is an irony.” The film “Blood Diamond” depicts a related situation in Africa, where exploration for diamonds institutes a civil war, disrupts a nation’s political stability and subjects its people to torment and anguish. One character vividly remarks, “I hope they do not find any more diamonds, otherwise we will start killing each other”. The same is for Pakistan where we that we would not find any more natural resources, otherwise we will start killing each other again.

Though it may sound treacherous, at some points I almost wish this land were poor – and that may indeed be the wish of many Pakistanis. The very inception of economic principles stems from resource scarcity; that is why their core mantra is one advocating efficiency in modes of production.

Imagine if the world provided sufficient natural resources that people could simply pick basic necessities – food, water, housing materials and clothes – from their immediate surroundings. In that scenario, economic principles may not even be needed. There are several caveats to ponder.

First, is it even true that our world does not provide sufficient resources to make this a reality? Is it even the case that resources are scarce, or is it human activity – greed, pure and simple – that makes it so? Humans always want to have what others have, even if they have more. Is it axiomatic that nature cannot naturally reproduce resources that humans have consumed?

Second, assuming that natural resources are scarce by nature, not by human greed, is it morally acceptable to suggest that those who are the most efficient at production get the biggest share of natural resources, while others who are less eficient should live at their mercy?

This is not to suggest that there is no place for economic principles, but they are not without flaws and not without vested interests. I would argue that those deficiencies manifest as the root cause of the torment many developing countries are suffering.

The very idea of insufficiency, or “resource scarcity,” pushes those with so-called “technology and capacity” to take over the management of the world’s resources; the idea of not having enough makes them look elsewhere. Natural resources become the prima donna, and everyone fights over her.

Without the technology and capacity developed countries command, developing countries will always lose in a game of resource management and accumulation. That is why in the fields of oil, gas and mineral exctraction, developing countries rabidly engage in joint venture agreements with foreign corporations from developed countries. The popular myth is that without foreign corporations, developing countries would not be able to extract these resources.

Could you imagin that Pakistan recently discovered one low and four low-to-medium quality coal seams in the Punjab. Low sulfur coal was recently reported at the Baluchistan and near Islamabad. Bituminous, sub-bituminous, and lignite coal have been found in Pakistan.

Do you know that;

·         Pakistan recently discovered one low and four low-to-medium quality coal seams in the Punjab. Low sulfur coal was recently reported at the Baluchistan and near Islamabad. Bituminous, sub-bituminous, and lignite coal have been found in Pakistan.

Coal reserves are estimated at 175 billion tons. This would equate to 618 billion barrels of crude oil. When compared to oil reserves his is more than twice the amount of the top four countries. If At KSA’s current usage, the reserves would last more than 200 years.

·         Natural gas production is at a high level in Pakistan. Estimated reserves are 885.3 billion cubic meters (as of January 2009). Gas fields are expected to last for another 20 years. The Sui gas field is the largest, accounting for 26% of Pakistan’s gas production. Daily production is 19 million cubic meters a day. Under the barren mountains of Balochistan and the sands of Sindh, there are untouched oil and gas reserves.

·         Forests are limited to 4% of Pakistan’s land; nonetheless the forests are a main source of food, lumber, paper, fuel wood, latex, and medicine. The forests are also used for wildlife conversation and ecotourism.

·         Pakistan has large gold/copper ore deposits at Saindak. There are large deposits of rock salt in the Pothohar Plateau. Pakistan’s mineral resources include reserves of gypsum, limestone, chromites, iron ore, rock salt, silver, precious stones, gems, marbles, tiles, sulfur, fire clay, and silica sand.

·         About 28% of Pakistan’s total land area is under cultivation. Pakistan boasts one of the largest irrigation systems in the world. According to Wikipedia, “the most important crops are cotton, wheat, rice, sugarcane, maize, sorghum, millets, pulses, oil seeds, barley, fruits and vegetables, which together account for more than 75% of the value of total crop output.” The fertile lands of Punjab are ready to feed a population twice that of current Pakistan.

·         Pakistan has a long history of exporting small amounts of uranium. In 2006 Pakistan produced about 45 tons of uranium.

·         The fishing industry plays a role in the national economy of Pakistan. The coastline is 814km and fishery resources still have room to grow. Fishing in Pakistan is a major source of export earnings.

But for every exploration we have to look towards other countries. Perhaps it would remind you about the Saindak Metals and many more alike.

According to economic schemas imported by developed countries, developing countries would not be able to extract those things “efficiently.” In reality, the uneven playing field is exploited by huge corporations that wield mighty bargaining power in their domestic econo-political arrangements – which in Pakistan are called “corruption” and dictate the share division of natural resources and the procedural rules for their extraction.

The practical implications are not only frowned upon, but also suffered by many people in Pakistan. That is the cancer of the irony: people die sitting atop the riches of their lands, not because nature does not provide enough, but purely because of unrestrained human greed.