Muscat: For the smooth follow-up and evaluation of audit firms, Oman's Capital Market Authority (CMA) has specified two years for the renewal of audit firms, Mohammed Said Al Abri, the Vice President for CMA, said.
He said that the rules for the accreditation of audit firms come as part of CMA's concern to develop audit firms and ensure their compliance with laws and regulations. This is in addition to assuring the soundness and accuracy of financial statements prepared by public listed companies and their compatibility with international accounting standards and disclosure to investors, which would reflect positively on the confidence of the public in the Muscat Securities Market (MSM).
CMA issued administrative decision No. 8/2018 relating to the issuance of rules for the accreditation of auditors.
Al Abri said the rules on the licencing term for audit firms are for two renewable years to practice auditing processes of the companies regulated by CMA.
He said the move comes to ease the process of follow-up and evaluation of the firms to ensure they meet the requirements of professional conduct according to the required standards of efficiency and quality of professional performance. This is 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 advancement to serve the national economy, besides providing protection to investors through sound statements to take informed investment decisions.
The rules in Article (6) provide that the accreditation will be issued for two years after the 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 show 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 state that the audit firm requiring to be accredited by CMA must have at least five years of experience in auditing, besides proper professional competency and a sound reputation in auditing; shall not be deprived from practicing the profession or have any action imposed on it for committing a professional error or legal violations; have 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 accountancy; shall be full-time employees of the firm and three of them, including the partner, must have experience of not less than ten years in auditing after obtaining the professional qualification.
The rules emphasised that the auditor shall be obligated to render the service and shall not render any additional services that might impact its independence and impartiality.
The legislature authorised the Executive President of the CMA to impose penalties in case of breach of the rules ranging from warning to suspension for a specific period or deregistration with CMA and recommendations to the relevant company to appoint another auditor.