Major audit firms in Oman to meet market regulator chief

Muscat: Top-level officials of four major audit firms in Oman are going to meet the chief of Capital Market Authority (CMA) to seek clarification on certain regulatory restrictions on non-audit services to their clients.
The audit firms will also seek definitions of certain terminologies in the new circular and time frame for implementing the new decision. The meeting will be on Thursday with the executive president of CMA, Abdullah bin Salim al Salmi, said Kenneth Macferlane, country senior partner, PricewaterhouseCooppers (PWC).
The market regulator last month said that audit firms are now allowed to carry out only three non-audit services — audit related services, taxation advisory services and investigation of matters arriving from auditor findings or observations — to their audit clients. Across the globe, regulators are putting increased emphasis on the independence of auditors. Accordingly, the Capital Market Authority has reviewed a circular issued in 2009, which allowed 13 non-audit services for their clients.
Davis Kallukaran, managing partner of Crowe Horwath, earlierwelcomed the regulatory restriction in providing non-audit services to their clients. However, he has requested the authorities to reconsider certain restrictions on non-audit fees.
“The new regulation restricting the scope of activities that can be undertaken by statutory auditors to their listed clients is a welcome decision,” Davis Kallukaran, managing partner of Crowe Horwath Oman, earlier said. He addedthat this would bring in more independence and transparency to the financial reporting.
However, Kallukaran noted that restricting the activities to three and restricting the fees from such activities to be not more than the 25 per cent of the audit fees is tricky.
“Auditors come across quite a lot of information and situations while carrying out the audits. It requires time and efforts of people with the right skills and experience outside the audit to analyse and report the information,” he said
While statutory audits are considered to be a routine affair, the other services of taxation, interim reporting and forensic audits is executed by partners and team with the right skills, knowledge and expertise gathered over so many years and it is costly.
It is still not clear whether the 25 per cent limit on other services also include associate and subsidiary companies of the audit client.