Hiring a Chartered Accountant in Saudi Arabia: A Company Guide

A chartered accountant in Saudi Arabia is an accountant licensed to practice public accounting, which for most companies means auditing the financial statements and signing the audit report. Your company needs one when the Companies Law, ZATCA, a bank or a partner requires audited statements. Choose a firm by checking its license, its experience in your sector and the partner who will sign, not by price alone. This guide explains when you need one, how the audit runs, what to prepare and how to choose.

What a chartered accountant is

A chartered accountant is a practitioner, or a firm of practitioners, licensed under the law that regulates the accounting and auditing profession in the Kingdom. The license is what allows them to give an independent opinion on financial statements. Many firms describe themselves as chartered accountants and auditors; both terms point to the same licensed activity.

The Saudi Organization for Chartered and Professional Accountants (SOCPA) regulates the profession. It endorses the accounting and auditing standards applied in the Kingdom, runs the professional qualifications and reviews the quality of audit work. For a company, the practical point is simple: only a licensed practitioner can sign your audit report, and the report is only worth as much as the license and the work behind it.

The core service of a chartered accountant is the statutory audit. Many firms also offer Zakat, tax and advisory services, but independence rules limit what an auditor may provide to a company whose statements it audits.

When your company needs a chartered accountant

• The Companies Law: the Companies Law requires companies to appoint an auditor and sets who appoints them, usually the partners or the general assembly. Any exemption for certain companies by legal form or size comes from the law and its regulations as they stand, so confirm it before you rely on it.
• Filing financial statements: audited statements are filed electronically with the Ministry of Commerce on the Qawaem platform. The ministry publishes the filing deadline, and a late audit means a late filing.
• Zakat: the Zakat return of a company that keeps regular books is built on its financial statements, and many companies must submit statements audited by a licensed practitioner with the return. The current requirements are published by ZATCA.
• Banks, investors and tenders: banks assessing financing, investors in a funding round, buyers doing due diligence and many tender committees ask for audited statements, often for more than one year.
• Foreign-owned companies: a company licensed by the Ministry of Investment (MISA) reports under the standards endorsed in the Kingdom, and the parent group may need the Saudi audit to fit its own reporting timetable.

A sole proprietorship is not a company under the Companies Law, but a bank, a tender or a Zakat review may still ask it for audited statements, so check what applies to you.

How the audit runs, step by step

1. Engagement letter: the firm checks its independence, then agrees with you in writing on the scope (which statements, which year, and whether the Zakat return and support with the Qawaem filing are included), the timetable and the fee.
2. Planning: the audit team learns your business, your systems and your main risks, then sends a list of what it needs from you.
3. Fieldwork: the team tests balances and transactions: bank confirmations, customer and supplier balances, inventory counts, fixed assets, payroll, revenue and the Zakat calculation. Larger audits split this into an interim visit and a year-end visit.
4. Draft statements and adjustments: the auditor proposes adjusting entries where it finds errors, management decides, and the statements are finalized.
5. Management letter: many firms send a letter listing the internal control weaknesses they noticed. Treat it as a ready-made task list for next year.
6. Report and filing: management signs a representation letter, the partner signs the audit report, and the statements move on to the Qawaem filing and the Zakat return.

The first thing a bank or investor reads in the report is the type of opinion. An unmodified, or clean, opinion means the statements are fairly presented. A qualified opinion, an adverse opinion or a disclaimer of opinion signals problems you will be asked about, so deal with known issues before the auditor arrives.

Documents to prepare before the auditor arrives

• The commercial registration, the articles of association and their amendments, and the resolution appointing the auditor.
• The trial balance and general ledger for the year, closed and reconciled.
• Statements for every bank account, with year-end bank reconciliations.
• Aging reports for customers and suppliers, with the main contracts.
• The fixed asset register and the purchase invoices for additions.
• Inventory count sheets, if you hold stock.
• Payroll records: the wage-protection files on Mudad, GOSI contribution records, the employment contracts documented on Qiwa, and the end-of-service provision calculation.
• VAT and Zakat returns filed with ZATCA, and any assessments or correspondence.
• Loan agreements, leases and any related-party transactions.
• Last year’s audited statements and management letter.

Missing documents are the main reason audits run late and fees rise.

How to choose a chartered accountant

Search results for a chartered accountant are full of firm names in Riyadh, Jeddah and the Eastern Province. Whichever firm you consider, ask it the same questions:

• License: ask for the license details of the firm and of the partner who will sign, and check their status with SOCPA.
• Sector experience: ask which clients of your sector and size they audit, without needing names.
• Team: ask who will actually do the fieldwork and how much time the partner will spend on your file.
• Scope and timetable: make sure the quote states what it covers: the audit alone, or also the Zakat return, support with the filing and the management letter.
• Location and language: a nearby firm can attend inventory counts easily, and the team should be able to work in the language of your records.
• Independence: if the firm already keeps your books or prepares your Zakat calculation, ask how it protects its independence.

A cheap quote is not always a bad one, but it usually means fewer hours. Ask how many hours and which team members the fee covers. A thin audit can be rejected by a bank or questioned later, and then you pay twice.

Chartered accountant, accountant or bookkeeper: who does what

• A bookkeeper records daily transactions: sales, purchases, expenses and payroll.
• An in-house or outsourced accountant closes the month and the year, reconciles accounts and prepares the financial statements and returns.
• A chartered accountant, acting as external auditor, examines those statements and gives an independent opinion on them. The auditor does not prepare the statements it audits.

A company therefore needs both: someone to keep and close the books, and a separate licensed firm to audit them. Innovant can keep your books, close the year, prepare the schedules and reconciliations your auditor asks for and support you through the audit; the audit itself and the opinion come from the licensed firm you appoint.

Common mistakes

• Appointing the auditor at the last minute, when good firms are fully booked.
• Choosing on price alone, then finding extra fees for work outside the scope.
• Expecting the auditor to fix the books. An auditor tests your accounts; it does not keep them.
• Not reconciling banks, customers and suppliers before fieldwork.
• Ignoring the management letter, so the same findings come back every year.
• Forgetting that the Zakat return and the Qawaem filing both depend on the audit finishing on time.

Frequently asked questions

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