The board of the Capital Market Authority has approved amendments to the rules governing the registration of auditors of entities under its supervision, and one of the changes reaches directly into the boardroom: audit firms will have to hand the regulator's final inspection findings on a listed company's audit file to that company's audit committee. The decision was published on 29 September 2026 and the amended rules take effect from the date of their publication.
The regulator frames the package as an alignment with international practice and with the wider body of applicable law, and sets out two objectives. The first is raising the quality of the audit engagements performed for supervised entities. The second is improving the quality of the information that registered audit firms disclose about themselves.
The substantive obligations fall into four groups. Registered firms must employ a sufficient number of audit managers holding the Saudi professional fellowship, or an equivalent the regulator accepts, in proportion to the size, scale and complexity of the firm's business. They must operate an appropriate quality management system covering audits and reviews of financial statements, and comply with professional standards both when reviewing interim statements and when auditing annual ones. They must follow the regulator's inspection instructions, cooperate with inspections, provide the information, data and documents requested, and where the findings warrant it prepare a corrective action plan, submit it for approval and implement it. The transparency report each firm publishes must now also carry disclosures on the firm's profile, governance and leadership, a description of its quality management system, the identity of those who oversee that system, and the outcome of its annual evaluation.
For audit committee chairs at listed Saudi issuers, the inspection sharing requirement is the item to act on first. Until now the regulator's assessment of how well a firm had audited a particular company sat between the regulator and the firm. Routing it to the committee gives directors an independent read on the quality of their own audit rather than the auditor's account of it. Committees should settle now how that document will be received, who reads it, whether it enters the committee pack, and what the standing response is when the findings are unfavourable. A finding that arrives with no agreed process behind it tends to be filed rather than acted on.
For audit firms, and for the executives who buy their services, the staffing and transparency clauses change the economics of the market. A requirement to hold qualified audit managers in proportion to the size and complexity of the book bears most heavily on smaller registered firms taking on large or complex listed clients. The expanded transparency report turns quality management from an internal matter into a published and comparable disclosure. Chief financial officers running an audit tender should expect to compare firms on their quality management disclosures and their annual evaluation outcomes, and should treat a firm that cannot show those clearly as carrying a risk that will eventually land on the company's own reporting timetable.
