Big4 banned on auditing companies in Saudi Arabia by Regulator
It is reported that Deloitte LLP may be obstructed from auditing companies in Saudi Arabia after the country’s market regulator communicated to firms registered in the kingdom to stop using its local services, according to reports.
The Capital Market Authority stated in the circular dated Nov. 27 that publicly traded companies it regulates should avoid working with Deloitte’s Saudi Arabian practice as of June 1. The ban could be revoked if Deloitte resolves a dispute the regulator didn’t specify. The matter relates to Deloitte’s audit work for a construction-industry services provider based in Dammam, Saudi Arabia.
The kingdom, the largest Arab economy, is tightening rules on corporate governance as it plans to open its $500 billion stock market to foreigners next year. The CMA, as the regulator is known, last month initiated a probe to determine if Etihad Etisalat Co. violated rules after the telecommunications company blamed auditing errors for a drop in profit that led to a stock market sell-off.
“It seems clear that the CMA is cracking down on auditing standards as it prepares for the opening of the stock market to foreign investors next year,” Shrouk Diab, assistant vice president of research at NBK Capital exclaimed.
Deloitte operates in the kingdom as Deloitte & Touche Bakr Abulkhair & Co., and has had a practice there for more than 50 years, according to its website. It audits 35 listed companies in Saudi Arabia.
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