The Vice President for Capital Market, Mohammed Said Al Abri Said the Rules for accreditation of audit firms comes as part of CMA’s concern to develop the audit firms and ensure their compliance with the laws and regulations due to the great role the play in assuring the soundness and accuracy of financial statements prepared by public listed companies and their compatibility with international accounting standards and disclosure to the investors which would reflect positively on the confidence of the public in the MSM.
CMA issued administrative decision No. 8/2018 relating to issuance of the Rules for accreditation of the auditors. Al Abri said the rules focus on the licensing term for the audit firms to practice auditing processes of the companies regulated by CMA. The rules states the licenses is for two renewable years. He said the move comes to ease the process of follow up and evaluation of the firms to ensure meeting the requirements of professional conduct according to the required standards of efficiency and quality of professional performance derived from the quality of services rendered to investors which must be of high quality, objective and trustworthy to contribute to revealing points of weakness and strength in the financial performance of the companies to enhance their growth and ability of advancement to serve the national economy beside providing protection to investors through sound statements to take informed investment decision.
The Rules provides in Article (6) that the accreditation will be issued for two (2) years after payment of the fee renewable on the same terms and conditions and procedures provided the application is submitted within 30 days preceding the expiry of the accreditation. The rules shows the fees for accreditation and renewal.
The rules granted the currently accredited firms (19 firms) a grace period to adjust their situation during a period not exceeding six months.
The rules states that the audit firm requiring to be accredited by CMA must have at least five years of experience in auditing beside proper professional competency and sound reputation in auditing, shall not be deprived from practicing the profession or any action is imposed against it for committing professional error or legal violations in addition to having five employees who have specific qualifications including at least one professional partner all of them shall be registered in the accountants and auditors register of the Ministry, shall have a certificate of chartered accountant, shall be whole time employee of the firm and three of them, including the partner, must have an experience of not less than ten years in auditing after obtaining the professional qualification.
The rules emphasized that the auditor shall be obligated to render the service and shall not render any additional services that might impact their independence and impartiality.
The legislature authorized the Executive President of the CMA to impose penalties in case of breach of the rules ranging from warning to suspension for specific period or deregistration with CMA and recommend to the relevant company to appoint another auditor.