The Securities and Exchange Commission of Pakistan (SECP) has taken a significant step towards modernizing the cost audit framework in the country by hosting a high-level consultation aimed at reviewing and reforming the existing regime. The initiative follows the issuance of a Consultation Paper on the “Cost Audit Regime in Pakistan” in January 2025, which sought feedback on the utility, effectiveness, and practical relevance of current cost audit practices.
Earlier consultation sessions were conducted in Lahore and Karachi, engaging representatives from industry, professional bodies, and regulators. These sessions highlighted widespread concerns regarding the current framework, with many participants describing it as overly compliance-heavy and offering limited economic or practical value to businesses or regulators. The feedback emphasized the need for reforms that balance accountability with operational efficiency.
Building on this input, a follow-up consultation session was convened at the SECP Head Office in Islamabad on October 27, 2025. Chaired by the SECP Chairperson, the session brought together senior representatives from the Institute of Chartered Accountants of Pakistan (ICAP), the Institute of Cost and Management Accountants of Pakistan (ICMAP), the Ministry of Industries and Production (MoI), the Competition Commission of Pakistan (CCP), and key industry stakeholders.
During the session, participants engaged in in-depth discussions on aligning Pakistan’s cost audit regime with international best practices, enhancing the framework’s relevance to regulatory and policy objectives, and simplifying compliance requirements for businesses. There was consensus on the need to streamline reporting formats, clarify the scope of cost audits, and improve filing mechanisms to avoid duplication of regulatory reporting.
It was agreed that ICAP and ICMAP would collaboratively conduct a comprehensive review of the cost audit framework. This review will include consultations with relevant stakeholders and deliver detailed recommendations to the SECP within three weeks. Key areas of focus will include the formats of cost accounting statements annexed to audited financial statements, the audit scope for these annexed statements, and the procedures for submitting them to sectoral regulators.
The SECP aims to develop a balanced and efficient cost audit regime that promotes transparency, strengthens accountability, and facilitates ease of doing business in Pakistan. By reducing unnecessary compliance burdens while maintaining oversight, the reformed framework is expected to support both industry growth and regulatory objectives.
This high-level consultation underscores the SECP’s commitment to creating a modernized and internationally aligned regulatory environment for Pakistan’s corporate sector. By actively engaging professional bodies, regulators, and industry stakeholders, the SECP is taking a collaborative approach to ensure the reform process is practical, effective, and widely supported.
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