Regulating accounting professions in Saudi Arabia
The legal accounting profession is of great importance because of its role in ensuring companies’ compliance with rules and regulations.
It is also the responsibility of a chartered accountant to suggest remedies for any gap that may harm an establishment.
Given the crucial role of chartered accountants, it is important to ensure they do their jobs independently, whereas financial accountants provide their services in the internal accounting and finance departments of commercial establishments.
The Kingdom recently made some amendments to the regulation governing the accounting and auditing professions. The Saudi Organization for Certified Public Accountants was also renamed the Saudi Organization for Auditors and Accountants (SOAA).
In today’s article, we shall briefly review the key tasks of a chartered accountant as per the recently amended regulation.
Chartered accountants are obligated to sign and ratify all reports they issue. They must mention their names and license numbers in all official correspondence, reports, and data. They should also display their licenses in a prominent place in their office.
A chartered accountant must also abide by the rules of the profession, its conduct and ethics, and the technical standards approved by the SOAA.
During and after completing their duties, accountants should ensure that documents, copies of reports and financial statements are preserved for no fewer than 10 years from the date of issuing reports for each financial year that they review. They should also provide the organization with the reviewed financial statements and final reports whenever requested.
Due to the sensitivity of this profession, the Kingdom has intensified its efforts to localize all jobs in the field. For this purpose, a chartered accountant must employ a specific percentage of Saudis in his firm.
Concerning prohibitions, a chartered accountant is prohibited from auditing the accounts of companies or institutions in which he has a direct or indirect interest. He should be careful not to exceed the maximum limit of the number of listed joint-stock companies determined by the Capital Market Authority, or the number of unlisted joint-stock companies, which he can work on and review annually.
A chartered accountant is prohibited from disclosing any information relating to any of his clients obtained through his professional work, or using it for his benefit, except with the express consent of the customer or at the request of authorities.
All these tasks related to auditing the accounts of joint-stock companies and the accounts of banks, public authorities, and institutions, can only be carried out after five years from the date of obtaining the license.
Concerning penalties, and without prejudice to any penalty stipulated in another regulation, a chartered accountant shall be punished with imprisonment for a period not exceeding five years and a fine not exceeding SR2 million ($533,333) or by one of these two penalties if he submits incorrect data or forged certificates, obtains a license or misleads others by any means to create an impression that he has the right to practice the profession while he is not licensed, or his license has been canceled, or he has been suspended from practicing.
The stipulated penalty shall also be applied if a chartered accountant submits false statements or conceals data that should have been shown in any report, account, or document during his practice of the profession, or if he certifies a report contrary to the truth.
The Public Prosecution shall investigate the crimes mentioned above and consider filing a criminal case against the erring professional.
• Dimah Talal Alsharif is a Saudi legal consultant, head of the health law department at the law firm of Majed Garoub and a member of the International Association of Lawyers. Twitter: @dimah_alsharif