The Financial Services Authority (FSA) has issued a decision to deregister the firm Maganlal Thacker & Co. from the register of accounting and auditing firms, due to violations related to the Law Regulating the Accounting and Auditing Profession and the International Standards on Auditing (ISA). The decision was published following the review of an appeal submitted by the firm regarding the FSA’s decision, which was ultimately upheld, thereby confirming the deregistration.

The decision was based on the firm’s violation of Article (9) of the Law Regulating the Accounting and Auditing Profession, which governs the conditions for registering foreign accounting and auditing firms. The firm failed to comply with the requirement to have a partner from the Sultanate of Oman actively participating in audit work, as well as the requirement to provide added professional value through the foreign firm’s expertise. The firm also violated Article (19) of the same law by allowing the audit engagement partner to sign audit reports on behalf of the firm, rather than using their personal signature. This resulted in the inability to identify the responsible engagement partner and a lack of professional accountability for the audit.

From a professional standpoint, field inspections conducted by the FSA revealed that the firm had breached several International Standards on Auditing, affecting the quality of audit work and the credibility of its reports. These violations included the absence of sufficient and appropriate audit evidences which support the audit opinion, failure to determine materiality for the financial statements and for audit execution purposes, and the lack of audit procedures to verify the physical existence of material inventory balances. In addition, the firm failed to perform required audit procedures related to transactions with related parties, which are fundamental requirements under international auditing standards.

The FSA said that this decision reflects its commitment to strengthening compliance with the laws and regulations governing the profession and ensuring adherence to best professional practices. It stressed the importance of all regulated entities complying with applicable laws, regulations, and standards, in order to protect rights of investors and reinforce trust, integrity, and transparency in the financial market in the Sultanate of Oman.