In continuance to the role of the Capital Market Authority in developing and regulating the capital market and seeking to make the capital market environment more stable by enhancing the disclosure and transparency levels in the capital market, and in line with the Authority's strategic plan to promote confidence in the capital market and seeking to achieve the objectives of the (Financial Sector Development Program) one of the programs of the Saudi Arabia’s Vision 2030, the Board of Capital Market Authority issued its resolution to adopt and publish the Rules for Registering Auditors of Entities Subject to the Authority's Supervision "the Rules". The Rules shall be effective upon its publication date, except for the following provisions:
Paragraph (a) of Article 5 of the Rules, prohibiting any person that has not been registered with the Authority from carrying on auditing engagements for entities subject to the Authority’s supervision, as such paragraph will become effective on 30/06/2019G.
Subparagraph (a) of paragraph (2) of Article 8 of the Rules, requiring for the registration of a certified public accountant that such certified public accountant must obtain a fellowship certificate in accordance with the Law of Certified Public Accountants, as such subparagraph will become effective on 20/12/2021G.
after the Rules draft was published on the Authority's website for 30 calendar days for public consultation.
The Rules aim to enhance the quality of the auditing engagements for the entities subject to the Authority's supervision, and get a better quality of the information required from the investors and the ease of accessing them, which will aid in enhancing the level of transparency and the investors' trust in the disclosed information and attract institutional investors by setting out the standards and conditions to be met by the auditors of entities subject to the authority's supervision, including conditioning their registration with the Authority in order to conduct auditing engagements for entities subject to the Authority's supervision and setting out the conditions and procedures for such registration. In addition to stating the continuing obligations imposed on the registered accounting firms and certified public accountants, the provisions of the suspension and cancellation of registration and the provisions of ceasing to carry on audit engagements for entities subject to the Authority's supervision.
The most prominent provisions of the Rules is conditioning the registration of the accounting firm and the certified public accountant with the Authority in order to conduct auditing engagements for entities subject to the Authority's supervision, and among the requirements to register the accounting firm and certified public accountants with the Authority is being licensed to practice the auditing profession in accordance with Law of Certified Public Accountants. Further, publishing the transparency report on annual bases is one of the continuing obligation imposed on the registered accounting firm.
It's worth mentioning that the Authority has prepared the Rules in light of the international practices in this regard. It has taken into consideration, while preparing the Rules, to consult the public, specialists and interested parties, and has conducted a workshop attended by a number of certified public accountants in the kingdom in order for them to provide their point of view on the Rules. The Authority took into consideration the comments and views provided in the public consultation stage to help in achieving the aimed objectives of these Rules. Among the most prominent amendments to the Rules, based on the comments and views received during the public consultation stage, is –but not limited to- the exemption of the accounting firm and certified public accountants carrying out auditing engagements for an Authorised Person licensed to carry on arrangement activities from the requirement of registration with the Authority, and making the financial information on the income of the registered accounting firm from entities other than those under the Authority's supervision, of a guiding nature in the transparency report of the registered accounting firm, in addition to extending the requirement of registering the certified public accountant of working in a supervisory level on the audit of the entities subject to the Authority's supervision for a period not less than three years, to include working in a supervisory level on the audit of the entities accepted by the Authority.
It should be noted that the Authority has announced on its website on 1/11/2018 the signing of a memorandum of understanding with the Saudi Organization of Certified Public Accountants, which aims to establish a framework for cooperation between the two bodies to identify and adopt the means of coordinating the tasks between them, and enhance the control and supervision measures under the supervision on auditors of the entities subject to the Authority's supervision.
The Rules can be viewed via the following link:
قواعد تسجيل مراجعي حسابات المنشآت الخاضعة لإشراف الهيئةRules for Registering Auditors of Entities Subject to the Authority's Supervision