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Watchdog halts ICPSK’s bid to fix audit charges

Wang’ombe Kariuki
CAK director-general Wang’ombe Kariuki. FILE PHOTO | NMG 

The competition watchdog has rejected the Certified Public Secretaries of Kenya (ICPSK) quest to set professional fees for 10 years on the ground that it would impede competition and has no public benefit.

Competition Authority of Kenya (CAK) on Tuesday, said the decision sends a strong message to professional bodies that fee guidelines reduce competition, innovation and efficiencies while limiting customer choice.

“It is the authority’s considered opinion that price fixing by professional associations extinguishes competition with no plausible public benefit,” said CAK director-general Wang’ombe Kariuki in a statement.

The ICPSK, which has about 3,500 members, made the application for excemption in August 2017.

It planned to set guidelines on how much members can charge clients for governance audit services based on an assessment of “fair professional fees for each subsector of the economy”.

All certified public secretaries providing services would be required to stick to the fee guidelines set up by the body.

The CAK said based on international best practice, it had concluded that setting of minimum prices will not incentivise innovation, efficiencies, or technical progress aimed at reducing costs.

“It is the authority’s position that the proposed guidelines are only meant to protect the minimum returns to the auditors devoid of competition,” said Mr Kariuki.

The CAK said ICPSK did not provide evidence to show that price fixing will improve the profession.

The authority further said the proposed guidelines also fell short of meeting some conditions set out in the Competition Act, as they did not contain compelling arguments that they are required to maintain professional standards and the ordinary function of the profession.