Oman's market regulator restricts non-audit services of audit firms

Business Monday 18/April/2016 19:14 PM
By: Times News Service
Oman's market regulator restricts non-audit services of audit firms

Muscat: Oman’s market watchdog Capital Market Authority (CMA) on Monday said that auditors are allowed to provide only three non-audit services for their audit clients, against 13 such services allowed earlier. However, they can provide all their services to companies that are not their clients.
The market regulator said that audit firms are now allowed to carry out three non-audit services - audit related services, taxation advisory services and investigation of matters arriving from auditor findings or observations – to their audit clients, according to a CMA circular.
Across the globe, regulators are putting increased emphasis on the independence of auditors. Accordingly, the CMA has reviewed a circular issued in 2009, which allowed 13 non-audit services for their clients.
Under the new regulation, audited-related services that are allowed for their clients now include review of interim financial information reporting required by law, reporting on government grants, reporting on regulatory grants and reporting on internal financial control when required by law.
Likewise, taxation advisory services are subject to certain criteria. Auditors are also allowed to investigate matters arriving from auditor findings or observations related to audit of financial statements or misappropriation.
The CMA has already forwarded the new regulation to all listed companies, funds and audit firms and the new regulation becomes effective from today. As many as 130 companies are listed on the Muscat Securities Market (MSM).
The market regulator also said that the maximum fee on non-audit services should not exceed 25 per cent of average audit fee paid by the client (company) for the last three years. Any violation of this regulation will attract penal action by the regulator, which include suspension or even cancellation of licence of the auditor.