ICPAK kicks out 1,050 over default on membership fees, misconduct

The Institute of Certified Public Accountants (ICPAK) has deregistered some 1,050 individuals who are either guilty of professional misconduct or have defaulted on membership fees.

The affected external auditors, heads of finance and audit sections of listed companies, banks and insurance firms are not allowed to practice until they are cleared.

Those holding other positions including ordinary accounting jobs can continue to practice even without being members of the institute, but will miss out on benefits offered by the institute including professional training and international recognition.

ICPAK says those deregistered, including former managing trustee of the National Social Security Fund Alex Kazongo, are required to return their registration certificates — which stand cancelled — to the institute.

The institute’s chief executive, Dr Patrick Ngumi, said most of the individuals affected had their certificates cancelled for defaulting on their annual subscription fees.

“Paying the subscription fee is a statutory requirement,” said Dr Ngumi, adding that a two-year default would automatically lead to deregistration of a member.

He said members pay Sh26,000 to join ICPAK and thereafter an annual fee of Sh10,000. The institute admits auditors and accountants who have completed their training under the Certified Public Accountant (CPA) course, including fresh graduates (associate members) and those with more than three years’ experience (practising members).

READ: ICPAK wants auditor Ouko to name rogue accountants

Associate members, who can only remain in the special membership category for up to three years, pay relatively low fees of Sh2,500 to join and an annual subscription of Sh2,000.

Retired President Mwai Kibaki is ICPAK’s first and only honorary member (fellow) after he was conferred the status in December last year for his role in founding and supporting the institute.

ICPAK had about 12,000 members as of 2014, drawing a substantial part of its revenues from their annual subscription fees.

The institute earned Sh145.3 million from members’ fees in 2014, rising from Sh125.4 million the year before. The other major revenue stream is member services, including training, which rose to Sh246.1 million from Sh183.7 million over the same period.

Mr Ngumi said ICPAK has rolled out an aggressive campaign to recruit more members by offering incentives such as discounts on the joining fees.

Besides defaults, the institute has also deregistered members for professional misconduct. While most of the enforcement actions have targeted individual auditors, auditing firms have largely gone unpunished even as weaknesses in the work of external auditors continue to be exposed.

Restatement of financial statements, for reasons including alleged manipulation of accounts like the ones at Uchumi and Haco’s Tiger Brands, has become common making it difficult for investors to entirely rely on financial disclosures when making investment decisions.