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The formation of the Oversight Unit (OU) for quality control of auditors registered at FRA’s record was based on Law No. 123 of 2008 on amendments to some provisions of the Capital Market Law promulgated by Law No. 95 of 1992.  Article (11) of the said Law states: “A record shall be established at the Authority to register auditors who are licensed to audit listed companies, public subscription companies, securities companies, and investment funds established by banks and insurance companies. FRA’s Board of Directors shall develop the terms and conditions for listing and delisting of auditors from the above record.”

 It is worth mentioning that the Capital Market Authority’s Board issued decision No. (84) of 2008 to form the Oversight Unit (OU) for quality control of auditors registered at the Authority’s record , the decision was  amended by FRA’s BOD decision No. (24) of 2009 and then  amended by decision No. 50 of 2014.

In light of the Authority’s decision, the Unit’s BOD was formed. Thus, it shall take its decisions and FRA’s BOD shall approve it.

The Unit’s terms of reference in light of the issued decision

In order to achieve its objectives, the Unit shall have the following powers:

1. Suggest listing rules for auditors of listed companies, public subscription companies and entities licensed to engage in non-banking financial activities or any of the companies in which they own 25% or more of voting rights, either directly or indirectly. Besides, suggesting measures and procedures for suspending listing or delisting from the record and obtaining FRA’s BOD approval on these measures.

2. Draft a mechanism for periodic examination of the quality auditors’ work; develop executive procedures and measure to bring this about. It has the right to ask auditors to notify it of certain data and ensure their validity periodically or non-periodically. Companies, concerned entities and listed auditors shall inform the Unit of all the needed data, information or reports to facilitate its work.

3. Cooperate with professional associations to propose standards for auditing, code of professional conduct and independency. 

4. Maintain record with sufficient data about auditors and update the same on a periodical basis with the findings of the periodic examination and remarks of the quality of auditors’ work.

5. Propose memos of cooperation with regulators of the profession as well as other supervisory entities for exchange of information related to auditors. 

6. Suggest the measures that may be taken to face auditors that are not abiding by the applied rules and standards.

7. Suggest mechanisms for continuous professional development in accordance with international rules as a prerequisite for continuing listing at FRA’s record.

8. Organize workshops and training courses in cooperation with international and local professional organizations.

9. Suggest the fees set for being listed at the record.