Key Takeaways
- The Securities and Exchange Commission of Pakistan (SECP) has updated the criteria for audit firms appointed by financial institutions.
- The changes apply to entities regulated under various laws, including the Securities Act, 2015, and the Companies Act, 2017.
- Audit firms are categorized based on the nature of regulated entities, their licensing status, and asset thresholds.
The Securities and Exchange Commission of Pakistan (SECP) has revised the eligibility criteria for audit firms appointed by financial institutions, introducing changes to its list of approved auditors. The SECP issued Circular No. 24 of 2026, partially amending Circular No. 7 of 2026, to ensure that the appointment of auditors by financial institutions is more stringent and aligned with regulatory requirements.
The revised framework covers entities regulated under various laws, including the Securities Act, 2015, the Futures Market Act, 2016, the Insurance Ordinance, 2000, and the Companies Act, 2017. The changes will apply to the appointment of auditors by lending non-banking finance companies (NBFCs) for financial years beginning on or after January 1, 2027.
The SECP has divided eligible audit firms into categories based on the nature of regulated entities, their licensing status, and asset thresholds. The first category covers larger regulated entities, including securities exchanges, futures exchanges, clearing houses, depository companies, securities brokers holding trading and clearing licenses, and asset management companies or pension fund managers with assets under management of Rs50 billion or more.
The category also includes lending NBFCs accepting deposits, non-deposit taking lending NBFCs with assets of Rs1 billion or more, modarabas with assets of Rs1 billion or more, and collective investment schemes, voluntary pension schemes, or real estate investment trusts (REITs) with assets of Rs10 billion or more. Insurance, reinsurance, and takaful operators with total assets exceeding Rs10 billion, collateral management companies, credit rating companies, and professional clearing members are also covered.
The approved audit firms in this category are A.F. Ferguson & Co., Baker Tilly Mehmood Idrees Qamar, BDO Ebrahim & Co., Crowe Hussain Chaudhury & Co., EY Ford Rhodes, Grant Thornton Anjum Rahman, Ilyas Saeed & Co., KPMG Taseer Hadi & Co., Kreston Hyder Bhimji & Co., Muniff Ziauddin & Co., Nasir Javaid Maqsood Imran, Parker Russell A.J.S., Rahman Sarfaraz Rahim Iqbal Rafiq, Reanda Haroon Zakaria Aamir Salman Rizwan & Co., Riaz Ahmad & Co., Rizwan & Co., RSM Awais Hyder Liaquat Nauman, S.M. Suhail & Co., Yousuf Adil and UHY Hassan Naeem & Co.
The SECP has established a separate category for smaller regulated entities, including securities brokers holding trading and self-clearing licenses, asset management companies or pension fund managers, and NBFCs with assets under management below Rs50 billion. It also covers non-deposit taking lending NBFCs with assets below Rs1 billion, modarabas with assets below Rs1 billion, collective investment schemes, voluntary pension schemes, or REIT schemes with assets below Rs10 billion, and insurance, reinsurance, or takaful operators with total assets of Rs10 billion or less.
The approved firms in this category are Amin Mudassar & Co., Fazal Mahmood & Co., H.A.M.D & Co., Junaidy Shoaib Asad, Malik Haroon Ahmad & Co., Mushtaq & Co., Naveed Zafar Ashfaq Jaffery & Co., PKF F.R.A.N.T.S., Riaz Ahmad, Saqib, Gohar & Co., ShineWing Hameed Chaudhri & Co., and Tariq Abdul Ghani & Co.
Other entities can appoint ICAP-rated auditors, ensuring that the audit process remains transparent and compliant with international standards.
