CAT Reserves Verdict in ICAP Audit Fee Case

The Competition Appellate Tribunal (CAT) has reserved its verdict in a case filed by the Institute of Chartered Accountants of Pakistan (ICAP) against a penalty imposed by the Competition Commission of Pakistan (CCP) over alleged price-fixing.

The case dates back to 2008, when CCP initiated suo moto proceedings against ICAP for issuing a revised Accounting Technical Release 14 (ATR-14). Approved at ICAP’s 197th Council meeting on July 25, 2008, the revised ATR-14 set minimum hourly charge-out rates and fixed minimum audit fees for public sector entities.

CCP found this in violation of Section 4(1) of the Competition Ordinance, 2007, which prohibits anti-competitive agreements. The Commission declared ATR-14 null and void, directed ICAP to withdraw it from the Members’ Handbook, and publish a withdrawal notice in two newspapers. A fine of Rs. 1 million was also imposed.

ICAP challenged the decision before CAT. Representing ICAP, senior counsel Dr. Farrukh Nasim argued that the institute is a statutory regulator and has the authority to set minimum fees for audit engagements, especially for government institutions. He urged the tribunal to overturn the penalty.

CCP’s counsel countered that ICAP, though a regulatory body, cannot fix prices in a competitive market. The Commission termed such practices as collusive price-fixing—strictly prohibited under all modern competition laws.

The tribunal has reserved its judgment. The outcome is likely to impact how professional bodies operate within competitive sectors going forward.