Many business owners in Oman aren't sure whether their company is legally required to be audited, or what a statutory audit actually involves. Here's a clear breakdown.
What Is a Statutory Audit?
A statutory audit is an independent examination of a company's annual financial statements, carried out by a licensed external auditor, to verify that the accounts give a true and fair view and comply with International Financial Reporting Standards (IFRS) and Omani regulatory requirements. The result is a formal audit report submitted alongside your annual financial statements.
Who Needs to Be Audited?
Under Oman's Commercial Companies Law, Limited Liability Companies (LLCs) and Joint-Stock Companies (SAOCs) are generally required to have their annual financial statements audited. Requirements can differ based on company structure, size, and shareholding — banks, government tenders, and free zone authorities may also independently require audited accounts regardless of statutory thresholds.
Who Can Conduct the Audit?
Only auditors and audit firms licensed by the Ministry of Commerce & Industry are legally permitted to issue statutory audit reports in Oman. Engaging an unlicensed party for a "audit" that must be submitted to authorities or banks can result in the report being rejected.
Documents You'll Need to Prepare
- Trial balance and general ledger for the financial year
- Bank statements and bank reconciliations
- Sales and purchase invoices
- Contracts and major agreements
- Payroll records and WPS reports
- Prior-year audited financial statements (for repeat audits)
- Fixed asset register
Having these organised in advance significantly shortens audit fieldwork and can reduce your audit fee.
What Happens After the Audit?
Once fieldwork is complete, the auditor issues a signed audit report along with the audited financial statements. These are typically submitted to the Ministry of Commerce & Industry, the Oman Tax Authority, and any banks or stakeholders requiring them. Auditors also usually issue a management letter with recommendations to strengthen internal controls.
Not sure if your company needs an audit this year? Ask Al Qabas for a free assessment.
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