Who Is Required to Conduct Audits in Oman?

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In Oman, statutory audits play a central role in ensuring transparency, accountability, and regulatory compliance across the business landscape. Several legal frameworks — including the Commercial Companies Law, Income Tax Law, and Bank regulations — define which entities must undergo an annual audit.

1. Under the Commercial Companies Law (Royal Decree 18/2019)

   • All Joint Stock Companies (both SAOG and SAOC) are required to appoint an external auditor and prepare audited financial statements each financial year. (Article 219 to 226)
   • For Limited Liability Companies (LLCs), an audit becomes mandatory when any of the following conditions apply (Article 278 to 280):
     • The company’s share capital exceeds OMR 50,000
     • The number of shareholders exceeds seven
     • The company’s constitutive documents require an audit
     • Shareholders representing at least 20% of the capital request an audit
2. Under the Income Tax Law (Royal Decree 28/2009) also requires companies exceeding certain capital or revenue thresholds to submit audited financial statements along with their annual tax return. This ensures compliance with tax obligations and supports accurate financial reporting.
3. Banks and financial institutions in Oman commonly require borrowers to have their books of account audited as a condition for obtaining or maintaining credit facilities. As part of standard lending covenants, borrowers must submit annually audited financial statements prepared in accordance with IFRS and audited by a firm licensed and registered in Oman. This requirement enables lenders to reliably assess the borrower’s financial position, evaluate risk, and ensure transparency throughout the financing period. In practice, even companies that may not otherwise fall under a statutory audit requirement are often obliged to undergo an audit once they seek bank financing, making audited accounts an essential component of credit compliance in Oman.

Overall, Oman’s regulatory framework emphasizes strong corporate governance and financial transparency. Whether you operate a SPC, a LLC, a joint-stock company, or a borrower from a financial institution, understanding your audit obligations is essential for staying compliant and building trust with stakeholders.