The Capital Market Authority (CMA) called upon relevant and interested persons participating in the capital market to share their feedback on the Draft amendments to the Rules for Registering Auditors of Entities Subject to the Authority's Supervision. The consultation period will last for 30 calendar days, ending on 21/11/1447H, corresponding to 08/05/2026.
The proposed Draft aims to provide a legislative environment aligned with best practices for entities that independently oversee auditors, and consistent with the relevant laws and regulations, in order to enhance the quality of audit engagements for entities subject to the CMA's supervision and improve the quality of information disclosed by accounting firms registered with the CMA.
According to the proposed Draft, the CMA introduced mandatory requirements for accounting firms through the “Rules for Registering Auditors of Entities Subject to the Authority's Supervision" with the aim of enhancing the qualification of audit managers and ensuring professional competence. Among the key requirements is the presence of a sufficient number of audit managers within accounting firms who hold the Saudi Organization for Chartered and Professional Accountants (SOCPA) fellowship, or equivalent professional fellowships accepted by the CMA, commensurate with the nature, scale and complexity of the accounting firm's business activities.
The proposed amendments also require accounting firms to have an appropriate quality management system for auditing and reviewing financial statements. In addition, registered accounting firms must comply with professional standards when reviewing interim financial statements and auditing annual financial statements of entities subject to the CMA's supervision, in order to enhance the confidence of financial statement users.
The proposed Draft also requires registered accounting firms to comply with detailed instructions when the CMA conducts inspections, by cooperating with the CMA and providing the required information, data, and documents. In addition, registered accounting firms are required to prepare a corrective action plan, submit it to the CMA, and implement it upon approval, where the outcome of the CMA's inspection so requires. In addition, registered accounting firms are required to share the CMA's final inspection results on the audit file of the listed company with the company's audit committee, where the CMA has conducted an inspection of such audit file, thereby enhancing the committee's role in performing its duties.
At the level of information required in the Transparency Report, the proposed draft provides that such information must be clear, accurate, and non-misleading. The draft also requires accounting firms to provide additional disclosures in the Transparency Report, including disclosures related to the legal form of the registered accounting firm and a description of the quality management system applied by the registered accounting firm, including the names of the persons assigned to oversee the quality management system, as well as the outcome of the annual assessment of the system applied by the accounting firm. This enables those interested in the audit profession for entities subject to the CMA's supervision to assess the quality of audit work performed by registered accounting firms.
The CMA emphasized that the comments of relevant and interested persons, including individuals, government entities, the private sector, and CMA's supervised entities, shall be taken into full consideration for the purpose of approving the final proposed Draft, which in turn shall contribute to the aim of enhancing and developing the regulatory environment. Opinions and comments can be received through any of the following:
