What is the penalty for not appointing auditor
Not appointing an auditor
Evaluation :-
The company will not be able to make a reliable evaluation for any purpose in the absence of audited financial statements.
Local content
The Local Content Authority is prohibited from accepting a customer for local content unless there are audited financial statements.
IKTVA
Aramco is prohibited from accepting a client for IKTVA unless there are audited financial statements.
New partners/investors
If there is a need for new investors or partners, the decision to invest them requires audited financial statements.
Bank or government financing or support:
It is an official requirement by all parties to provide any funding or support.
Contractor Classification
Audited financial statements are an official requirement and also require the auditor’s signature and stamp on the classification form.
Commercial and public issues
The absence of an auditor means lack of sound accounting procedures, poor control and preservation of assets, failure to carry out authentications and settlements in a correct manner, etc., and these lead to the risk of losing the company’s money due to the company’s inability to prove its rights due to weak or non-existent evidence and evidence.
Making decisions and monitoring the company’s assets
Weak control leads to the company losing its assets and embezzlement, and weak information and failure to prepare reports correctly lead to incorrect or late decision-making by the company’s management.
Obtaining international agencies
Audited financial statements are an official requirement for most international companies to obtain global agencies for many brands and products In addition to many government and private agencies that require audited financial statements
In addition
Planning to list the company one day in the financial market. The company will not be able to develop and be listed in the financial market one day, as it does not prepare audited financial statements in the first place.
The decision/approval of the partners not to appoint an auditor must also be made annually and provided to the Ministry of Commerce.
In the event that there are no financial statements at the beginning of the years or in the event that the company ceases its work in order to comply with the terms of the new companies’ system issued by the Ministry of Commerce, After that, a decision was made to prepare financial statements. The opening balances would be greatly affected and it would not be possible to verify their accuracy due to the lack of previous audited financial statements.
