In the latest of our legal updates following the introduction of the new Commercial Companies Law (SD No. 18/19) (New CCL), we focus on the provisions dealing with accounts and auditors of joint stock companies in the Sultanate of Oman. Review of the relevant provisions of the New CCL reveals that action has been taken to expand on the provisions of the old Commercial Companies Law (SD No. 4/74) (Old CCL) and to implement tighter controls on the preparation of accounts and the appointment of auditors.

In this article, we highlight a number of key changes in this area which will affect joint stock companies moving forward.

Accounting and audit standards

Article 209 of the New CCL states that a company's financial statements must now be prepared in accordance with the International Financial Reporting Standards (IFRS) and that audits must be conducted in accordance with the International Standards on Auditing (ISA). The New CCL goes further to state that the "Competent Authority" (i.e. the Capital Markets Authority (CMA) for public joint stock companies and the Ministry of Commerce and Industry for closed joint stock companies) has discretion to approve other standards which do not contradict IFRS or ISA. The Old CCL did not specify any requirements in relation to accounting or auditing standards, but these were included in the Income Tax Law (SD 28/09 (as amended)) (Tax Law) – the amendments introduced by the New CCL are clearly an attempt to introduce uniform practice for joint stock companies in these areas and ensure alignment with the Tax Law.


The board of directors are now under an obligation to rectify any errors identified in financial statements prior to the company's annual general meeting (AGM) and send details of those errors to the company's shareholders prior to the AGM. However, the New CCL does not provide a specific deadline for such notification being given to the shareholders. If the board is unable to remedy the errors prior to the AGM, then consideration of the report containing the financial statements shall be deferred unless the errors are immaterial. Note that the board of public joint stock companies must now also provide the CMA with a copy of the report following correction. This new provision, set out in Article 218, is a new obligation which was not addressed in the Old CCL.

Termination of an auditor's appointment

Article 222 of the New CCL provides that a company may dismiss an auditor by virtue of a resolution adopted by an ordinary general meeting and that a replacement auditor shall be appointed at the same meeting. The New CCL states that the Executive Regulations to the New CCL, which are anticipated to be published no later than April 2020, will provide further detail regarding the termination of an auditor's engagement with the company. The Old CCL did not contain any provisions which expressly dealt with the dismissal of auditors, but the Executive Regulations should provide greater clarity on this point when published.

Auditor credentials

The New CCL has introduced a requirement for the appointment of auditors, with Article 219 stating that they must be "accredited to the Competent Authority (i.e. the CMA)". This goes further than the requirements of the Old CCL which simply stated that the auditors must be "licensed to practice the profession of accountancy and auditing". It should be noted that this requirement is already in place for public joint stock companies by virtue of Administrative Decision 9/04, issued by the CMA, setting out accreditation for auditors regulated by the CMA. However, the drafting of the New CCL appears to indicate that this requirement will now also extend to closed joint stock companies.

As highlighted in one of our previous articles on the New CCL (" 10 key changes for joint stock companies"), companies have been given a grace period of one year to align their policies, procedures and constitutional documents with the provisions of the New CCL. 

Dentons has operated in the Sultanate of Oman for more than 38 years and has extensive experience in advising both closed and public stock companies in a variety of areas, including corporate governance, as well as compliance with a variety of laws and regulations. Please do not hesitate to get in touch with a member of the team should you have any queries relating to the New CCL or how it might impact you doing business in Oman.

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