l'l LAW ORGANIZING THE ACCOUNTANCY ANDAUDITING PROFESSION

PART (1)REGISTRATION AND THE CONDITIONS OF PRACTISING THE

PROFESSION

Article (1):The profession of Accountancy and Auditing shall not be practiced in the Sultanatewithout obtaining the required licence from the Ministry of Commerce and Industryaccording to the conditions and rules stated in the this law.

Article (2):A special register shall be prepared for enrolling the accountants and auditors(account controllers) in the Professions and Craft Section) Company AffairsDepartment, Ministry of Commerce and Industry. The said register shall include thefollowing schedules:

(1) Schedule of Accountants under Training.(2) Schedule of Accountants and Auditors (Account Controllers).(3) Schedule of Accountants and Auditors who are not practicing the profession.An Account controller wishing to retire shall request the Ministry to shift his/hername to the schedule of non practicing within thirty days. The account controller mayenroll hislher name again in the schedule of Accountants and Auditors who practicethe profession if he/her desires to resume practice of the same.

Article (3):For enrolling any person in the mentioned Register the following conditions should befulfilled:

(l)He should be of Omani Nationality and wholly dedicated to practice the profession;(2)He should have a University qualification in Accountancy or a Chartered

Accountant Certificate which is acknowledged internationally or its equivalent;(3)He should have full capacity;(4)He should be of good reputation and good character, and(5)Has not been convicted either judicially or administratively of a felony or

dishonorable crime unless he has been rehabilitated.

Article (4):The name of any person who practice accountancy for the first time shall be registeredin the register of under training « Accountants under training". He shall not open anoffice for accountancy and auditing under his personal name unless he is enrolled inthe Schedule of Accountants and Auditors (account controllers).

Article (5):To transfer the applicant's name from the schedule of «Accountants under training» tothe schedule of Accountants and Auditors (account controllers) the applicant shouldhave completed a period of at least two years in active continuous training onaccountancy and auditingwork. The training should be certified by a certificate issuedby the Accountant or by whoever he worked with.

The accountant shall not audit the accounts of joint stock companies and the accountsof banks and public establishments unless five years have elapsed after the date ofobtaining the licence Or if he is qualifiedas mentioned in sub-section (b) Article 7.

Article (6):It will be counted within the period of training all the periods in which the applicant hasworked as an accountant, assistant accountant or chief accoWltant in any lawfullyregistered company or in practicing accountancy profession in his private office beforethe implementation of thi.slaw , or with an office of any accountant or auditor who islicensed to practice the profession in other countries, or in any other equivalentjob.The equivalent jobs shall be determined by a decision issued by the Minister ofCommerce and Industry.

Article (7):The following will be exempted from enrollment in the schedule of accountants undertraining and will be enrolled directly in the schedule of accountants and auditors(account controllers):

(a)Any person who prov~s the required training conditions and other conditionsstipulated in this law;

(b)The persons who are holders of the certificate of Chartered Accountant or itsequivalent.

o Article (8):The Omani accountants and auditors may obtain a licence to establish amongthemselves offices or firms of accountancy or auditing if they fulfillthe conditionsrequired for enrollment in the schedule of accountants and auditors (accountcontrollers). Such companies shallbe enrolled in schedule No. (2) of Article (2). Insuch cases the partners may not practice the profession individually.

The company shall take the form of any commercial company except particularpartnership companies and joint stock companies. The Articles of incorporation of thesame shall include the type of the company) address) intention, main office, duration,the origin of each partner, capital of the company, the fiscalyear of the same andmethod of management.The regulations of commercial companies law shallprevail unless otherwise providedin the mentioned articles of incorporation . Such shallbe executed in a manner thatdoes not contradict with the nature of these companies.

Article (9):Foreign offices and, foreign accounting and auditing companies may not be enrolled inschedule (2) of Article (2) . Such foreign offices and companies may not practiceauditing in the Sultanate unless it is established in partnership with an Omani partnerin accordance with the following terms:

accounts and statements attached to, and supervise their application by accountancyoffices. Such accounting principles shallbe issued by a decision from the Minister ofCommerce and Industry.

Article (12):Applications for licences to practice the profession should be referred to theCommittee mentioned in the preceding Article and after ascertaining that the applicanthas fulfilled the required conditions, the committee shall order his registration for arenewable period of three years. If the committee found that the applicant has notfulfilled the conditio~ it shallpostpone its decision on the application and summonsthe applicant by a registered letter to attend before it for any explanation. If theCommittee decides to reject the application, reasons shallbe given for its rejection. theCommittee should decide on the application for registration within a period notexceeding three months from the date of its submissionand immediatelynotifYtheapplicant by a registered letter of its decision. lfthe mentioned period expired withoutgranting the licence it would be deemed as rejection of application.

Article (13):The applicant whose applicationwas rejected may appeal to the Minister of Commerceand Industry against that decisionwithin thirty days from the date of his notification. Ifthe mentioned period expired, or if the rejection. of his appeal was due to badreputation or for conviction either judicially or administrativelywith a dishonorablecrime, the applicant should not submit a new applicationbefore the expiration of twoyears from the date of the rejection of his application, provided that he should provehis good reputation during that period.If the rejection of the appeal was due to non-fulfillment of other conditions, theapplicant may submit a new application for registration as soon as he fulfillsthatcondition.

Article (14):On accepting his application and condition of registration the applicant shall receive acertificate stating the following:(1) The date and SerialNumber of Registration;(2) The name, age and nationality;(3) The address and domicile;(4) Qualificationsand ..(5) Accountancy associations, if any, in which he 1S a member.

CHAPTER TWOFIGHTS AND OBLIGA nONS

Article (15):

No ~erson whose ~e is registered in the Accountants and Auditors' Register shallpractJce other contradictory professions. Such professions shall be specified by adecision from the Minister of Commerce and Industry upon a proposal from theRegistration Committee.

Article (16):Any person - natural person- granted a licence to practice the profession shall, beforecommencing his work, give the following oath before the Minister of Commerce andIndustry or to whom he may delegate:" I swear by All Mighty God to perform myprofession honestly, maintain its secrecy and respect its laws and traditions".

The oath shall be written in a minute and , shall be signed by the person who takes theoath. A representative of foreign offices and companies shall sign a declaration whichincludes his affirmance that the office or company shall practice its job in trust andverity, and shall maintain the secrecy of such jobs, and respect the laws of the countryand its traditions.

Article (17):No auditor or accountant shall audit for companies in the two following cases:

(a)If he is a partner in the company which he audits, be a member of the board ofdirectors of such company , or performs any administrative service in suchcompany, or owns a minimum limit of shares specified by the Executive

Regulations of the same.(b)If he is close to grade one, from the person in charge of managing the company

or its accounts.

They are both prohibited from the following:

(a)Reveal the secrets of the work or allow any person to go through them exceptto those entitled by the law.

(b)Buy the shares of companies which he audits its accounts , or sell the sameduring the period of auditing.

Article (18): .Auditors of joint stock companies and limited liability companies shall have the n~ht toexamine all books, records and documents of the com~any an~ to obtaln allinformation they deem necessary for proper performance o~th~ .functions. They shallprepare their report to the general meeting setting forth theIr op1tl1onas to whether t~ebalance sheet and statements of profits and loss submitt~d ~etlect the finanCIalcondition of the Company in accordance :vith ,the acce~ed pnnclples of accountancyor not, and shall report to the meeting any vlOlatlOnthey dISCOVer.

Article (19):Each accountant and auditor should indicate his name and his number of registrationin all the correspondence, certificates, balance sheets and reports which he signs. Theauditor of office owner shall sign by himself auditing reports issued by his office.Such reports shall, in cases of auditing companies, be signed by one of the partners ormanagers who comply with terms provided in Item (4) of Article (9) . He may notappoint someone to sign on his behalf unless that person complies with the temlSprovided in law.

Article (20):Any person whose name is registered in the Register of accountants and auditorsshould notifY the Professions and Crafts Section. Companies Affairs Department,Ministry of Commerce and Industry, of his office address within 30 days from the dateof registration and of any change in the address thereof.

Article (21):Notwithstanding the rules imposed by the Companies Law, the Insurance CompaniesLaw and the Banking Law, auditors should audit the accounts of companies,individualsand establishments in accordance with the provisions regulation them in each law andthe accountancy principles, and prepare the balance sheets and the statements, andsubmit the technical reports of the results ofms performance. The auditors shall beliable to the Company, the shareholders and third parties for the damages caused byany fraudulent act committed by them in performing their duties, or by their failure toperfonn their duties adequately according to law.

Article (22):On expiration of the procuration the accountant shall deliver to his principal all papersand documents which he demands, and if he wished to give up work he should notifyhis principal with that wish and shall continue in performing his duties for a reasonabletime so as not to harm. In any case, the auditor shall keep all auditing files for a periodoften years after the year which the auditing took place.

CHAPTER THREEPENALTIES

Article (23):The Director General of Conunerce may~ upon complaint filed to him or when aviolation of any provision or condition stipulated in this law is committed by anylicensed person) conduct an investigation against the licensed person who is accused ofcontravening the ethics of the profession or the principles of accountancy, or who losesany of the conditions required for registration, or who is found lacking them beforeregistration. After that he shall refer the matter to a Committee to be set up at theMinistry to examine those violations and determine the appropriate penalties accordingto this law and notwithstanding any procedures or penalties stipulated in or imposed byother laws.

Article (24):The Committee mentioned in the preceding Article shall consist of three memberstulder the Chairmanship ofthe Under Secretary of the Under Secretary of the Ministryof Commerce and Industry and two members from the accountants to be appointed forrenewable two years period by a decision issued by the Minister,

Article (25):The mentioned committee shall decide on the referred violations after summoning theaccused for appearance by a registered letter at least 15 days before the fixed date ofits session. The letter should indicate the imputed violations, date and place of session.The accused may submit his defence orally or in writing, by an advocate or a colleagueas his agent. If the accused fails to appear despite the summons the verdict may begiven in his absence.

Article (26):The Committee may punish the offender with one of the following punishments:

(a)Warning. .'(b)Suspension from practising the profession for a penod not ~ceedmg two years.(c)Deleting the name from the register.

Article (27):(a)Any person punished with any of the aforementioned punishments ~ay ~o~ge an

appeal before the Minister of Commerce an~ Ind~stI?' against the verdIct WIthin aa period of (15) days from its date if it was gtven In his presence of from the date of

notifYing him with verdict by a registered letter ifit was given in his absence. If the

appeal is submitted within the fixed time the execution of the verdict should be

postponed until the .finaldecision of the Minister of Commerce and Industry who

may quash or reduce the sentence. The expiration of(60) days after submitting the

appeal without a decision being issued shall be deemed as a rejection of the appeal.

(b) Any person who has been canceled out of the Register in accordance with the

provision of this law, may apply for reregistration after a period of (5) years

since the issue of the decision of cancellation. Terms and procedures of registrationare applied during reregistration.

CHAPTER FOURGENERAL RULES

Article (28):The rules and conditions provided for granting licences to the Omanis shall be appliedonly to the citizens of the Gulf Co-operation Council States.

Article (29):The licence for practicing the profession shall be valid for three years provided that theregistration in the register is renewed every three years from the date of enrollment orrenewal on the form prepared by the Professions and Crafts Section in the Ministrytwo months at least before its expiry date.

Article (30):The accountants are bound to apply the Intentional Accounting Standards approvedby the Committee of the unified International Accounting Standards on preparingbalance sheets and the final accounts, until a decision is issued by the Minister ofCommerce and Industry stating the accounting standards which shall be applied onpreparing the balance sheets and the final accounts etc.

Article (31):The fees for registration in the register and its renewal , and the extraction ofinformation from the Register by the Executive Regulation of ~heLaw shoul~ ~otexceed (30) R.O. per person, and (100) R.O. fo~ Accountm~ and AudltJ.ngCompanies owned by Omanis only, and (200) R.O. for mIxed comparues.

009 15"05 958-57132409114/1J',uW·c.l{S & HAMLINS

(l'O~M"Rl Y KNOWN AS TROWER STILL'" klOEl-INv)

MINISTERIAL DECISION

The Ministry of Commerce and Indust~y

After perusal of Royal Decree 77/86 issuing the Law on theOrganisation of the Accountancy and Auditing Profession, and

tn accordance with the exigencies of pUblic good,Has decided as follows:

The following shall be "equivalent" to the posts referred to inArticle 6 of Royal Decree 77/86:

Chief Accountant, accountant, auditor or assistant accountantwith the government or any pUblic authority.

Auditor of any legally registered company.

Financial manager, deputy manager or head of a financialsection in any legally ~egistered company.

Manager of any office of accountants or aUditors who arelicensed to practice the profession.Auditor in any office of accountants or auditors who arelicensed to practice the profession.

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~ Article 2:This decision shall be published in the Official Gazette and shallbe effective as from the date of publication.

Salem Bin Abdullah Al GhazaliMinister of Commerce and Industry

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ROYAL DECREE 21/88

INTRODUCING AMENDMENTS TO THE LAW ON THE ORGANISATION OF THEACCOUNTANCY AND AUDITING PROFESSION

After perusal of Royal Decree 26/75, isstiing the Law Setting Up theAdministrative Apparatus of state and amendments thereto;

Royal Decree 77/86, issuing the Law on the Organisat ion of theAccountancy and Auditing Profession; and,

ARTICLE ONEThe amendments at tached hereto are made to t~e above men~ioned Lawon the organisation of the Accountancy and Audlting Professlon.

ARTICLE TWOThis Decree shall be published in the Official Gazettecome into force as of the date of such publication.

~, Qaboos Bin said,'0 sultan of Oman.

Gazette Issue No. 378 dated 1st March 1988] \(Published in the Office t

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09/14/2009 15:05 958-571324n " :T" TROWER, STILL & KE.EUNG

AMENDMENTS TO CERTAINORGANISATION OF THE ACCO::T~Vi~iONSOF THE LAW ON THEAND AUDITING PROFESSION

ARTICLE ONEThe undermentioned Articles of t .Accountancy and Auditing Prof i he Law on the Organisation of theess on are hereby amended.

Article 3Clause 2 of th'lS Article is amended to read as follows:2. He shall possess aU' ,Commerce, proVided th::ve~~1.ty educational qualification insubJ"ect of A e course of study l.'nclud S thccountancy, or the qualifl'catl"on e eAccountant. of Chartered

Article 4This is amended to read as follows:The name of anyone who practices accountancy for the first timeshall be included in the list of Accountants Under Training He mayno~ open an offi?e in ~is ?ersonal name for accountancy and' auditingprlor to its reglstratlon In the register of Accountants.

Article 8This is amended to read as follows:

Omani Accountants and Auditors are authorised to set up firmsor companies for the purpose of practicing Accountancy orAuditing, provided theY meet the conditions fixed forregistration in the Regis~er of Accountants and Auditors.

Article 9Clauses 2 and 3 of this Article are amended to read as follows:

A period of ten years shall have passed since the founding ofthe firm or the company and during this period it should havepractised AccountancY and Auditing continuously.The period shall be reduced to five years in respect of theoffices and companies licenced to operate in the sultanate atthe time of the promulgation of this Law.

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- TROWER. SiILL. 8. KEELING

3. ~he representative of the' branch of the company in theSultanate shall possess a minimum of ten years' experienceafter obtaining the University qualification or a minimum ofsix years experience after obtaining a Master's Degree inCommerce or a minimum of three year s' exper ience afteJ:"obtaining a Doctorate in Commerce.He shall also have obtained the qualification of CharteredAccountant.However, if the representative of the Branch or the 'Company isan Omani national, it is sufficient for him to meet theconditions prescribed for Omani Accountants in this Law.

Natural persons who are granted an authorisation to carry outthe profession shall, before starting to practice, take thefollowing oath in the presence of the Minister of Commerce andIndustry or his representative:'I swear by Almighty God that I shall carry out my professionhonestly and in good faith and that I shall. maintai~ .theconfidentiality of the profession and respect lts tradltlonsand the Laws of the country.This oath shall be entered in a register: to be signed by thepersons taking the oath.In respect of foreign firms and companies, the representat~veof the firm or the company shall sign an affirmat10nincorporating an undertaking by him to the effect that theoffice or the company shall carry out its dutie~ w~th hone~~~and sincerity and shall maintain the confident~allty °i theprofession and respect its traditions and the Laws acountry.

ARTICLE TWOl'S added to Article Fourteen, to read as follows:A new Clause

Article 14(2)

Inbe

the following details shallt of the firm or company,respec tif' ate'specified on the cer 1C .

number and date of registration,Serialand its nationality,Name of the firm or company

Address in the sultanate.