Stop ICPAK Raids on Members, Stop HIGH cost of CPDs & Seminars, Rescue Accountants Please.

Stop ICPAK Raids on Members, Stop HIGH cost of CPDs & Seminars, Rescue Accountants Please.

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Sharon Mwangi started this petition to Human Rights Campaign and

The Institute of Certified Public Accountants of Kenya (ICPAK) was established in 1978 with a key mandate "To promote standards of professional competence and practice amongst members of the Institute" HOWEVER"

It is now time we as Accountants speak in one voice and ask to be rescued from tyrannical, barbaric, merciless and unorthodox pursuits being enforced on us.

ICPAK has a history of exorbitant charges for its events and Seminars which are the key basis of promoting professional competence and practice amongst its members. As a result, many Accountants are living in distress and distraught pondering the next move in the career path because as a start you MUST register with ICPAK at Kshs 27,200 and subsequently subscribe yearly with Kshs 11,200, out of which Kshs 1,200 is for the benevolent fund. Masses are CPA Finalist and can not join the institute because they feel it adds no value to their career but the only thing they will get is a persistent pursuit of renewing the subscription and must attend those seminars, with or without any income generation failure to which you are adamantly threatened with deregistration and forfeiture of rights as a member.

All Events are heavily priced to the detriment of the very professionals ICPAK is bound to help develop their careers most of whom are youth and young people who are unemployed or struggling to make ends meet while living on less than the international poverty line (US$1.90 per day in 2011 PPP).

One CPD hour cost over kshs 1,400 on the average price, members have continually kept asking what criteria is being used or has been being used to cost the events but all cries have fallen to deaf ears, as we continue to see the website abreast with same events highly priced. In a Year every Member is supposed to acquire 40CPD units, 25 of which are structured meaning you must attend the much unaffordable seminars or events and the other 15 units are unstructured. When members attempt to ask about the high priced events they are told there are cheap workshops(with little or no value addition to the much needed international standards of  growth for a professional Accountant) of Kshs 500 some of which give only 2 units at most, now the question is how many of those ones a member is  required to work on to attain the requirement of 25 structured units? The question we keep asking is whose interest is ICPAK serving in the Country?

ICPAK financials(2018) carry many grey areas some of which when the last AGM to ratify the same Financials was held at Safari Park, Nairobi in June 2019, most of the questions and pertinent issues went unanswered and even the microphones of concerned members were switched off in order to dissuade them from making further inquiries,is this professionalism? For an Institute that is required to uphold professional ethics on its members, this should not be heard of.

ICPAK Financials shows that Revenue increased by 16% from Kshs 679M  (in the Year 2017) to 791M (in the Year 2018) whereas Expenses increased by 17% from Ksh 612M (in the Year 2017) to Kshs 719M (in the Year 2018),how would an Institute which receives  subscriptions from members which are heavily charged and then at the same time have expenses which eats up all the increase in collection and even go for an even extra 1% of the reserve? So where do members cash go? where does it get invested? whose pocket does it end into? ICPAK is a proud owner of an asset called ''Inventory'' in its Financials worthy Kshs 29M! what are these Inventories? was there a management itch before it got to this alarming level of Inventory worthy that much for an institute that does not trade?  Worse still the Insitute now has Current assets being less than Current Liabilities. Please, you can check the 2018 Financials which are in the public domain.

As if that is not enough ICPAK officials have taken it a notch higher by making ICPAK their second home, this is evidenced by the many foreign trips they make in the name of foreign engagements for MOUs, refer to Daily Nation on May 22nd, 2019 titled “ICPAK on spot over foreign recruitment” ,ICPAK officials some who are very well known to the Accounting fraternity have gone to the extremes of tearing members applications for practitioners license right in front of everyone or even their juniors in a bid to frighten, threaten and retrogress members' attempt to grow their career. This is not what members bargained for when they were hard working to attain the requirements of a certified public Accountant of Kenya.(CPA)

The worst case scenario happened in the last two months where ICPAK and the same officials colluded with some top management to raid practitioners' firm with the full glare of media and harassed, tormented and frustrated the Directors of the well-established Companies who were going about their normal business. The question is why did ICPAK not follow the process of the law? why use guerrilla tactics with vested interests to bring loss to a firm that ICPAK itself is required to safeguard and guide towards professional competence and all the means and channels were available?

Read the full episodes as detailed by a concerned Member who has lost hope in the same institute that is supposed to bring sanity into the practice. It is a long Post But Please bear and get all the facts of this Petition.

Episode 1:

The ICPAK Raid – Introduction

This is the first of a 3-part series dubbed #ICPAKFriendorFoe. In this first episode, I set the stage

for what might be seen as exposure to the Institute’s underbelly. The Mission of ICPAK is ‘To develop and promote internationally recognized accountancy profession that upholds public interest through effective regulation, research, and innovation’. In doing so, the institute is guided by its core values i.e. Credibility, Professionalism, and Accountability. At the moment the Institute is bedeviled by a number of challenges including the inability to convince/attract and retain active membership. ICPAK’s active membership base is about 20,000 with an even larger number of CPA finalists either being inactive members or unwilling to register with the Institute. Clearly, this is an organization that needs to enhance its allure to current and potential members.
The conundrum that ICPAK operates in is characterized by, on one hand, seeking to create an allure for all accountants in the country, and on the other, being the regulator that reins order in the profession. This is a delicate balance no doubt.

Now, with this background, I want to highlight an instance when our beloved Institute went against its mandate, totally disregarded its core values, jeopardized its allure by adopting the demeanor of a terrorist organization, and worked itself into a situation that curtailed its role as a regulator.
ICPAK is all of us. We must stand up and save it from itself.

By way of introduction, I am a longstanding member of ICPAK in good standing. I had an opportunity to start my career in one of the big-4 firms before I established my own firm – duly licensed by ICPAK. Needless to say, I take pride in our honorable profession and hence in a strengthened ICPAK. Most importantly, I want the profession to be rid of the menace of quacks masquerading as accountants/auditors. Finally, in my free time, I research, investigate and challenge injustices in the Profession. I think of myself as the “Mtetezi wa wahasibu wote”. This is why I draw the attention of the members and the public to an event that happened a couple of weeks ago.

Given the sensitivity of the issue at hand and the possibility that this matter is already before a competent Court of Law, I will conceal the names/identities of the parties involved. However, the facts of the case remain and this is well known to ICPAK. I also wish to declare herein that I do not have a relationship with the firm in question, its partners or its staff save for a few contacts I made in a bid to collect information regarding this case.

On 29th April 2019, representatives of the ICPAK secretariat raided the offices of a firm, ABC Ltd (not their real name) accompanied by Police and the press. This raid was aired live on some media platforms – notably K24 and Switch TV. It was also splashed widely through the ICPAK social media pages.

Something about this raid raised my curiosity. The pictures of the firm, its partners and staff were shared online unreservedly. For some reason, as soon as I saw the pictures, I knew that there was more than met the eye. Why? The firm in question is well established; lavishly branded and furnished; the partners appeared to be persons of influence in the society and highly experienced and qualified; from the publicly available information, I noted that the firm had a sizable staff base – supposedly highly qualified. I, therefore, decided to take a keen interest on what went wrong. Although it has taken me this long, chips are beginning to fall in place.

I called one of the partners of ABC Ltd, who is my co-professional at ICPAK wanting to know more but they declined to speak to me. I, however, managed to get the views of one of the staff members in the firm. In addition to this, I spoke to impeccable sources within ICPAK and other organizations served by ABC Ltd.

I state here that never in the history of accountancy has a Regulator bullied and mistreated its member in the manner ICPAK, through its secretariat, did to this firm.Having been an accountant for long – and a practicing member of ICPAK, I have never witnessed such a raid in the history of accountancy in our country (and perhaps in the world?). Long-serving members of ICPAK also confirmed to me that this was a first and they too were shocked at the turn this took. ICPAK has very clear channels of handling disputes and disciplinary matters – often away from the glare of cameras. These channels have always been used and have served ICPAK and its members thus far. In the case of ABC Ltd, a deliberate decision was made to not invoke our age-long dispute resolution and disciplinary mechanisms. Instead, ICPAK went to great lengths to channel its efforts towards a social media onslaught on this firm. I was curious whether the Institute had determined that the issue at hand could not be competently handled by the set mechanisms. If so, why?
Anyway, the exercise led by two senior officials at the ICPAK Secretariat was dubbed “raids on suspected illegal audit practitioners”. The Statement accompanying photos of the raid (which included the firm’s logo, name tags of the firm’s partners, photos of the partners and their staff, etc.), and a couple of press releases had the tagline “do not engage quarks” (sp) implying that ABC Ltd and its partners were quacks. This was widely circulated on social media pages of the Institute as well. In fact, the discussions and debates that ensued were centered on the firm members’ academic and professional credentials (or lack thereof), their character and integrity (or lack thereof), but also (for the more critical readers) why only this one firm was singled out. Why did ICPAK find it necessary to lodge their action on social media i.e. the court of public opinion where ABC Ltd can never be granted a right of reply?

My investigation has independently established that the real objective of the raid was to nip this upcoming firm at the bud. No business (worse still a startup) ever recovers from such an onslaught and especially from a regulator. So messy is this whole saga that misinformation was presented to senior ICPAK Secretariat staff regarding this case. In actual sense, the raid was instigated by a junior member of staff at the ICPAK secretariat, who having a vendetta against ABC Ltd, unbelievably managed to dupe and incite his seniors into singling out ABC Ltd in the guise of the raid. The senior members, in total disregard of their policies, by-laws, and the Accountant Act, and not knowing that they were pawns in a bigger scheme, went ahead and rallied police officers and pressmen to join in this charade. I have learnt that some of the seniors have since unearthed this ploy and are desperately trying to clean up the mess of an exercise that went awfully wrong. It is unbelievable that ICPAK would so carelessly jeopardize a business venture that it would otherwise have been tasked to foster. And here, I speak as one who runs a firm. I know what it takes to keep a business up and going – especially during these hard economic times.
As an independent person, I decided to delve deeper into the supposed “quackness” of this firm. In the next episode, I will outline details of my investigations and the resultant findings. Stay tuned as I unleash more disturbing specifics.

Episode 2: The ICPAK Raid – ABC Limited

This is the second of a 3-part series dubbed #ICPAKFriendorFoe. In the first episode, I set the stage for us to reflect on the actions of our regulator. This episode is a sequel to the first episode. Here I lay out my findings on ABC Limited and the stated reason for the raid. I reiterate that I welcome any other members’ views on the same.

As I mentioned in my first episode, ABC Ltd might already be seeking legal redress for what it terms as a malicious, unfair and outrageous witch hunt by ICPAK. Impeccable sources at ICPAK have shared with me copies of Letters from both sets of lawyers in what could potentially become an ugly battle in Court if not managed well and fast.

I would like to authoritatively state the following:

1) During and before the Annual Conference in Mombasa in May this year, I spoke to a number of ICPAK Council Members who held office at the time of the raid. While some of them remained tight-lipped over the raid, the majority disowned it in its entirety. One member actually mentioned that the raid may have marked their lowest moment in the profession. Another one owned up to knowing the firm and even visiting their premises for “usual business”. What appalled me was that none of these council members wanted to pronounce themselves publicly on the issue. That said, I concluded that the Council could not have sanctioned the raid.

2) Staff members at the ICPAK secretariat (names withheld) informed me that they were first approached by a partner of ABC Limited (who is a member of ICPAK) in July/August 2018. They wanted a Practicing Certificate and License for themselves and the firm respectively. In this instance, the said partner also reported 2 cases where they had irregularly signed external audit certificates (in March 2018) and wanted advice on how best to remedy the situation. The ICPAK representatives advised them to desist from issuing external audit certificates until they had obtained the requisite license. The ICPAK representatives further advised that for the partner to obtain a license, they had to establish an MoU with a CPA firm through which to carry out the external audits. The ICPAK representatives also advised the partner to update their CPD records with the Institute and to ensure that their subscriptions were current. This corroborates ABC Ltd’s account and Letter from their lawyers. I have written signed records of this from the said ICPAK staff, although they fear reprisal from their employer should I leak their identities. I will treat the letters as confidential and will only be willing to present these in a Court of Law with proper witness protection. Apparently, ICPAK is known for high handedness by its leadership but I digress.
3) ABC Ltd has deponed in their correspondence and letters from their lawyers that since the receipt of the advisory from ICPAK in July 2018, it has not undertaken any external audit assignments to date unless under the CPA firm with which it has an MoU, and that it is painstakingly implementing ICPAK’s recommendations of July 2018. I have confirmed this to be true.
4) Based on the above, if the partner at ABC Ltd, on their own volition reported to ICPAK that they had signed audit certifications contrary to ICPAK by-laws and the Accountants Act and that they and ABC Ltd were now implementing the advice given, why were they then subjected to such a raid and almost a year later? In fact I am told that the only evidence acquired during the raid were the same ones the partner had presented to ICPAK many months before.
5) Because the said partner is a member of ICPAK, even if wrongdoing had been established on their part (and in my humble view this would have been mitigated by the fact that they reported it to the Institute themselves), why wasn’t the partner subjected to the set disciplinary procedures of our noble profession?

6) In a profession awash with quacks prowling the streets, surely ABC Ltd, its partners, or its staff were a poor choice for the purported raid. We all know quacks and will attest to the fact that there is no way a quack establishes a stylishly branded office in a high-end neighborhood, is in communication with ICPAK regarding their certification/licensing, invites ICPAK Council members to their offices, have a staff base of at least 12 well-paid staff, etc. On reviewing their legal letter and other publicly available information, I would like to highlight that:
i) The Managing Partner at ABC Ltd holds an MBA from the University of Nairobi and BSc. in Applied Accounting from the Oxford Brookes University. They are a qualified accountant i.e. a member of the Association of Chartered Certified Accountants (ACCA). They are also a Certified Information Systems Auditor (CISA). They are a member of ISACA and the Institute of Internal Auditors (IIA). Finally, they have over 13 years’ experience in accounting and auditing;
ii) The other partner at ABC Ltd holds an MBA from the Jomo Kenyatta University of Agriculture and Technology and a B.Com Degree from the Catholic University of Eastern Africa. They are a qualified accountant with membership in both the Association of Chartered Certified Accountants (ACCA) and the Institute of Certified Public Accountants of Kenya (ICPAK). They are also a certified member of the Institute of Internal Auditors (IIA). Finally, they have over 20 years’ experience in accounting and auditing;

iii) ABC Ltd prides itself in recruiting top-in-class staff – most of who hold first class honors degrees. These are simply the smartest in the industry. I noted that for professional staff, ABC Ltd remunerates almost at the same scale as the Big-4 firms;

iv)Through my impeccable source at ABC Ltd, I have with me copies of all their Letters of Engagements from 2017 to date. I confirm that other than the 2 cases already reported to ICPAK, all other assignments were related to Internal and Systems audits and bookkeeping. In the pipeline were due diligence assignments and financial advisory. The firm’s partners had also been appointed to various Boards. Interestingly, I also have copies of client feedback forms in which clients rated the services from ABC Ltd as exemplary save for housekeeping issues such as timeliness of assignments. Of interest are the feedback forms (copies now in my possession) of the two irregular cases reported to ICPAK. Interestingly, both reported exemplary quality;
v) Related to (iv) above, I dared obtain 2 sample files worked on by ABC Ltd from the CPA firm that ABC Ltd has an MoU with to perform external audits. As a practitioner myself, I could not fault them. While the working papers filed bore the ABC Ltd’s logo, the Letters of Engagement and reports (including the audit certification) were in that other firm’s name and logo. In other words, ABC Ltd had only been sub-contracted (kym). As a disclaimer though, I think ICPAK would need to review these files. How else should they discern quacks????
vi) I also have with me invoices sent by ABC Ltd to this other CPA firm for their services. Without reporting on the exact fees, I report here that these were painfully meager, often paid through Mpesa. This convinced me that it was true that the only motivation ABC Ltd would derive from such an arrangement was the obtaining of a practicing certificate and not financial gain; and
vii) Finally, from my ABC Ltd’s source, I observed that 98% of ABC Ltd’s clientele by numbers and values are for services other than external audits.

Based on all the above, I concluded that these are not/ cannot be quacks as had been alleged by the raiders. I established that ABC Ltd were pursuing their certification from ICPAK and in fact acting on the advice of ICPAK since July 2018.

As a practitioner, I must admit that I found the advice provided to ABC Ltd strange. Why should a firm work under a very exploitative arrangement with another firm in order to obtain their certification/license? Even I can fault that advice and in any case, the ICPAK website is abundantly clear on the requirements for obtaining a practicing certificate. In this regard, I fault the partner of ABC Ltd, who has been a member of ICPAK for a very long time. How could they not discern the inaccurate advice? However, correcting this misadvise, especially given that it originated from within ICPAK should never have been through a raid and certainly never through social media.
As if this is not bad enough, I have with me irrefutable evidence that that raid was never about irregularly issued external audit certificates, lack of practicing certificates/licenses, implementing wrong advice from ICPAK, etc. Rather, that it was a well-orchestrated scheme crafted from a board room elsewhere. This was a witch hunt. In the next episode, I will lay bare the facts. Stay tuned for this final explosive episode.

Episode 3: The ICPAK Raid – The Real Reason


This is the third and last part of the series #ICPAKFriendorFoe. In the first episode, I set the stage for us to reflect on the actions of our regulator. The Second episode gave us a closer view of ABC Ltd’s operations and its standing with ICPAK. In this explosive episode, I tear into why exactly ABC Ltd was raided in the manner and fashion we witnessed. The facts tabled here below are in the public domain and easily obtainable/verifiable. I reiterate that I welcome any other member’s views on the same.

Based on my investigation, I state the following:

1) From my impeccable sources at both ICPAK and ABC Ltd, I picked the identities of the 2 organizations that the ABC Ltd’s Partner had earlier reported to ICPAK as having irregularly signed their Accounts. In one, I spoke to the entrepreneur and he stated that in July 2018, the ABC Ltd partner cared to inform him of their ICPAK status. He even showed me an email in which the ABC Ltd partner was offering to reimburse him the audit fees. He told me that he assured ABC Limited that he was happy with their services and that as soon as ICPAK certified them, he would continue working with them. He was quite saddened by the ICPAK raid.

2) That left me with the second organization. First and foremost I was informed that at this organization, there had been an almost complete overhaul of leadership in the course of 2018. I spoke to a number of former leaders including Board Members who held office at the time of the audit. While they too reported having been informed by the ABC Ltd partner of their ICPAK status and also having been offered recertification at ABC Ltd’s cost, they confirmed that the quality of the reports were very good and unearthed many unknown aspects. And they stated that that was the reason they chose not to seek the recertification at ABC Ltd’s cost. They, however, cast the spotlight at one Mr. James Kioko (Not his real names).

3) Mr. Kioko is currently a Board Member of that organization. My informants, most of whom served in the disbanded leadership team said that the other current Board members tasked Mr. Kioko to bring down ABC Ltd as they believed that this firm was linked to the previously disbanded leadership. This is corroborated by staff members in this organization who sought complete anonymity as Mr. Kioko is still their Board Member.

4) At the center of the ABC Ltd raid was Mr. Kioko (clearly depicted in the images ICPAK shared widely in their social media pages). Mr. Kioko works as a compliance officer at ICPAK. I am told that he hid from his bosses the fact that he is also a Board Member at the above organization and that the raid was, in fact, pursuant to that other organization’s Board’s interests. In other words, he never declared his conflict of interest in the raid. Some staff at the ICPAK secretariat and those at the said organization (on condition of anonymity) and some members of the public knew that Mr. Kioko used his position at ICPAK to single out ABC Ltd for a raid whose motive was to embarrass the firm (one wonders how this would benefit the other organization). Impeccable sources at both the organization and ICPAK have given me this evidence of the alleged conflict of interest in the Institute.
5) It is comical that the other organization whose Board Mr. Kioko serves in, is mandated with empowering women and youth yet they almost succeeded in bringing down a women-led organization (ignore my slip of the tongue) that is an employer of the youth. Again I digress.
6) I have also learned that ABC Ltd has since written (I have a copy of the said letter) to the Institute stating that for now, they do not wish to offer external audit services but that they are keen on a number of other services. They wanted to be issued with the alternative licenses/certificates promised to members during the AGM. Strangely, they were informed through a letter (also availed to me) that such a license is non-existent at the moment. So were members lied to? Or is this firm being denied what is rightfully theirs? How does this firm and ICPAK remedy the raid?

 How do these parties close this issue?

7) My fellow members and the public at large, on the material day of 29th April 2019, a very senior contingent of ICPAK personnel expended valuable resources in time during the raid. I am reliably informed that the raid took a day to execute. It culminated in statements and media coverage of the same later that day. Surely, what was the outcome of all this? To what end was it all? It cannot be that the only outcome, after all that, was to generate a scandal and thereafter substantial legal costs to be borne by members. I am reliably told that ICPAK has never revisited the issue and ABC Ltd are now left to be the ones to prompt for closure – with ICPAK almost always acting lost in all this. This is unacceptable!

8) Moving forward, it is now apparent that ICPAK overlooked information provided by ABC Ltd and its partner way before the raid and singled them out. One must ask themselves why. Clearly, the raid was instigated by external forces who used senior ICPAK Members as mere puppets. I suggest that this matter is weighty enough to warrant the attention of the Council Members. This is the kind of case that could potentially embarrass our profession and further discourage membership.

9) ICPAK is mandated to safeguard and uphold the public interest. To do so, it must be independent and beyond reproach and be seen to be so. It cannot be used to further undisclosed agendas originating from the boardrooms of other organizations. It cannot be a gun for hire. In this case, it was used by non-members to fight a member – a thing it was very glad to do! How do I come in? If this goes uncorrected, I could be the next ABC Ltd. You could be the next ABC Ltd. This impunity must stop!

As mentioned earlier, ABC Ltd has stated that they do not want the amalgamated practicing license – which is curious. But then again, in their shoes, would you want to be associated with a regulator such as ICPAK? In their eyes they see a bully, a gun for hire, a regulator who is not independent and who acts at the whim of the highest bidders. I also ask myself whether such violence and malice would be visited upon the big brothers in the industry. And what about those who harbor ambitions of one day setting up firms? Having seen what ABC Ltd has been subjected to, would they want such a regulator? No, ICPAK must rise again! It is a Father to the big and the small alike. I rest my case for now.

Please note that this is my own independent review and I do not purport to position myself as the sole authority on this matter. It is also not my work to vindicate aggrieved parties in the profession. I only highlight disturbing and stubborn facts of this case. I believe that anyone else who cares to independently and objectively review this case will arrive at the same conclusions.


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