After setting up a business in Saudi Arabia, the shareholders and managers have various duties and responsibilities towards it. Some of these are related to respecting specific accounting and audit requirements in accordance with the legislation in place.
For matters related to the taxation of companies, one can request specific services from accounting and audit firms in Saudi Arabia. This way, the workload in the accounting department is lower.
If you need audit services for your company in Saudi Arabia, our specialists are at your disposal. We can also assist in company formation matters in Saudi Arabia.
Specific legislation respected by audit firms in Saudi Arabia
When requesting the services of an audit firm in Saudi Arabia, you should note that this must respect a few laws that provide for the accounting and audit requirements imposed on all types of companies.
Among these is the Companies Law that was last amended in 2016. Also, the Banking Control Law applies in terms of accounting and auditing of financial institutions.
Company audits must respect the International Financial Reporting Standards (IFRS) and which must be provided in accordance with the regulations imposed under the Certified Public Accountants Regulation No. M12. The activities of audit firms in Saudi Arabia are overseen by the Saudi Organization for Certified Public Accountants (SOCPA).
The following types of entities are subject to audit requirements in Saudi Arabia:
- private limited liability companies and partnerships;
- joint-stock companies.
These must have their annual financial accounts audited. For this purpose, business owners can use external services in audit firms in Saudi Arabia.
Audit requirements in Saudi Arabia
Companies are subject to different audit requirements based on the industry they operate in and their size. For example, joint stock companies and limited liability partnerships must appoint an independent auditor in order to have their accounts verified every year. Banks and insurance companies must appoint at least two independent auditors that can complete the due audits of their accounts.
The auditors must be certified public accountants (CPAs) and must be members of SOPCA. Because an independent auditor must be appointed every year, many companies choose the services of outside audit firms in Saudi Arabia.
For more information on the accounting requirements a business must respect, our Saudi company formation specialists are the service of foreign investors who want to get acquainted with the local regulations. We can also make recommendations on the audit services they can use in order to make sure their companies comply with the national legislation.
Services that can be obtained from an audit firm in Saudi Arabia
All audit firms in Saudi Arabia can offer one or more services, based on their size and number of accountants and auditors they work with:
- internal or operational audits for business owners who want to measure the performance of their companies (these are not mandatory);
- external audits that can be completed in order to analyze the financial operations of a company;
- statutory audits that must be completed every year by independent auditors who must also draft reports based on their activity and findings.
If you need audit services in Saudi Arabia, our specialists can make various recommendations.
How is an audit performed in Saudi Arabia?
Saudi companies requiring audit services can appeal any time they want to evaluate their performances outside the legal requirements to do so. The independent auditor will verify the documents that can reflect the situation of the business and make proposals based on the reasons the audit was requested for.
Such a verification does not necessarily cover the financial situation of a company, as organizational and quality audits are also often requested from Saudi audit firms.
When it comes to the statutory audit, however, there are specific steps that need to be completed. Among these, the company managers must put at the disposal of the auditor all the relevant papers in order for the latter to verify them and draft a report. Then, the report will be submitted for approval by the shareholders.
The following audit requirements must be met by Saudi companies:
- the shareholders must meet once a year;
- a financial report on the company’s activity must be prepared within 3 months from the end of the financial year;
- financial statements must be met by the 31st of March of the current year for the past one.
For more information on the services provided by audit firms in Saudi Arabia, please contact us. We can also help in immigration matters. The temporary Saudi residence permit is the first one issued to most foreign citizens. It has a validity of one year and can be obtained by various means. One of the most common is employment. For this purpose, we invite you to discover the requirements to qualify for both residency and work visas for Saudi Arabia.