Accountancy firm says it will cooperate with Capital Markets Authority investigation
Accountancy firm Deloitte & Touche has said it will fully cooperate with Saudi Arabias Capital Markets Authority (CMA) after the regulator issued an advisory notice to CMA-regulated companies to avoid using the firms auditing services pending the outcome of an investigation.
Deloittes Saudi Arabian affiliate Deloitte & Touche Bakr Abulkhair is facing a ban from auditing companies in Saudi Arabia from 1 June 2015.
US news agency Bloomberg on 1 December reported that the CMAs Committee for the Resolution of Securities Dispute issued a circular on 27 November to CMA regulated companies in the kingdom advising that they should not work with Deloittes auditing division from 1 June 2015.
The ban will not affect Deloittes non-audit services.
While the CMA has not publicly given a reason for its notice, Bloomberg reported that the notice related to audit work done by Deloitte & Touche Bakr Abulkhair for local construction company Mohammad Al-Mojil Group (MMG).
In a statement to MEED, Deloitte confirmed the move and said it would cooperate fully with the CMA investigation.
On November 27, 2014, the Saudi Capital Market Authority (CMA) issued a circular referring to a decision by the Committee for the Resolution of Securities Disputes (CRSD), in reference to an investigation of a former audit client of Deloitte & Touche Bakr Abulkhair & Co. (the Firm), said the statement.
The circular advises them on engagements with Deloitte & Touche Bakr Abulkhair & Co. in relation to audit services from 1 June 2015 until the case is concluded, and the instructions are directed only to listed companies and entities authorised by the CMA.
The CMA circular does not extend to the firms non-audit services, nor to audit services provided to other companies and entities not regulated by the CMA and operating and doing business in Saudi Arabia.
Although the Firm is surprised at the Committees decision, the firm respects the CMAs important role in regulating the Saudi capital markets, and intends to fully cooperate with the CMA. The Firm will also be actively engaging with the CMA, as well as other regulators and relevant stakeholders, to address this matter as soon as possible towards a satisfactory resolution.
Deloitte has operated in Saudi Arabia for over 50 years and according to research by Bloomberg, is the auditor for some of the kingdoms biggest listed companies including Saudi Telecom Company (STC), Al Rajhi bank, and Yanbu National Petrochemicals Company (Yansab).
Bloomberg reports that the CMA has filed a case against Al-Mojil officials, who were there between 2008 and 2011 during its initial public offering, the regulator said on 11 November. During that period Deloitte acted as an auditor to the company.
Al-Mojil shares havent traded since July 2012 when they were suspended after losses triggered mandatory reporting rules that it didnt fulfill.
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