Author name: waseem

Actuarial firms serving insurance and Takaful companies in Oman need to review their licensing status under FSA Decision E/6/2026. The regulation introduces specific approval requirements, professional qualification standards, and operating restrictions for actuarial service providers. For existing firms, the priority is aligning operations with the new rules. For businesses planning to enter the Omani market, understanding the licensing conditions is essential before investing in staff, business registration, and client acquisition. The Financial Services Authority (FSA) announced the decision on 15 March 2026 and provided existing actuarial offices with a one-year grace period to regularize their status. The transition period gives firms time to address compliance gaps, but waiting until the deadline approaches creates unnecessary pressure. This guide explains Oman’s actuarial licensing requirements, the conditions introduced by FSA Decision E/6/2026, and the practical steps actuarial firms and insurance businesses must take. MFN Auditing helps businesses in Oman manage accounting, audit, and compliance matters through structured reviews and practical guidance. What Does FSA Decision E/6/2026 Mean for Actuarial Firms in Oman? FSA Decision E/6/2026 in Oman establishes a dedicated regulatory framework for actuarial services offices. It sets conditions for firms providing specialized actuarial work to insurance and Takaful companies, covering professional qualifications, approval, service delivery, and regulatory oversight. For actuarial firms, the decision affects how they establish their business, demonstrate professional competence, manage client engagements, and maintain regulatory compliance. A general commercial registration does not automatically satisfy the specific authorization requirements applicable to regulated actuarial services. Insurance companies also need to review their existing arrangements. Appointing an external actuary involves more than agreeing on fees and delivery dates; the provider must meet the relevant regulatory conditions. Why Has Oman Introduced Specific Licensing Rules? Insurance companies rely on actuarial calculations to assess future claims, determine technical provisions, evaluate pricing assumptions, and understand their financial exposure. Errors or weak professional controls in this work affect financial reporting and risk management. The new regulation gives the FSA a more defined framework for assessing actuarial service providers. It also establishes professional qualification requirements and operating restrictions intended to strengthen accountability across the sector. For business owners, the practical issue is straightforward: licensing, professional credentials, and service arrangements need to meet the applicable regulatory conditions. Firms that address these areas early have more time to correct deficiencies and organize their operations before the transition period ends. Who Needs to Meet the Actuarial Licensing Requirements in Oman? The regulation is particularly relevant to firms that provide actuarial services to insurance and Takaful operators, as well as businesses planning to enter the market. Existing Actuarial Firms Existing providers need to review their current status against the new rules. Their previous operating arrangements do not automatically meet every condition introduced by the regulation. The one-year grace period announced in March 2026 provides time to review ownership qualifications, professional credentials, client portfolios, and operational procedures. Firms need to identify gaps, confirm applicable requirements with the FSA, and complete the necessary steps by the relevant deadline. New Actuarial Service Providers Businesses planning to establish actuarial firms in Oman need to assess the licensing conditions before launching regulated services. This includes confirming the proposed ownership structure, the availability of qualified actuaries, and the required application documentation. Early assessment also helps founders evaluate whether their planned business model is commercially viable under the applicable restrictions. Recruiting qualified personnel and securing client commitments before checking the licensing conditions creates avoidable financial and operational risks. Insurance and Takaful Companies Insurers that outsource actuarial work need to check the regulatory standing of their appointed providers. This review is particularly relevant for actuarial valuations, technical provisions, pricing assessments, and other work that supports financial reporting or regulatory submissions. Businesses also need to consider provider capacity, reporting schedules, and contractual arrangements. These checks help prevent licensing or capacity issues from disrupting important actuarial work. What Are the Main Actuarial Licensing Requirements in Oman? The regulation establishes specific conditions for firms seeking approval to provide actuarial services. Businesses need to assess the following areas against the full regulatory text and current FSA instructions. FSA Approval for Actuarial Services Actuarial firms must obtain the required regulatory approval before providing services covered by the framework. A company registration certificate or general consultancy license does not replace this specific authorization. Applicants need to confirm the correct application route, prepare the required corporate information, and provide evidence that they meet the relevant professional and operational conditions. Existing firms need to determine whether their current authorization meets the new rules or requires further action. Professional Qualifications for Owners and Actuaries The FSA’s announcement identifies Fellowship-level qualifications in actuarial science as a key condition. Founders or owners, along with at least one actuary, must hold the relevant Fellowship qualification from an institution specified under the regulation or a recognized international actuarial institute, subject to the applicable FSA requirements. Firms need to verify the following before submitting an application: Qualifications held by each founder or owner. Credentials of the actuary responsible for the firm’s professional work. Recognition and acceptability of the awarding institution or actuarial institute. Supporting certificates and other evidence required by the FSA. Corporate Structure and Governance The proposed business structure must support professional accountability and regulatory compliance. Firms should review ownership records, responsibility allocations, documentation procedures, and internal controls before seeking approval. These checks also help identify weaknesses in existing operations. For example, a firm that relies on informal recordkeeping or has no defined process for reviewing actuarial reports needs to address those gaps as part of its wider compliance preparations. License Validity and Renewal According to Al Tamimi & Company’s legal analysis of the regulation, an actuarial firm’s license remains valid for three years and may be renewed for a similar period. Renewal applications must be submitted at least 30 days before expiry. What Services Can Licensed Actuarial Firms Provide in Oman? Actuarial firms support insurers with financial calculations and risk assessments that require specialist expertise. Their work informs decisions about insurance liabilities, product pricing, future claims, and financial exposure. The principal

An intercompany transaction that looks commercially reasonable to a business owner can still create a tax problem if its pricing reduces taxable income in Oman without reflecting the terms independent businesses would agree to. Management fees, shareholder loans, shared operating costs, intellectual property charges and cross-border goods sales all deserve careful review when related parties are involved. For businesses operating across Oman and other jurisdictions, a transfer pricing risk assessment identifies transactions that expose the company to potential tax adjustments, weak documentation and disputes with tax authorities. It also gives management a practical basis for reviewing intercompany agreements, pricing methods and financial records before filing a tax return or responding to a tax enquiry. Oman’s Income Tax Law addresses transactions between related persons through Articles 125–128. Article 126 allows the tax authority to determine taxable income using the conditions that independent persons would have agreed to when the actual related-party terms produce lower taxable income or a greater deductible loss. What Is a Transfer Pricing Risk Assessment and Why Does It Matter in Oman? A transfer pricing risk assessment is a structured review of transactions between related parties to determine whether their pricing, contractual terms and supporting records create tax exposure. It examines how a business sets intercompany prices, whether those prices reflect the underlying commercial arrangements and how the transactions affect taxable income. The assessment is not limited to checking whether invoices contain the correct amounts. It also considers the economic substance of transactions, the functions performed by each entity, the assets used, the risks assumed and the evidence supporting the arrangement. How Does Oman Treat Transactions Between Related Parties? Articles 125 and 126 of Oman’s Income Tax Law establish the legal basis for examining related-party transactions. Article 125 addresses direct and indirect transactions between related persons, including relationships arising through control and specified family relationships. Article 126 provides for taxable income to be determined using conditions that independent persons would have agreed to when the actual terms reduce taxable income or increase deductible losses. Consider an Omani company that receives management services from its overseas parent company. The parent charges OMR 80,000 annually, but the Omani company holds no detailed records of the work performed, the allocation of costs or the commercial basis for the fee. Which Businesses Need a Transfer Pricing Risk Review? A review is particularly relevant for businesses with related-party transactions, including: Omani subsidiaries of international groups that purchase goods, services or intellectual property from overseas affiliates. Family-owned groups that share employees, assets, financing or administrative costs across several companies. Businesses receiving management, technical, IT, marketing or accounting services from related entities. Companies providing loans, guarantees or other financing arrangements to group members. Manufacturers, distributors and trading companies that buy or sell goods between related entities. Businesses operating through a foreign parent, Omani subsidiary or branch structure. Domestic transactions also deserve attention. A transaction does not become commercially defensible simply because both parties operate in Oman. The tax treatment and relationship between the parties remain relevant to the review. Smaller businesses benefit from an assessment when related-party charges are material to their reported profits or when their records do not clearly explain how prices were determined. Which Transfer Pricing Risks Should Businesses in Oman Assess? The most useful assessment begins with the transactions that have the greatest potential effect on taxable income. Reviewing every invoice in equal detail wastes time when a small number of high-value arrangements account for most of the exposure. 1. Management Fees and Intra-Group Services Management fees frequently create documentation and deductibility concerns. Group headquarters often provide finance, HR, procurement, IT, legal or strategic support to operating subsidiaries. The key question is whether the charge relates to identifiable services that benefit the Omani entity. Review the service agreement, invoices, cost-allocation calculations, work records and evidence of the services delivered. Separate genuine services from shareholder activities, duplicated work and costs that relate exclusively to another group entity. For example, an Omani distributor pays its regional headquarters a monthly management fee calculated as a percentage of revenue. The agreement explains the percentage but does not identify the services provided or how the fee was calculated. A risk assessment investigates the allocation method, supporting costs and commercial rationale before determining whether further benchmarking or adjustment is necessary. 2. Intercompany Loans and Financing Arrangements Related-party financing requires a review of the interest rate and the wider terms of the loan. Principal amount, currency, duration, repayment schedule, security, borrower creditworthiness and the financial position of the parties all influence the commercial terms. An interest rate that appears reasonable in one market does not automatically suit a different borrower or currency. The assessment also considers whether the loan terms reflect the parties’ actual conduct and whether the borrower has the financial capacity to service the debt. 3. Goods, Inventory and Distribution Margins Related-party sales and purchases affect gross margins, inventory costs and taxable profits. A manufacturer selling products to an Omani distributor, for example, needs a pricing arrangement that reflects the parties’ respective commercial roles. The assessment examines product specifications, sales volumes, market conditions, shipping arrangements, warranties, inventory risks and the functions performed by each entity. Comparing the distributor’s margin with unrelated businesses also helps identify unusual results, provided the comparison accounts for relevant differences. 4. Intellectual Property and Shared Costs Royalty payments, software licences, trademarks, technical know-how and shared service arrangements require particular attention when the charge is significant or difficult to benchmark. For intellectual property, the review considers the rights granted, the business using them and the commercial value associated with the arrangement. For shared costs, it checks whether the allocation method reflects the benefit or resources received by each participating entity. How Can a Business Conduct a Transfer Pricing Risk Assessment in Oman? An effective assessment follows a defined process. It begins with identifying related-party dealings and ends with a prioritised action plan supported by financial and commercial evidence. Step 1: Map All Related-Party Transactions Prepare a complete register of transactions involving related

تُعد السجلات المالية الدقيقة أساسًا مهمًا لنجاح الشركات العاملة في سلطنة عُمان. تحتاج الشركات إلى قوائم مالية موثوقة، وسجلات محاسبية منظمة، وأنظمة رقابة داخلية فعّالة لإدارة مواردها المالية والوفاء بالمتطلبات التنظيمية المعمول بها. وقد تؤدي الأخطاء في التقارير المالية، ونقص المستندات، وضعف الإجراءات المالية إلى مشكلات تتعلق بالامتثال وتؤثر في القرارات التجارية المهمة. تساعد خدمات التدقيق في سلطنة عُمان الشركات على فحص القوائم المالية، وتقييم الممارسات المحاسبية، واكتشاف نقاط الضعف في الرقابة الداخلية، والوفاء بمتطلبات التدقيق المطبقة على أنشطتها. كما يساعد التدقيق المهني أصحاب الأعمال على فهم الوضع المالي لشركاتهم، وتعزيز المساءلة، واتخاذ قرارات مدروسة تستند إلى معلومات مالية موثوقة. في عام 2026، تحتاج الشركات إلى فهم واضح لأنواع التدقيق، والمتطلبات القانونية، ومسؤوليات إعداد التقارير المالية، والمستندات التي يطلبها المدققون. وتدعم MFN Auditing الشركات في سلطنة عُمان من خلال خدمات التدقيق والمراجعة المالية التي تتناسب مع احتياجاتها ومتطلباتها. ما خدمات التدقيق في سلطنة عُمان؟ تشمل خدمات التدقيق فحص القوائم المالية والسجلات المحاسبية والمعاملات والإجراءات التشغيلية ذات الصلة. ويهدف التدقيق إلى تقييم المعلومات المالية وفقًا للمعايير المحاسبية المعمول بها، والتحقق من الأدلة التي تدعم الأرقام الواردة في القوائم المالية. تشمل خدمات التدقيق الشائعة ما يلي: التدقيق المالي الخارجي: فحص مستقل للقوائم المالية والسجلات المحاسبية الداعمة لها. التدقيق الداخلي: تقييم أنظمة الرقابة الداخلية وإدارة المخاطر والإجراءات التشغيلية. المراجعة الضريبية: فحص الحسابات الضريبية والإقرارات والمستندات المالية الداعمة. تدقيق الامتثال: مراجعة مدى الالتزام بالمتطلبات القانونية والتنظيمية والتعاقدية المعمول بها. التدقيق لأغراض خاصة: فحوصات مالية تُجرى لمعاملات محددة أو احتياجات إدارية أو أهداف أخرى متفق عليها. تعالج كل خدمة احتياجات مختلفة. لذلك، تحتاج الشركات إلى تحديد نطاق التدقيق المناسب وفقًا لالتزاماتها القانونية ومتطلبات إعداد التقارير المالية والمخاطر التشغيلية. ما الأنواع الرئيسية لخدمات التدقيق في سلطنة عُمان؟ يساعد فهم أنواع التدقيق المختلفة الشركات على اختيار الخدمة المناسبة وتطبيق ضوابط مالية فعّالة. 1. التدقيق المالي الخارجي يتضمن التدقيق المالي الخارجي فحص القوائم المالية للشركة والسجلات التي تدعمها بواسطة مدقق مستقل. ويجمع المدقق الأدلة اللازمة لإبداء رأيه بشأن إعداد القوائم المالية، من جميع النواحي الجوهرية، وفقًا للإطار المحاسبي المعمول به. قد يشمل التدقيق الإيرادات والمصروفات والأصول والالتزامات والأرصدة المصرفية والسياسات المحاسبية والمعاملات المهمة. يسهم التدقيق الخارجي في تعزيز المساءلة المالية وتوفير معلومات مالية خضعت لفحص مستقل لأصحاب المصلحة المعنيين. كما يساعد الشركات على اكتشاف التناقضات في التقارير المالية ومعالجة المسائل التي تتطلب اهتمام الإدارة. 2. خدمات التدقيق الداخلي يركز التدقيق الداخلي على تقييم مدى فعالية إدارة الشركة للضوابط المالية والإجراءات التشغيلية والمخاطر. وقد يتجاوز نطاقه القوائم المالية ليشمل الإجراءات المتبعة في مختلف الإدارات. يمكن أن يشمل التدقيق الداخلي مراجعة ما يلي: الموافقات على المدفوعات وإجراءات الشراء. التسويات المصرفية وإدارة النقد. سجلات المخزون وحماية الأصول. صلاحيات الوصول إلى الأنظمة المحاسبية والمعلومات المالية. إجراءات منع الاحتيال وضوابط إدارة المخاطر. الالتزام بالسياسات الداخلية والصلاحيات الإدارية المعتمدة. تساعد المراجعات الداخلية المنتظمة الإدارة على اكتشاف نقاط الضعف وتحسين الإجراءات وتعزيز المساءلة قبل أن تؤثر المشكلات في العمليات التجارية على نطاق أوسع. 3. التدقيق الضريبي ومراجعة الامتثال تفحص المراجعات الضريبية السجلات والمستندات المتعلقة بالالتزامات الضريبية للشركة. وتساعد على اكتشاف الاختلافات بين السجلات المحاسبية والحسابات الضريبية والإقرارات المقدمة. بحسب طبيعة نشاط الشركة، قد تشمل المراجعة ضريبة دخل الشركات ومعاملات ضريبة القيمة المضافة وفواتير المبيعات والمصروفات والمستندات الداعمة. تحتاج الشركات في سلطنة عُمان إلى الاحتفاظ بسجلات محاسبية متسقة تدعم إقراراتها الضريبية. ويساعد فحص هذه السجلات على اكتشاف المستندات الناقصة والتصنيفات غير الصحيحة والأخطاء الحسابية التي تتطلب التصحيح. ولا تُعفي المراجعة الضريبية الشركة من مسؤوليتها عن تقديم إقرارات دقيقة والالتزام بالمواعيد المحددة. بل تدعم هذه المسؤولية من خلال فحص السجلات والإجراءات التي تستند إليها التقارير الضريبية. 4. التدقيق التشغيلي وتدقيق الامتثال يقيّم التدقيق التشغيلي كفاءة العمليات التجارية والضوابط المرتبطة بها، بينما يركز تدقيق الامتثال على مدى الالتزام بالمتطلبات القانونية والتنظيمية والتعاقدية ذات الصلة. قد تشمل هذه المراجعات المشتريات والرواتب وإدارة المخزون والعقود والموافقات المالية وحفظ السجلات. بالنسبة إلى الشركات التي تدير عدة إدارات أو مواقع، تساعد هذه المراجعات على اكتشاف الإجراءات غير الفعّالة، وعدم وضوح المسؤوليات، والثغرات في الرقابة الداخلية. ويمكن للإدارة بعد ذلك تحديد الإجراءات التصحيحية ذات الأولوية وتحسين الاتساق في العمليات. ما المتطلبات القانونية للتدقيق في سلطنة عُمان لعام 2026؟ تعتمد متطلبات التدقيق في سلطنة عُمان على الشكل القانوني للشركة والتشريعات المعمول بها ووضعها التنظيمي والتزاماتها المتعلقة بالتقارير المالية. لذلك، يجب على الشركات التحقق من القواعد التي تنطبق على كياناتها بدلًا من افتراض أن المتطلبات نفسها تشمل جميع الشركات. يشكل قانون الشركات التجارية الصادر بموجب المرسوم السلطاني رقم 18/2019 جزءًا مهمًا من الإطار القانوني المنظم للشركات في سلطنة عُمان. وقد تنشأ متطلبات أخرى بموجب التشريعات الضريبية واللوائح الخاصة بقطاعات معينة وقواعد المناطق الحرة وشروط التراخيص والأحكام المنظمة لأنشطة الشركة. ينبغي للشركات مراجعة الجوانب التالية: القوائم المالية والسجلات المحاسبية تحتاج الشركات إلى الاحتفاظ بسجلات محاسبية مناسبة ومستندات داعمة لمعاملاتها. وتدعم هذه السجلات إعداد القوائم المالية والتقارير الضريبية والوفاء بالالتزامات المعمول بها. تشمل السجلات ذات الصلة عادةً المبيعات والمشتريات والمصروفات والأصول والالتزامات والمعاملات المصرفية وغيرها من الأنشطة المالية. كما يساعد الاحتفاظ المنتظم بالسجلات المدققين على التحقق من الأرصدة وتتبع المعاملات والتحقيق في الاختلافات أثناء عملية التدقيق. تعيين مدقق حسابات خارجي يعتمد وجوب تعيين مدقق حسابات خارجي على الشكل القانوني للشركة والتشريعات التي تنطبق عليها. ويجب على الشركات تحديد ما إذا كان التدقيق إلزاميًا، والالتزام بالقواعد ذات الصلة بتعيين المدقق وإعداد التقارير وتقديمها. وقد تنطبق التزامات إضافية على الشركات العاملة في القطاعات الخاضعة للرقابة أو التي تعمل بموجب ترتيبات ترخيص محددة. وينبغي التحقق من المتطلبات لدى الجهة المختصة أو أحد المهنيين المؤهلين. السجلات الضريبية والتقارير تحتاج الشركات إلى الاحتفاظ بالسجلات المالية والضريبية التي تدعم إقراراتها وحساباتها. ويجب أن تكون الإيرادات والمصروفات والمعاملات الخاضعة للضريبة والأرقام الأخرى ذات الصلة مدعومة بالمستندات المناسبة. يمكن للتدقيق أو المراجعة الضريبية اكتشاف الاختلافات ونقص المستندات، مما يساعد الشركات على معالجة المشكلات قبل أن تتحول إلى تحديات أكبر في إعداد التقارير. المتطلبات الخاصة بقطاعات معينة تخضع بعض القطاعات لمتطلبات إضافية تتعلق بالرقابة التنظيمية والتقارير المالية. وتحدد الجهة الرقابية والتشريعات المنظمة لها التزامات التدقيق ذات الصلة. تساعد MFN Auditing الشركات على تقييم متطلبات التدقيق الخاصة بها وتنظيم المعلومات المالية اللازمة لتنفيذ أعمال المراجعة المطلوبة. ملاحظة مهمة: تختلف المتطلبات القانونية باختلاف نوع الشركة وظروفها. لذلك، ينبغي التحقق من القواعد السارية على الكيان قبل اتخاذ قرارات بشأن التدقيق القانوني أو إعداد التقارير المالية. كيف تساعد خدمات التدقيق الشركات على تحقيق الامتثال المالي؟ يتطلب الامتثال المالي سجلات دقيقة وإجراءات متسقة ومتابعة منتظمة. وتساعد خدمات التدقيق المهني الشركات

Year-end financial reporting problems rarely appear at the last minute. They usually build up throughout the year through unreconciled accounts, unsupported transactions, outdated balances, incorrect cut-off, and incomplete documentation. By the time the accounts reach the audit stage, these issues can delay the process and require extensive explanations from the finance team. For businesses in Oman, accurate financial reporting is a core requirement. The Commercial Companies Law requires companies to maintain financial records, prepare financial statements according to applicable International Financial Reporting Standards, and have them audited according to International Auditing Standards. Financial statements must reflect the company’s actual financial position and profit or loss. That makes year-end preparation an important part of financial management. Identifying Audit Red Flags in Oman before closing the 2026 accounts allows businesses to correct errors, complete missing documentation, reconcile balances, and enter the audit process with properly supported financial records. What Are Audit Red Flags in Financial Reporting? Audit red flags are conditions within financial records that require further investigation or correction. They can indicate an accounting error, incomplete documentation, unusual transactions, weak financial controls, or a balance that does not accurately represent the company’s position. Some red flags are easy to identify, such as a bank balance that does not reconcile. Others require a deeper review, such as revenue recorded in the wrong accounting period or receivables that have remained unpaid for years. The most common areas include: Bank and cash reconciliations Accounts receivable Revenue recognition Expense documentation Accruals and provisions Fixed assets and inventory Tax and accounting reconciliations These areas deserve particular attention before the Oman financial statement audit because they directly affect the accuracy and supporting evidence behind the financial statements. 1. Bank Accounts Do Not Reconcile With the General Ledger Bank reconciliation problems are one of the clearest signs that financial records need attention. Differences between the bank statement and accounting system can result from unrecorded bank charges, outstanding cheques, deposits in transit, duplicate entries, incorrect postings, or transactions recorded in the wrong period. A difference that remains unexplained at year-end creates an immediate question: does the cash balance in the financial statements accurately represent the company’s actual cash position? Businesses should reconcile every bank account before closing the financial year and investigate old outstanding items rather than carrying them forward automatically. What to Review Before Year-End The finance team should check: Bank statements against the general ledger Outstanding cheques and payments Deposits in transit Bank charges and interest Unusual cash movements Inter-account transfers Long-outstanding reconciliation items Old reconciling items deserve particular attention. If an item has remained unresolved for several months, the team should determine whether it represents a genuine outstanding transaction, an accounting error, or an entry that needs to be reversed. A complete bank reconciliation gives the auditor a clear basis for testing cash balances and related transactions. 2. Receivables Are Growing Without a Clear Recovery Assessment A growing accounts receivable balance can indicate strong sales, but it can also hide collection problems. When customer balances remain outstanding for long periods without documented collection activity or a proper assessment of recoverability, the reported receivables balance may not represent the amount the business expects to recover. Businesses should review receivables by ageing before year-end and identify customers with significant or overdue balances. Particular attention should go to: Long-overdue customer invoices Disputed balances Customers with repeated payment delays Related-party receivables Balances with no recent collection activity Amounts requiring an impairment assessment 3. Revenue Is Recorded in the Wrong Accounting Period Revenue cut-off is another major area of concern during year-end reporting. An invoice issued in December does not automatically mean the entire transaction belongs in the 2026 financial statements. The accounting treatment needs to reflect the underlying transaction and the applicable revenue recognition requirements. This becomes particularly important for businesses with: Long-term service contracts Project-based revenue Advance customer payments Deliveries close to year-end Milestone-based contracts Credit notes issued after year-end Finance teams should review transactions immediately before and after the reporting date and compare the accounting entries with contracts, delivery records, service completion evidence, and invoices. Incorrect cut-off can overstate or understate both revenue and profit, making it an important area for review during the year-end audit Oman 2026 process. 4. Expenses Lack Adequate Supporting Documentation An expense recorded in the accounting system needs supporting evidence. Missing invoices, unclear payment descriptions, incomplete receipts, or unsupported journal entries can make it difficult to establish the nature and business purpose of a transaction. Common warning signs include: Supplier invoices that cannot be located Expenses supported only by payment records Large manual journal entries Unapproved expenses Payments with unclear descriptions Expenses recorded under incorrect accounts Transactions without contracts or other relevant evidence This issue also matters from a tax perspective. Oman’s Tax Authority states that tax validation can include reviewing declared revenues and expenses, commercial and financial transactions, and supporting records and documents. 5. Accruals, Prepayments and Provisions Are Outdated Accruals, prepayments, and provisions can become inaccurate when they are carried forward without regular review. An accrual created for a previous period may no longer be required. A prepaid expense may already have been consumed. A provision may be based on an estimate that no longer reflects current circumstances. Common Problems Include Old accruals that have never been reversed Missing accruals for services already received Prepayments that should have been expensed Provisions based on outdated estimates Balances with no supporting calculation Significant unexplained movements Before closing 2026, each material accrual, provision, and prepayment should have a clear calculation and supporting basis. The finance team should compare opening balances with current-year movements, reversals, utilisation, and closing balances. Any amount that no longer represents a valid obligation or future economic benefit should be reviewed and adjusted. 6. Fixed Assets and Inventory Records Do Not Match Actual Balances Financial reporting becomes unreliable when the assets recorded in the accounting system do not match what the business actually owns or holds. Fixed asset records can contain assets that have already been sold, disposed of, damaged,

  Audit quality in Oman is under closer regulatory scrutiny in 2026. The Financial Services Authority (FSA) has intensified its supervision of accounting and auditing firms following the transfer of regulatory responsibility for the profession under Royal Decree No. 20/2024. Recent inspections and enforcement decisions show that compliance with International Standards on Auditing (ISA) is not treated as a formality. The FSA is examining how audit engagements are planned, performed, documented, evidenced, and reported. For companies seeking external audit in Oman, this regulatory focus matters because the quality of the audit depends on more than the final opinion signed by the auditor. Engagement documentation, audit evidence, materiality assessments, related-party procedures, engagement terms, working papers, and report presentation all form part of the audit quality framework. In April 2026, the FSA reported more than 45 regulatory and professional-development actions, including nine field visits. Its inspections identified violations involving licensing, audit documentation, evidence, related parties, materiality, engagement letters, and audit reporting. Four firms were deregistered, three received warnings, and two were suspended from practice. What Are the Oman External Audit Requirements? External audit requirements in Oman come from several regulations and professional standards. Companies meet the requirements applicable to their legal structure, industry, financial reporting framework, and regulatory status, while auditors need to perform engagements in accordance with applicable laws and approved professional standards. The FSA now plays a central role in regulating the accounting and auditing profession in Oman. The Authority’s 2026 supervisory activity has placed particular emphasis on compliance with International Standards on Auditing and the Law Regulating the Accounting and Auditing Profession. The practical requirements include: Using a properly licensed audit firm. Establishing clear engagement terms. Planning the audit based on assessed risks. Determining and documenting materiality. Obtaining sufficient and appropriate audit evidence. Performing required procedures for significant balances and transactions. Addressing related-party relationships and transactions. Maintaining complete audit documentation and working papers. Applying appropriate quality and independence controls. Preparing audit reports that comply with applicable requirements. Retaining audit files for the required period. Why the FSA’s 2026 Findings Matter The FSA’s April 2026 regulatory update provides one of the clearest summaries of the Authority’s current audit-quality concerns. Following desk-based reviews and field examinations, the FSA identified violations involving unlicensed practice, unauthorised signing of audit reports, failure to retain audit files for ten years, and non-compliance with several ISAs. The findings included deficiencies under: ISA 210: Terms of audit engagements ISA 230: Audit documentation ISA 500: Audit evidence ISA 550: Related parties ISA 700: Forming an opinion and reporting on financial statements ISA 320: Materiality in planning and performing an audit The Authority has continued enforcement action throughout 2026. In October 2026, the FSA warned an audit firm after identifying deficiencies in audit evidence and documentation of the nature and extent of procedures performed. The firm was given three months to implement regulatory directives aimed at improving professional competence and work quality. ISA 210: Engagement Terms Must Be Properly Established One of the FSA’s identified deficiencies was the absence of engagement letters between audit firms and clients. This relates directly to ISA 210, which establishes requirements concerning the terms of an audit engagement. An engagement letter establishes the basis of the professional relationship. It defines the audit’s objective and scope, management’s responsibilities, the auditor’s responsibilities, and the applicable financial reporting framework. The FSA specifically identified missing engagement letters as a weakness that undermines contractual clarity and the definition of responsibilities required under ISA 210. ISA 230: Audit Documentation Must Support the Work Performed Audit documentation was another major concern in the FSA’s findings. ISA 230 requires auditors to prepare documentation that provides a sufficient record of the basis for the auditor’s report and evidence that the audit was planned and performed in accordance with applicable requirements. The FSA found deficiencies in audit documentation where working papers were insufficient to trace the audit procedures performed and assess the quality and compliance of the engagement. Working papers need to show what was tested, what evidence was obtained, what conclusions were reached, and how significant issues were addressed. A conclusion without supporting documentation creates a weakness even when the underlying audit procedure was performed. ISA 500: Audit Evidence Must Be Sufficient and Appropriate An audit opinion depends on evidence. The FSA has specifically identified failures to obtain sufficient and appropriate audit evidence as a recurring quality issue. ISA 500 establishes the auditor’s responsibilities concerning audit evidence. The evidence obtained needs to support the conclusions reached during the engagement and ultimately provide a basis for the audit opinion. The FSA’s April 2026 findings identified cases where evidence supporting audit procedures on financial statements was insufficient or inappropriate. This issue was also reflected in later enforcement action. In August 2026, the FSA suspended an audit firm after identifying deficiencies involving audit documentation, materiality, inventory verification, related-party procedures, and the sufficiency and appropriateness of evidence supporting the professional opinion. ISA 320: Materiality Must Be Determined and Documented Materiality influences audit planning, risk assessment, testing, evaluation of misstatements, and the final audit opinion. The FSA identified non-compliance with ISA 320, particularly failures to document materiality thresholds for significant misstatements and audit execution. An effective audit file needs to demonstrate the basis for materiality decisions and how those decisions influenced audit procedures. If materiality is not properly established and documented, the auditor’s approach to risk and testing becomes difficult to evaluate. ISA 550: Related-Party Transactions Require Specific Attention Related-party transactions create particular audit risks because they can involve transactions that are not conducted under normal market conditions or that are not adequately disclosed. The FSA identified non-compliance with ISA 550, including failures to perform required audit procedures relating to related parties. Auditors need to identify related-party relationships and transactions, understand their nature, assess the associated risks, and perform appropriate procedures. Companies also have an important role in this process. Management needs to maintain accurate information about shareholders, directors, key management personnel, subsidiaries, associated entities, and other relevant relationships. ISA 700: Audit Reports Must Meet the Required

  Think about the last time your auditor asked for a document you were sure you had already sent. Now picture that request repeated 200 times at year-end, while the Tax Authority prepares to receive every VAT invoice in a structured electronic format. That is the pressure Omani finance teams are heading into. A digital audit in Oman answers it directly: software tests every transaction, findings reach you during the year, and your records are in order well before April 2027. This guide covers what is driving the change, what a digital audit includes, what waiting will cost you, and how to choose a provider that delivers. Talk to MFN Auditing about digital audit services Oman businesses can start using this quarter. How Digital Audits Work for Oman Businesses  A digital audit uses software to test your accounting data instead of sampling a few files by hand. The auditor connects to your ledger, bank feeds, and invoice records, then runs checks across every transaction. Duplicate payments, invoices posted to the wrong period, and suspicious round-sum entries show up in minutes. The old method meant picking 40 invoices out of 4,000 and hoping the sample told the whole story. The digital method looks at all 4,000. That is a different level of assurance, and it saves your team time because the auditor stops asking for box after box of supporting documents. It also changes the relationship. Instead of one big visit after year-end, you get findings while the books are still open. A missing approval spotted in March is a small correction. The same gap found in January is a qualified opinion and an uncomfortable call with your bank. Oman Rules Driving Digital Audit in 2026 Three developments explain why this topic moved from “interesting” to “urgent” this year. Fawtara E-Invoicing and the April 2027 Deadline Tax Authority Decision No. 189/2026 made electronic invoicing mandatory for VAT-registered businesses. Rollout starts on 1 April 2027 in two phases, based on the size of your supplies. Invoices will be issued in a structured format, validated through a service provider accredited by the Tax Authority, and reported to the Authority under the national Fawtara program. Paper invoices, PDFs, and images sent by email will no longer qualify. A pilot with 100 selected companies began at the end of August 2026. Every business outside the pilot now has a preparation window, and those that use it well will have clean data when the mandate lands. VAT Returns and Corporate Tax Under Closer Data Review VAT has run at 5% since 2021, and corporate income tax returns come with audited financial statements within four months of year-end. Once invoice data reaches the Authority in a structured format, any gap between what you file and what your customers and suppliers report is easy to spot. Errors that once sat unnoticed for years will surface in the next return cycle. Personal Data Protection and Auditor Accreditation Oman’s Ministry of Transport, Communications and Information Technology has set accreditation standards for external auditors who check compliance with the Personal Data Protection Law. If you hold customer records, payroll files, or patient and student data, you now face a second question beyond whether your numbers are right: is your data handling lawful? A provider already working in digital systems is better placed to cover both. How Technology Changes the Audit Process Digital tools touch every phase of the engagement, and the gains are practical. Planning. Analytics on last year’s data show where risk sits, so the auditor spends time on transactions that carry real exposure instead of reading everything evenly. Testing. Software checks every entry against rules you can read: duplicate invoices, payments above approval limits, weekend postings, vendors with no registration details. Evidence. Bank confirmations, invoices, and contracts sit in a shared workspace with timestamps, so nobody hunts through email for the file sent last Tuesday. Queries. Questions from the auditor are logged against specific items, with owners and due dates. Your finance team answers once, in one place. Reporting. Findings link directly to the underlying transactions, so conversations with management are faster, and follow-up is easy to verify. Digital Audit Services for Oman SMEs You do not need a full systems rebuild to begin. Most SMEs get results from one or two focused services, then add more as their data improves. Full-Population Transaction Testing The auditor runs every entry in your ledger through a set of tests and flags exceptions for review. The first run often turns up old errors worth correcting: unrecorded credit notes, duplicate supplier bills, expenses booked to the wrong year. It is the fastest way to see what your numbers really look like. E-Invoicing Readiness Review This checks whether your invoicing process, customer data, and accounting software can produce the structured format the Tax Authority will require. Missing tax registration numbers, inconsistent item descriptions, and manually edited invoices are the usual problems. Fixing them now costs a fraction of what a rushed fix will cost in March 2027. Continuous Monitoring Instead of waiting for year-end, key checks run monthly or quarterly on your data. You receive a short exceptions list and a call about anything unusual. For businesses with high invoice volumes, this is where the savings show up, because errors are corrected before they pile up. Access and Controls Review Who can create a vendor, approve a payment, or change an invoice? In many small businesses, the answer is “the same person”. Reviewing system access and approval workflows closes that gap and protects the owner as much as the company. Digital Audit vs. Traditional Audit The easiest way to see the difference is to compare what you experience on each side. With a traditional audit, your accountant spends a week pulling documents, answers queries by email over a month, and receives findings long after the year has closed. With a digital audit, you request documents once through a shared workspace, track queries, and receive issues while you still have time to act. Cost