| | (1) | A Licensee must appoint an external auditor (and must receive a non-objection letter from SAMA prior to doing so) to conduct an external audit. The appointed auditor must be subject to rotation on a five-year basis. |
| | (2) | The external auditor must be approved by the competent authorities in the Kingdom and must have no conflict of interest in acting for the Licensee. |
| | (3) | A Licensee must ensure that its terms of appointment with an auditor require that the auditor, at a minimum: | (a) | Carries out, for the year in respect of which the auditor is appointed, an audit of the financial statements or consolidated financial statements of the Licensee prepared in accordance with the financial and accounting standards and practices approved for use in the Kingdom; | | (b) | Carries out an audit of the transactions in relation to the regulated services (separately from any audit carried out on activities not related to regulated services); and | | (c) | Submits a report of the audit to SAMA in such form as may be prescribed by SAMA and within such timeframe as SAMA may allow (including separate accounting information in respect of regulated activities) In accordance with the provisions of the Implementing regulation. |
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| | 4. | SAMA may make further requests of the auditor, including but not limited to the following: | (a) | To submit any additional information in relation to the audit; | | (b) | To enlarge or extend the scope of the audit of the Licensee’s business; and | | (c) | To carry out any other examination that it requests in relation to the audit. |
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| | (5) | If SAMA is not satisfied with the performance of the auditor, SAMA may direct the Licensee to remove the auditor and appoint another auditor at the Licensee’s expense. |
| | (6) | The auditor’s reports prepared in accordance with this Article must be attached to the balance sheet and the profit and loss account, the financial statements or the consolidated financial statements of the Licensee, which must submit copies of these reports to SAMA in such form and time as may be prescribed by SAMA. |
| | (7) | A Licensee must ensure that its terms of appointment with an auditor require that, if the auditor believes that any of the following matters have occurred, the auditor must immediately report such matter to SAMA: | (a) | There has been a contravention of any provision of the Law and the Implementing Regulation or other applicable laws, regulations, decisions and instructions; | | (b) | A criminal offense involving fraud or dishonesty has been committed; | | (c) | Losses have been incurred that have led to the capital requirements
set out in the Implementing Regulation not being satisfied; | | (d) | There is any irregularity that has or may have a material effect on the accounts of the Licensee, including any irregularity that had caused a major disruption to the provision of any type of regulated service to the Clients of the Licensee; and
| | (e) | The auditor is unable to confirm that the assets of the licensee exceed the liabilities of the Licensee or satisfy another test of solvency applicable in the Kingdom. |
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| | (8) | A report made under Paragraph (7) of this Article must not be considered a breach of any restriction upon the disclosure imposed by any applicable laws, regulations or contractual terms. The auditor and its employees are not liable for any loss arising from the disclosure or any act or omission in consequence of the disclosure, provided that the auditor or its employees disclose in good faith to SAMA the following: | (a) | The knowledge or suspicion of any of the matters mentioned in Paragraph (8) of this Article; and | | (b) | Any information or other matter on which that knowledge or suspicion is based. |
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| | (9) | Except as may be necessary for compliance with the Implementing Regulation or relevant laws, regulations, or decisions, a Licensee must instruct the external auditor appointed in accordance with this Article not to disclose any information that comes to its knowledge in the course of performing its duties to any Person other than the Licensee or SAMA. |
| | (10) | If a Licensee or any of its employees intentionally commits the following
(or conspires with any other Person to do any such act), then they shall be
in contravention of the Implementing Regulation: | (a) | Prevent, delay or obstruct the carrying out of an audit; | | (b) | Destroy, conceal or replace any property, records or documents relating to the business of a licensee; or | | (c) | Sends out of the Kingdom any record, document or asset of any description belonging to or in the possession of or under the control of the Licensee. |
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