Oman: FSA suspends Abu Timam audit firm for one year

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Muscat – Oman’s Financial Services Authority (FSA) has suspended the audit firm Abu Timam Grant Thornton Chartered Accountants for one year, barring it from providing external audit services to entities regulated by the FSA.

The FSA’s decision, effective Sunday, August 25, 2024, requires all entities under its regulation to terminate their contracts with Abu Timam and appoint a new external auditor from the list of firms accredited by the FSA.

‘This decision was made due to the firm’s violations of applicable laws and regulations while auditing several companies listed on the Muscat Stock Exchange and other regulated entities,’ the FSA said in a statement on its website. ‘The firm accepted accounting practices that did not comply with International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA), compromising the integrity of financial statements disclosed to investors.’

The FSA’s statement detailed specific failures by the firm, including inadequate auditing procedures involving component auditors, issuing audit reports before completing thorough examinations of significant balances and transactions, and conducting inappropriate tests to verify reported balances. ‘The firm also failed to address discrepancies between financial and non-financial reports in annual reports. Additionally, it provided non-audit services to audit clients, violating legal requirements.’

The FSA has previously issued regulations governing auditing firms to ensure compliance with ISA and IFRS standards. The authority regularly evaluates the performance of audit firms through its regulatory examination teams, recognising the critical role these firms play in safeguarding investors and other stakeholders by providing accurate and reliable financial information.

The FSA urged all audit firms to maintain high standards of professionalism and integrity when reviewing and auditing financial accounts. The authority also emphasised the importance of conducting continuous internal quality reviews in accordance with ISQM-1, ISQM-2, and ISA-220 standards to ensure compliance with regulatory and professional requirements, thus avoiding any legal repercussions.