The Law of Chartered Accountants

Royal Decree No. M/12 dated 13/05/1412 AH

WITH THE HELP OF ALMIGHTY ALLAH, WE, FAHD BIN ABDULAZIZ AL-SAUD, THE KING OF THE KINGDOM OF SAUDI ARABIA, After reviewing the Articles (19) and (20) of the Law of the Council of Ministers of Saudi Arabia issued upon the Royal Decree no. (38) dated 22/10/1377H (corresponding to 12/5/1958), And having reviewed the law of Chartered Accountants issued by the Royal Decree No. M/43 dated 13/07/1394 AH, and its amendments, And having reviewed the Council of Ministers Decree No. 40 dated 12/05/1412 AH, We have decreed the following: First: The approval of the law of Chartered Accountants according to the attached form. Second: His Excellency the Deputy of Prime Minister and the Ministers, according to their respective competences, shall execute this decree. Fahd bin Abdul Aziz

The Law of Chartered Accountants

1st Article: No person, natural or legal, is allowed to practice auditing unless his/her name is registered in the Register of Chartered Accountants at the Ministry of Commerce. Conditions of Registering 2nd Article: To be registered in the Register of Chartered Accountants, a person shall be: 1- Saudi Arabian. 2- With full eligibility. 3- With good conduct and behavior, was never convicted in one of the Islamic prescribed sanctions, or a crime involving moral turpitude or dishonesty unless he/she has been rehabilitated, and never had a decision of a disciplinary dismissal from government service issued against him unless three years have passed since the issuance of this disciplinary decision. 4- Holding a bachelor's degree (specialized in accounting) or any other certificate that the competent authority considers equivalent. 5- With practical experience in accounting work after getting the qualification, referred to in the paragraph "4" above, with one of the following entities: A- Offices of Chartered Accountants approved by the Saudi Authority of Chartered Accountants set forth in this law in accordance with the rules prescribed by the executive regulation, for a period of not less than three years, reduced to two years if the applicant has a master's degree in accounting or equivalent, and reduced to one year if he has a doctorate degree in accounting or equivalent. B- Governmental authorities or individual companies or institutions in accordance with the conditions and the periods prescribed by the executive regulation, with not less than the periods referred to in paragraph (A) above. 6- A key member of the Saudi Authority of Chartered Accountants. 7- Devoted to practice the profession full-time, however, the chartered accountant may combine the profession and the business that does not conflict with the manners and ethics of the profession in accordance with the rules prescribed by the executive regulation. Registering Procedures

3rd Article: A committee, formed by a decision of the Minister of Commerce, shall consider the applications for registration in the Register of Chartered Accountants headed by an employee of the Ministry of Commerce of a rank not below the fourteenth rank and the membership of: 1- A Saudi legal adviser appointed by the Minister of Commerce. 2- A Saudi chartered accountant, nominated by the board of directors of the Saudi Authority of Chartered Accountants , with a practicing period not less than five years. The Registering Committee of registering in the register of accountants shall decide on the application within the period prescribed by the executive regulation and that decision shall be justified and this decision is to be appealed against before the Board of Grievances. 4th Article: A natural person shall pay a fee of one thousand riyals at the time of applying for registration and at each renewal. 5th Article: The chartered accountant, whether an individual or a company, after his registration, gets a license to practice the profession signed by the Chairman of the Registering Committee explaining the registration number and date. The license is valid for five years and renewed for similar periods on a request provided ninety days at least before the expiry date. The Legal Obligations of the Chartered Accountant 6th Article: The licensed chartered accountant shall practice the profession actually and notify the competent authority at the Ministry of Commerce of the address of his office, and every change that could happen to this address, during the dates prescribed by the executive regulation and the consequence of lack of notification on the mentioned dates is the correctness of notification at the address registered in the ministry. The licensed chartered accountant shall notify the competent authority at the Ministry of Commerce when he opens any other branch.

7th Article: The auditing reports issued by the office shall be signed by the certified accountant himself if it is an individual or by the partner who actually participated in or supervised the auditing for accounting companies and he shall not depute someone else to sign instead. 8th Article: The chartered accountant shall take his personal name as the title of his office and he shall put the license granted to him in a prominent place of the office. 9th Article: The chartered accountant shall, whether an individual or a company, pair his name with the license number and date in all his publications, correspondences and all what he issues whether reports or data. He shall also provide the Saudi Authority of Chartered Accountants with the necessary data about his activity as determined by the executive regulation. 10th Article: The chartered accountant shall comply with the conduct and ethics of the profession as well as the standards of accounting and auditing and the technical standards issued by the Saudi Authority of Chartered Accountants. Also, the chartered accountant shall comply with duties specified under the rules and regulations. 11th Article: The chartered accountant is committed to attend a number of seminars determined by the Saudi Authority of Chartered Accountants. 12th Article: The chartered accountant shall, in all cases, retain the documents provided by the customers and the auditing documents and copies of the final accounts for a period of not less than ten years from the date of the issuance of his report for each audited fiscal year.

13th Article: The chartered accountant shall not audit the accounts of the companies or organizations in which he has an interest, directly or indirectly, so as determined by the executive regulation. 14th Article: The chartered accountant shall not audit the accounts of joint stock companies, public banks institutions unless he has practiced the profession for a period of not less than five years after receiving the license. 15th Article: The chartered accountant is asked for compensation for any damage that may occur to the customer or others due to errors made by him during the performance of his work and the responsibility shall be solidarity for the partners in accounting companies. 16th Article: The chartered accountant shall (whether an individual or a company) employ a certain percentage of Saudis of the total staff, and the executive regulation specifies this percentage, without prejudice to the provisions of the law of labor and workers. 17th Article: In case the chartered accountant stops practicing the profession for any reason, temporarily or permanently, he shall notify the competent authority at the Ministry of Commerce within thirty days following the date of his stopping and the license is considered expired in the case of permanent stopping, and without prejudice to the sanctions provided for in this law-the competent authority at the Ministry of Commerce has the authority to issue the decision to void the license of every accountant who stops practicing the profession and does not provide the notification provided for in this Article within the deadline after the verification of the incident deserving that and hearing the words of the accountant. And if the accountant produces the notification but he does not attend within the period of thirty days following the date of his notification, the license shall be voided without hearing his words and he may appeal the decision of voiding the license before the Board of Grievances. The voiding of the license shall not result in voiding the membership in the Authority.

18th Article: In case the chartered accountant stops practicing the profession permanently or for a period that could harm the customers or others, all his pending dealings, rights and obligations- resulting from that- shall be settled in accordance with the rules and procedures prescribed by the executive regulation. The Saudi Authority of Chartered Accountants 19th Article: An authority is created and called "The Saudi Authority of Chartered Accountants" which works under the supervision of the Ministry of Commerce to promote the profession of accounting and auditing and all that would help develop the profession and raising its level and it has the right, in particular, of: 1- Reviewing, developing and approving the standards of accounting and auditing. 2- Setting the rules necessary to the fellowship certification exam and include it with the professional, practical and scientific aspects of the auditing profession including the laws related to the profession. 3- Holding continual education courses. 4- Preparing researches and studies on accounting and auditing and any issue related. 5- Issuing periodicals, books and publications on the accounting and auditing issues. 6- Establishing an appropriate regulation for field monitoring to make sure that the chartered accountant applies the standards of accounting and auditing and adheres to these rules and regulations. 7- Participating in seminars and local and international committees related to the profession of accounting and auditing. 20th Article: The authority consists of: 1- Key members who are: A- All the Chartered Accountants licensed to practice the profession in the Kingdom at the time of applying this law provided that they attend the courses held for them by the authority and pass the tests within a period not exceeding three years from the date of the inception of the program prepared for that unless they get the certificate of fellowship set forth in paragraph (2) of the 19th Article of this law.

B- All those who possess the qualifications prescribed in paragraph (4) of the 2nd Article of this law provided that they get the fellowship certificate set forth in paragraph (2) of the 19th Article of this law. 2- Associated members who apply for the membership of those who have the qualifications referred to in paragraph (4) of the 2nd Article of this law. 21st Article: The Authority shall be located in the city of Riyadh and subordinate offices may be established inside the Kingdom. 22nd Article: The Authority shall have a general assembly consisting of all the key members who have paid their annual subscription fees. And the General Assembly of the Authority holds its ordinary and extraordinary meetings with the attendance of the majority of its members. If the required quorum is not available, a summon is produced to the date of a subsequent meeting held within thirty days following the previous date and the General Assembly meeting of the Authority on this date is true whatever the number of attendees is. The decisions of the General Assembly of the Authority are issued by the majority vote of the attendees, and in case of the equality of the votes, the Chairman's vote is considered a casting vote. And the ordinary meetings of the General Assembly of the Authority are held on a date that is determined at the beginning of each fiscal year of the Authority. The General Assembly of the Authority may hold an extraordinary meeting whenever requested by one fifth of its members or by the Board of Directors of the Authority. The Board of Directors of the Authority prepares the agenda of the General Assembly of the Authority. 23rd Article: The General Assembly of the Authority is authorized to: 1- Approve the internal regulation. 2- Approve the Authority's annual budget and final accounts for each year and appoint an observer to its accounts and determine his repayments.

3- Approve the annual work plan provided by the Board of Directors and approve its annual report on the activity of the Authority. 4- Elect the representatives of Chartered Accountants in the Board of Directors of the Authority. 5- Discuss everything set in its agenda of matters falling within the scope of the Authority's work or concerns. 24th Article: The Authority is administered by a board of directors consisting of thirteen members, and it consists of: 1- The Minister of Commerce or anyone whom he delegates, as a Chairman. 2- The Undersecretary of the Ministry of Commerce as a member. 3- The Undersecretary of the Ministry of Finance and National Economy for financial affairs and accounts or anyone appointed by the Minister of Finance and National Economy, with a rank that is not below the fourteenth rank as a member. 4- The Vice-Chairman of the General Monitoring Bureau or anyone appointed by the Chairman of the General Monitoring Bureau with a rank that is not below the fourteenth rank as a member. 5- Two Saudi members of the teaching staff in the Department of Accounting in one or more of the universities in the Kingdom appointed by the Minister of Commerce under the nomination of the Minister of Higher Education. 6- A representative of the Council of Chambers of Commerce and Industry appointed by the Minister of Commerce under the nomination of the Council of Chambers as a member. 7- Six members of Saudi Chartered Accountants who are practicing the profession, they are elected by the General Assembly for a period of three years, renewable once. And there is an exception that these members shall be appointed in the first Board of Directors by a decision of the Minister of Commerce for five years. The Secretary-General of the Authority attends the meetings of the Board of Directors without having a vote concerning issuing decisions. The Board of Directors shall meet at least once every ninety days upon the call of the Chairman or his deputy and the Chairman shall call for the meeting, whenever requested, in writing, by four members at least.

The meetings of the Board shall not be valid unless the majority of members are present and one of whom is the Chairman or his deputy. The decisions of the Council are issued by the majority of the votes of the attendees, and in case of the equality of the votes, the Chairman's vote is considered a casting vote. 25th Article: The Board of Directors shall conduct the affairs of the Authority and practice the powers necessary to achieve its objectives and it has, in particular, the right of: 1- Proposing any amendments to be included in the law of the Chartered Accountants and propose the regulations and decisions necessary to execution and other laws and regulations related to the accounting and auditing profession. 2- Reviewing, developing and approving the standards of accounting and auditing. 3- Issuing financial and administrative regulations and determine the fiscal year of the Authority. 4- Preparing the Authority's internal law. 5- Determining the assessed fees on the members and how to collect them. 6- Organizing the tests necessary to obtain the fellowship certificate provided that they include professional, practical and scientific aspects of the practice of the audit profession as well as the relevant regulations. 7- Drawing up programs and courses for continual education. 8- Forming technical committees such as the Committee of Accounting and Auditing Standards, the Committee of Quality Control of Professional Performance, the Committee of Tests and Nominations, the Committee of Continual Education and the Committee of Ethics of the Profession and others and setting the rules and procedures of practicing their tasks. 9- Appointing a secretary general to the Authority and his deputy and they shall be Saudis and meet the conditions prescribed for a license to practice the profession but they shall not be practicing the profession. The Board of Directors determines their duties, responsibilities, rights and how they are treated financially.

26th Article: The revenues of the Authority consist of: 1- Subscription fees determined by the Board of Directors. 2- Governmental subsidies. 3- Gifts, donations and bequests that the Board of Directors decides to accept. 4- Revenue of the investment of the funds of the Authority and the proceeds of publishing and selling the prepared researches, studies and publications and the provided services. 27th Article: The Authority shall have an auditor appointed by the General Assembly every year from among the licensed chartered accountants and he has the right to see the books and documents and to demonstrate the observations he sees and he shall audit the accounts of the Authority and submit a report thereon to the General Assembly. The auditor, or any of his partners, shall not be a member of the Board of Directors. The Assembly shall determine his remunerations and it may reappoint him or select another one. An exception of this is that the Board of Directors shall appoint the auditor for the first year and determines his remunerations. Sanctions 28th Article: One of the following sanctions would be applied on those who violate the provisions of this law: - Blame, warning, suspension from practicing the profession for a period not exceeding six months. - Delisting the violator from the Register of the Chartered Accountants and publishing the decision of the suspension and the delisting sanction at the expense of violator in one or more of the local newspapers. 29th Article: Taking into account what is required by regulations, a committee - formed by the Minister of Commerce and consisting of the Undersecretary of the Ministry of Commerce as a Chairman, a Saudi legal adviser and a member of the Board of Directors - shall investigate the violations of the provisions of this law. In case the committee has the opinion that the violation

constitutes a crime, it shall refer the violation to the competent authority and after the verdict is issued, the said committee shall consider the violation of the disciplinary side and it has right to apply one of the following sanctions: - Blame, warning, suspension from practicing the profession for a period not exceeding six months and the violator has the right to appeal against the decision of one of the previous sanctions to the Board of Grievances. But if the committee has the opinion that the violation does not constitute a crime, it may - after the completion of the investigation with the violator - apply one of the following sanctions: - Blame, warning, suspension from practicing the profession for a period not exceeding six months. And the committee has the right to reserve (dismiss) the violation if it considers that it does not deserve any of the set sanctions. In all cases, the decision of the committee shall be justified and the violator has the right to appeal against the decision of the sanction to the Board of Grievances. If the committee considers the application of the sanction of delisting, it shall refer it to the Board of Grievances for decision. 30th Article: Those who have been delisted in accordance with the provisions of this law and its regulations have the right to request to be re-registered after the expiry of five years from the date of issuing the delisting decision, and the Minister of Commerce is the one who decides that. And for re-registering, the conditions and procedures of registering shall be followed. 31st Article: The suspension or delisting period provided in this law shall not be counted of the requested period, referred to in the 14th Article of this law, for those who may audit the accounts of joint-stock companies or audit the accounts of banks and public institutions. 32nd Article: The Board of Grievances is authorized to apply the delisting sanction provided in this law. Also, it is authorized to examine all the claims brought by or against the chartered accountant for a reason that is related to his practice to the profession in accordance with the provisions of this law.

33rd Article: The competent authority at the Ministry of Commerce undertakes following the proceedings of bringing claims before the Board of Grievances concerning the violation of which the committee, provided for in the 28th Article, decides to apply delisting the accountant. General and Transitional Provisions 34th Article: The Minister of Commerce may compel the chartered accountant to inform the ministry with any information requested by the Ministry to make sure that the accountant's work performance is done according to this law. 35th Article: Cooperation shall be organized between the licensed accountants in accordance with this law and the non-Saudi chartered accountants as determined by the executive regulation. 36th Article: The licenses issued, before this law enters into force, for the chartered accountants, are valid provided that the licensed is practicing the profession with the commitment of foreign accounting offices, whether individuals or companies, with the following: A- Sharing one or more accountant of the Saudi chartered accountants who are licensed to practice the profession within two years from the date of validating this law and otherwise the license granted to the office is considered expired, and the executive regulation shall determine the rules and participation rate of Saudis in these offices and the ways to make sure of applying them. B- The accountant or the foreign partner shall stay in the Kingdom for at least nine months a year and actually practice the profession. 37th Article: This law eliminates the law of Chartered Accountants issued by the Royal Decree No. M/43 dated 13/7/1394 AH, and its amendments, and all that is inconsistent with its provisions.

38th Article: This law shall be published in the Official Gazette and shall come into force after ninety days from the date of publication and the Minister of Commerce will issue the regulations and decisions necessary for its execution.

Ministerial Decree No. 993, dated 09/09/1414 AH

The Minister of Commerce, According to the powers assigned to him, Having reviewed the law of the competence of the Ministry of Commerce issued by the decree of the Council of Ministers No. 66 dated 06/04/1374 AH, and the law of the Chartered Accountants issued by the Royal Decree No. M/12 dated 13/05/1412 AH, And based on the requirements of the public interest, The Minister decrees the following: Article (1): The executive regulation of the law of the Chartered Accountants will be issued according to the attached form. Article (2): This decree shall be published in the Official Gazette and the competent authorities shall execute it. The Minister of Commerce

The Executive Regulation of Chartered Accountants issued by Royal Decree No. (M /12) dated 13/05/1412 AH

1st Article: The Register of Chartered Accountants shall include at least the following data: 1- The name of the licensed chartered accountant, whether an individual or a company, and the license date, number, expiry and renewal. 2- The names of the partners in professional companies and the data referred to in the previous article for each partner. 2nd Article: Anyone who desires to register his name in the Register of Chartered Accountants shall attach the following documents to his application: 1- A copy of the ID or the family card or the civil status card. 2- A pledge signed by the applicant that no Islamic prescribed sanction was executed against him and that he has not been sentenced in a crime involving moral turpitude or dishonesty. 3- A copy of the decision of accepting his resignation from a governmental or non-governmental organization unless he is a full-timer at one of auditing companies, so it is sufficient for him to bring a certificate stating that he is continuing to work in this office. 4- A certified copy of the document of obtaining the bachelor's degree in the specialization of Accounting or any equivalent document and attach a certified copy of the decision of its equivalence. 5- A copy of a valid certificate of membership in the Saudi Authority of Chartered Accountants. 6- A certified copy of the certificate of fellowship issued by the Saudi Authority for Chartered Accountants. 7- A certified copy of the certificates of experience. 8- A statement signed by the applicant showing the commercial and other businesses that he practices or shares. 9- The registered receipt of paying the due registration fees according to the 4th Article of the law of the Chartered Accountants.

3rd Article: Subject to the provisions of the 2nd Article of the law Chartered Accountants issued by the Royal Decree No. (M/12) dated 13/05/1412 AH, for considering the duration periods of practical experience spent in governmental authorities, it requires what follows: First: Offices of Chartered Accountants: 1- The office is registered and practicing work for five years at least. 2- The office has a qualified and full-time staff. 3- The office has not been sentenced for violations of conduct and ethics of the profession. Second: Governmental authorities and joint stock companies: 1- The period has been spent in a work of a supervisory nature on accounting and auditing such as internal auditing and financial management. 2- This period shall not be less than four years if the applicant holds a bachelor's degree (specialized in accounting), or equivalent. The period is reduced to two years if he holds a master's degree in accounting or equivalent and it is reduced to one year if he holds a doctorate degree in accounting or equivalent. Third: Other companies and individual institutions and individuals: 1- The institution has been registered in the commercial register for five years at least. 2- The institution's accounts are audited by an auditor. 3- The period has been spent in a work of a supervisory nature on accounting and auditing such as the internal auditing and financial management. 4- This period shall be not less than five years if the applicant holds a bachelor's degree (specialized in accounting), or equivalent. The period is reduced to two years if he holds a master's degree in accounting or equivalent and it is reduced to one year if he holds a doctorate degree in accounting or equivalent. 4th Article: The chartered accountant registered in the Registration of Chartered Accountants can practice businesses that do not conflict with the rules of conduct and ethics and in accordance with the following rules: 1- These businesses shall be professional businesses that complement the nature of his work, such as providing accounting, financial and administrative studies and consultancies, and the businesses of a nature based on consultancy.

2- These businesses shall be of non-professional economic activities, such as owning securities, farms and real estates, and participating in companies provided that he adheres to the following conditions: 1/2- To entrust the management to a full-time person, and he does not practice management. 2/2- To disclose the nature of his activity to his customers and inform them about the companies in which he is participating and to provide the Ministry of Commerce with the types of activities and the companies in which he is participating and the names of his partners in these companies as well as providing the Saudi Authority of Chartered Accountants with a copy of these. 5th Article: The chartered accountant shall not audit the accounts of companies or institutions in which he has an interest, directly or indirectly, and in particular the following: 1- The companies and institutions in which the chartered accountant is a partner or related to the fourth degree, to enter the end, to one of the founders or one of the members of the board of directors. 2- The companies and institutions that he participates in their founding or is a member of the board of directors or for which he provides advisory or administrative services. 3- The joint-stock companies in which the chartered accountant owns significant shares during his auditing period, and if he accepts to audit, he - before starting - shall alienate these shares. 4- The companies and institutions in which the chartered accountant is a partner of one of the employees or one of the major partners or a partner to the company itself. 5- The companies and institutions in which the chartered accountant is a supervisor of a religious endowment (waqf) or a guardian of the legacy that has a share in those companies and institutions. 6- The companies whose activities are similar to the commercial activities of the companies in which he is a member of the board of directors. 6th Article: The committee of registering in the Register of Chartered Accountants considers the applications submitted to it and shall make its decision within thirty days, at most, from the date of submitting the application; otherwise the application shall be regarded as rejected.

7th Article: The chartered accountant licensed to practice the profession shall notify the Ministry of Commerce of the spatial and postal address and the telephones of his office, and every change occurs to this address within fifteen days from the date of the change. In case of not notifying of the change, any notification directed to the registered address is considered true. 8th Article: No licensed person, whether an individual or a partner in a professional company registered in the Register of the Companies of Liberal Professions, shall sign the auditor's report unless he has participated in or supervised the auditing works. 9th Article: All the registered in the Registration of Chartered Accountants, whether they are individuals or partners in professional companies, shall provide the Saudi Authority of Chartered Accountants annually, or whenever required, with the following data: 1- The names of the companies and institutions that they are auditing. 2- The number of the financial statements that they have audited and copies of their reports about these statements. 3- The number and types of the operations and categories that will be audited in accordance with the auditing plan prepared for that. 4- The information or other data required by the Saudi Authority of Chartered Accountants. 10th Article: Without prejudice to the provisions of the law of Labor and workers, the licensed chartered accountant, whether an individual or a professional company, shall employ a percentage of Saudis of not less than 20% of the total technical staff. 11th Article: In case the licensed chartered accountant stops practicing the audit profession, whether an individual or a partner in a professional company, for any reason, - temporarily or permanently- he shall follow the following procedures:

1- Notifying the Ministry of Commerce of the reasons of stopping and its duration within thirty days following the date of the stopping as well as providing the Saudi Authority of Chartered Accountants with a copy of that notification. 2- Notifying the Saudi Authority of Chartered Accountants of the operations he is auditing at the moment and that will be affected by the period of stopping and the actions to be taken to preserve the rights of his customers and the method by which the workers shall be kept within thirty days following the date of the stopping, and he shall coordinate with the Authority on how to deal with the effects of the stopping. 3- The other partners in the professional company, when one of the partners stops permanently, shall modify the company's contract in accordance with the law of professional companies and notify the Saudi Authority of Chartered Accountants of the taken action concerning how to assign the business which is supervised by the stopped partner to the other partners. 12th Article: When the chartered accountant who practices his work alone stops working, whether the stop is permanent or for a period that results in harm to the customers or others, and without taking the procedures set forth in the 11th Article of this regulation, the Saudi Authority of Chartered Accountants shall perform an inventory of the pending operations in his office and clarifies the rights and obligations of the office. And the Authority shall appoint a chartered accountant licensed to practice the profession to settle all the existing operations on the date of the stop and to settle the rights of workers and other obligations and rights. The Authority shall determine the due fees to itself and to the chartered accountant for this work. 13th Article: The investigation committee, set forth in the Article 29 of the law of Chartered Accountants, shall set the rules governing its work and it is approved under a decision of the Minister of Commerce. 14th Article: Taking into account what is required by the 1st Article of the law of professional companies issued by the Royal Decree No. (M/4) dated 18/02/1412 AH, cooperation is allowed between the chartered accountants licensed to practice the accounting and auditing profession in the

Kingdom and the non-Saudi chartered accountants who are non-licensed to practice the profession in Kingdom in accordance with the following: 1- The non-Saudi accountant shall be licensed to practice the profession of accounting and auditing. 2- Both shall sign a cooperation contract between them according to the form approved by the Saudi Authority of Chartered Accountants, and it shall be taken into account when preparing the contract model to emphasize the responsibility of the Saudi accountant in the face of customers. 15th Article: The participation of non-Saudi chartered accountants licensed to work in the Kingdom shall be prior to the law of Chartered Accountants enters into force, in accordance with the provisions of the law of professional companies issued by the Royal Decree No. (M/4) on the date of 18/02/1412 AH, and its executive regulation provided that to take into account that the participation percentage of the licensed Saudis in this company's capital shall not be less than 25%.

Ministerial Decree No. 1182, dated 28/11/1417 AH

The Minister of Commerce, according to powers assigned to him, Having reviewed the law of Chartered Accountants issued by the Royal Decree No. M/12, dated 13/05/1412 AH, and its executive regulation issued by the Ministerial Decree No. 993, dated 09/09/1414 AH; and having reviewed the minutes of the meeting dated 19/08/1417 AH, signed by the Acting Undersecretary for Commerce and the Undersecretary for Technical Affairs and the General Manager of the General Administration of Companies; and having reviewed the decision of the Board of Directors of the Saudi Authority of Chartered Accountants No. 9/3, dated 09/11/1417 AH. Decrees the following: Article (1): Amending the item (2) of the 5th Article of the Executive Regulation of Chartered

Accountants by adding the phrase (This ban does not include introducing the services of Zakat and tax for the same customer and at one time provided that the letter of agreement includes what confirms that the services of Zakat and tax are a part of the scope of the agreed task, and the fees of auditing and Zakat and tax services shall be presented in the company's general assembly for approval, to the end of the said item). Article (2): This decree shall be published in the Official Gazette and shall take effect from the date of its publication. Article (3): The competent authorities shall execute this decision, each in their own competence. May Allah bless, The Minister of Commerce

Ministerial Decree No. 1888, dated 26/10/1420

The Minister of Commerce, according to the powers assigned to him, Having reviewed the law of Chartered Accountants issued by the Royal Decree No. M/12, dated 13/05/1412 AH, and its executive regulation issued by the Ministerial Decree No. 993, dated 09/09/1414 AH corresponding to 19/02/1994 AD; and having reviewed the decision of the Board of Directors of the Saudi Authority of Chartered Accountants No. 4/2/3 dated 13/09/1420 AH corresponding to 21/12/1999 AD, Decree the following: Firstly: Re-wording the 10th Article of the Executive Regulation of the law of Chartered Accountants to provide for: 10th Article:

1- Unless the law of labor and workers and its executing decisions requires a higher percentage than the percentages set forth below; the licensed chartered accountant shall, whether an individual or a professional company, employ a Saudi percentage of the total of the technical staff according to the following: Number of employees Percentage

From (1) to (20) 20%

From (21) (30) 25%

From (31) and more 30%

And the percentage between 20% and 30% shall be applied gradually over a maximum period of three years, and the annual increase shall not be less than 30% of this percentage. 1- The accounting offices with more than twenty employees shall prepare an annual plan showing the detailed procedures that will be conducted by the office for the development of Saudi technical employees working in the office and of these procedures are: A- Facilitating the ways for technical Saudi employees working in the accounting office to get ready to apply to the test of the fellowship, including giving them the opportunity to attend training courses held by the Authority for this purpose. B- Urging the technical Saudi employees working in the accounting office to attend continual education courses and considering that as a basis for promotion in the office. C- Setting a time plan for the development of the Saudi employee in the office (auditor, supervisor, auditing manager, and partner). D- Evaluating the performance of the technical employees periodically and setting a time program to strengthen the weaknesses that need to be developed and following up the execution of the program and evaluating it periodically.

E- Providing an opportunity for the employees to participate in specialized professional committees. 2- The accounting offices are guided by the model employment contract, between accounting offices and technical Saudi employees, which is approved by the Saudi Authority of Chartered Accountants. Secondly: This decree shall be published in the Official Gazette and shall take effect from the date of its publication. Thirdly: The competent authorities shall execute this decision, each in their own competence. May Allah bless, The Minister of Commerce

Ministerial Decree No. 977, dated 18/06/1420 AH

The Minister of Commerce, according to the powers assigned to him, Having reviewed the 3rd Article and 17th Article and 38th Article of the law of Chartered Accountants issued by the Royal Decree No. M/12, dated 13/05/1412 AH, And according to the requirements of the public interest, Decides the following: Article (1): Approving the rules governing the work of the committee of considering the applications for registration in the Register of Chartered Accountants; according to the formula attached to this decision. Article (2): The competent authorities shall execute this decision and it shall take effect from the date of issuance. May Allah bless, The Minister of Commerce Firstly: The rules governing the work of the committee of considering the applications for registration in the Register of Chartered Accountants (the Committee).

1- The Tasks of the Committee: 1/1- Considering the applications for registration and renewal of registration in the Register of Chartered Accountants (the law) and making a decision to accept or reject the application in the light of the provisions of the law and its executive regulation. 1/2- Issuing decisions of canceling licenses of chartered accountants set forth in the 17th Article of the Law of Chartered Accountants, and the General Administration of Internal Commerce shall undertake executing the Committee's decisions in this regard after being approved by the Minister of Commerce. 2- Appointing or exempting the members of the Committee and the Secretary of the Committee and their membership period: 1/2- The Minister of Commerce appoints the members of the Committee for a period of a session of the Board of Directors of the Saudi Authority of Chartered Accountants (the Board), and the member of the Committee may be re-appointed for a second session. 2/2- The Minister of Commerce may exempt any member of the committee in the following cases: - Upon the request of the member to be excused from the membership of the Committee. - The member's misuse of his position in the Committee or misconduct that is considered, by the Minister of Commerce, harmful to the objectives and the reputation of the profession in general and the committee in particular. - The absence of the member for three consecutive meetings or five separate meetings during the year without a prior apology. 3/2- The Committee shall appoint a Secretary for the Committee session period. 3-The duties of the member of the Committee: 1/3- Commitment to neutrality and objectivity in all his practiced works within the committee and he shall refrain from raising any issue before the committee concerning private interests or what is inconsistent with the public interest. 2/3- The regular attendance to the meetings of the Committee, and the member who has sudden circumstances that require his absence from one of the meetings of the Committee shall notify the Chairman of the Committee, in writing, for that. A member shall not leave any session before its end except with the permission of the Chairman of the Committee. 4- The competence of the Chairman of the Committee and the Secretary of the Committee: 1/4- The Chairman of the Committee undertakes the supervision on accomplishing the tasks of the Committee and in particular the following:

1/1/4- He calls the Committee to convene and determines the time, date and place of each meeting of the committee meetings and the agenda in coordination with the members of the Committee. 2/1/4- He presides over the meetings of the Committee. 3/1/4- He prepares periodic reports on the activities of the Committee and submitting them to His Excellency the Minister of Commerce. 4/1/4- He represents the Committee before the Ministry and any other authority as required. 2/4- The Secretary of the Committee attends the meetings of the Committee without the right to vote and he prepares the minutes of the meetings and informs the dates of the meetings and the agendas to the members and he does all the administrative work of the Committee. 5- The Meetings of the Committee: 1/5- The Committee shall approve the schedule of its meetings at the beginning of each year and during each meeting the members shall agree on the subsequent one decisively. 2/5- The Committee shall hold a regular meeting at least every month or whenever required and the summoning shall be sent to attend the meeting before its date with one week at least, and the agenda and its documents shall be attached to the summoning. It is necessary to the complete quorum that all the members shall be present. 3/5- The decisions and recommendations of the Committee are issued by the majority vote of the present members. 4/5- Any member may have a reservation on any decision taken by the Committee provided that he shows the essential points on which he built the reservation. 5/5- Vote may be done through passing on some matters that need a speed urgent decision about them in case the Chairman of the Committee feels the need to do so. The letter that asks for voting shall include a sufficient explanation for the proposed topic for the vote and an explanation for any discussions related to the topic at the previous meetings, and the decisions or recommendations that have been taken on them. And the results of the voting shall be documented and the decision shall take effect if approved by all members of the Committee and the members are provided with a copy of it. 6/5- The Committee may summon whoever it sees to attend the Committee meetings and participate in the discussions without having the right to vote on the recommendations and decisions of the Committee. 6- Documenting the minutes of the Committee:

The Secretary of the Committee writes down, during the meeting, the most important discussions and, after completing the discussion of any topic, he summarizes the recommendations or decisions that have been reached as well as the draft minutes and he presents it to the members of the Committee to sign, and the signed copy shall be kept in a special file in the Ministry and all the documents and correspondences related to the minutes are attached to it. 7- Executive procedures for the work of the Committee: The Committee considers the applications submitted to it; it shall decide within thirty days, at most, from the date of submitting the application, and the registration procedures shall be completed in accordance with what is shown in the executive procedures for registering attached to these rules. Secondly: The executive procedures for registration or renewal: 1- Anyone who desires to register his name in the Register of Chartered Accountants (the Register) or renew his registration shall submit an application to His Excellency the Chairman of the Committee according to the form (1/2) and attach the documents relevant according to the form (1/1), and the Chairman of the Committee transmits the application and the attached documents to the Secretary of the Committee for consideration. 2- The Secretary of the Committee receives the application for registration and registers it in a special register indicating the number and date of the application and the attachments. 3- The Secretary of the Committee studies the application and its attachments and prepares a memorandum according to the form (2) and illustrates the completeness of the documents and the completeness of the conditions of membership and any other observations and attaches to it the registration application and its attachments. The memorandum is presented together with the application for registration and its attachments to the Committee within a period not exceeding three weeks from the date of receiving the application for registration. 4- The Committee shall examine the registration application and its attachments and render a decision in accordance with the form (3) to accept or reject or request the completion of some data, and in all cases the decision shall contain the bases on which the decision has been reached, and the minutes of the meeting of the Committee shall be prepared in accordance with the procedures of documenting the minutes of the Committee. 5- If the Committee considers the completion of data or the rejection of the application, the Chairman of the Committee notifies the applicant of this decision. And the application and its attachments are referred to the Secretary of the Committee to be saved. And if the Committee

considers accepting the application, the Chairman of the Committee refers the application and its attached documents to the Secretary of the Committee for registration in the Register of Chartered Accountants. 6- The competent officer in the Ministry registers the applicant accountant in the Register of Chartered Accountants (Individuals) according to the form (4) provided that the register includes in its bottom the name of the licensed chartered accountant and date of the license, number and expiry date and renovations. The documents related to the application are kept in a special file with the name of the licensed accountant. 7- After the registration of the chartered accountant in the Register of Chartered Accountants, he is granted a license to practice the profession for five years, according to the form (5). 8- Before the expiry date of the license with at least ninety days, the chartered accountant shall apply for a renewal application, and the Committee shall consider the application and make the appropriate decision about it and when renewing the application, the procedures referred to at the registration shall be followed. Thirdly: The used forms Form (1/1/A) The data and information that shall be submitted for registration in the Register of Chartered Accountants All those who desire to register their names in the Register of Chartered Accountants shall do the following: 1- Submitting an application to His Excellency the Chairman of the Committee of Registration in the Register of Chartered Accountants, according to the form (1/2/A) and he shall attach the following documents to the application: - A copy of the ID (Hafitha Number) or the civil registry. - Four photographs of the size 3 x 4 cm. 2 photographs of the size 2 x 2 cm. - A pledge signed by the applicant that he has never been convicted in one of the Islamic prescribed sanctions, or a crime involving moral turpitude or dishonesty, according to the form (1/6). - A certified copy of the document of obtaining a degree in accounting or an equivalent one and attach a certified copy of the decision of equalizing it. - A certified copy of the certificates of experience. - A copy of a valid certificate of membership in the Saudi Authority of Chartered Accountants.

- The name of the city, which will be the headquarters of the office, according to the form (1/5). - A statement of the works he practices side by side with his practice of the profession, including the names of the companies in which he is participating and the names of his partners in these companies in accordance with the form (1/3). - A declaration that he is devoted to practice the profession full-time and committed to the rules and regulations related to the profession and the professional standards according to the form (1/4). - A registered receipt of paying application fee. 2- Bringing in the original documents when applying for registration. 3- The submitted documents shall be in Arabic or translated by a certified office into Arabic if they are issued in a language other than Arabic. 4- Keeping the above mentioned documents in a file and indexing them according to the above-mentioned sequence. And the file shall be submitted to the Department of the liberal professions at the Ministry of Commerce. Form (1/1/b) The data and information that shall be submitted for the renewal of registration in the Register of Chartered Accountants All those who desire to renew their names in the Register of Chartered Accountants shall do the following: 1. Submitting an application to His Excellency the Chairman of the Committee of Registration in the Register of Chartered Accountants, according to the form (1/2/B) and he shall attach the following documents to the application: - A copy of the ID (Hafitha Number) or the civil registry. - Four photographs of the size 3 x 4 cm. 2 photographs of the size 2 x 2 cm. - A certified copy of the document of obtaining any scientific or professional degree after practicing the profession. - A certified and valid copy of a certificate of membership in the Saudi Authority of Accountants. - The name of the city, which will be the headquarters of the office, according to the form (1/5).

- A statement of the works he practices side by side with his practice of the profession, including the names of the companies in which he is participating and the names of his partners in these companies in accordance with the form (1/3). - A declaration that he is devoted to practice the profession full-time and committed to the rules and regulations related to the profession and the professional standards according to the form (1/4). - A registered receipt of paying application fee. 2- Bringing in the original documents when applying for registration. 3- The submitted documents shall be in Arabic or translated by a certified office into Arabic if they are issued in a language other than Arabic. 4- Keeping the above mentioned documents in a file and indexing them according to the above-mentioned sequence. And the file shall be submitted to the Department of the liberal professions at the Ministry of Commerce.

Ministerial Decree No. 718, dated 16/06/1415 AH

The Minister of Commerce, According to the powers assigned to him, Having reviewed the 29th Article of the law of Chartered Accountants issued by the Royal Decree No. M/12 dated 13/05/1412 AH, And the 13th Article of the executive regulation of the Chartered Accountants approved by the decision of the Minister of Commerce No. 993, dated 09/09/1414 AH, And according to the requirements of the public interest, Decree the following:

Article (1): Approving the rules governing the work of the committee investigating the violations of the provisions of the Chartered Accountants law issued by Royal Decree No. M/12 dated 13/05/1412 AH, according to the formula attached to this decision. Article (2): The competent authorities shall execute this decision and shall take effect from the date of issuance. The Minister of Commerce The rules governing the work of the committee investigating the violations of the provisions of the Chartered Accountants law issued by the Royal Decree No. M/12 dated 13/05/1412 AH 1- The Tasks of the Committee: Investigating the violations of the Chartered Accountants licensed to practice the profession in the Kingdom in accordance with the provisions of the Chartered Accountants law. 2- Appointing or exempting the members of the Committee and their membership period: 1/2- The Minister of Commerce appoints the members of the Committee for a period of a session of the Board of Directors of the Saudi Authority of Chartered Accountants (the Board), and the member of the Committee may be re-appointed for a second session. 2/2- The Minister of Commerce may exempt any member of the committee, except the Chairman of the Committee, in the following cases: - Upon the request of the member to be exempted from the membership of the Committee. - The member's misuse of his position in the Committee or misconduct that is considered, by the Minister of Commerce, harmful to the objectives and the reputation of the profession in general and the committee in particular. - The absence of the member for three consecutive meetings or five separate meetings during the year without a prior apology. 3-The duties of the member of the Committee: 1/3- Commitment to neutrality and objectivity in all his practiced works within the Committee and he shall refrain from raising any issue before the committee concerning a private interest or what is inconsistent with the public interest. 2/3- The regular attendance to the meetings of the Committee, and the member who has sudden circumstances that require his absence from one of the meetings of the Committee

shall notify the Chairman of the Committee in writing of that. 4- The competence of the Chairman of the Committee and Secretary of the Committee: 1/4- The Chairman of the Committee undertakes the supervision on accomplishing the tasks of the Committee and in particular the following: 1/1/4- He calls the Committee to convene and determines the time, date and place of each meeting of the committee meetings and the agenda in coordination with the members of the Committee. 2/1/4- He presides over the meetings of the Committee. 3/1/4- He prepares periodic reports on the activities of the Committee and submitting them to His Excellency the Minister of Commerce. 2/4- The Committee shall appoint a secretary to attend the meetings without having the right to vote and he prepares the minutes of the meetings and informs the dates of the meetings and the agendas to the members and he does all the administrative work of the Committee. 5- The meetings of the Committee: 1/5- The Committee shall approve the schedule of its meetings at the beginning of each year and during each meeting the members shall agree on the subsequent one decisively. 2/5- The Committee shall hold a regular meeting at least every two months or whenever required and the summoning shall be sent to attend the meeting before its date with one week at least, and the agenda and its documents shall be attached to the summoning. It is necessary for the complete quorum that all the members shall be present. 3/5- The decisions and recommendations of the Committee are issued by the majority vote of the present members. 4/5- Any member may have a reservation on any decision taken by the Committee provided that he shows the essential points on which he built the reservation. 5/5- Vote may be done through passing on some matters that need a speed urgent decision about them in case the Chairman of the Committee feels the need to do so. The letter that asks for voting shall include a sufficient explanation for the proposed topic for the vote and an explanation for any discussions related to the topic at the previous meetings and the decisions or recommendations that have been taken on them and the decision shall be made, in this case, by consensus. 6/5- The Committee may summon whoever it sees to attend the Committee meetings and participate in the discussion without having the right to vote on the recommendations and decisions of the Committee.

7/5- The Secretary General of the Authority undertakes executing the decisions and recommendations of the Committee in coordination with the competent authorities. 6- Documenting the minutes of the Committee: 1/6- The Secretary of the Committee writes down, during the meeting, the most important discussions and, after completing the discussion of any topic, he summarizes the recommendations or decisions that have been reached. 2/6- The Secretary of the Committee writes down a minutes for each meeting in which he writes the date and place of the meeting and the names of those who are present and absent, and a summary of the discussions and the texts of recommendations and decisions reached by the Committee signed by all members. 3/6- The signed copy of the minutes shall be kept in a special file at the Authority and all the documents and correspondences related to the minutes shall be attached. 7- Executive procedures for the work of the Committee: 1/7- Any communiqué for a violation of the provisions of the Chartered Accountants law shall be informed to the Saudi Authority of Chartered Accountants. 2/7- The violation shall be written down in a special register at the Authority and it shall include at least the following data: A- The name of the chartered accountant to whom the violation is alleged and the license number. B- The authority which reported the violation. C- The number and date of the letter under which the violation was reported. D- A summary of the violation. E- The number and date of the letter directed by the Secretary of the Committee to the chartered accountant to express his opinion on the violation alleged to him. F- The number and date of the latter received from the chartered accountant in response to the letter referred to in (E) above. G- The date of presenting the violation to the Committee and a summary of the Committee's decision regarding the violation. 3/7- The Secretary of the Committee sends a letter to the chartered accountant to whom the violation is alleged showing a summary of the violation and asking him to provide the Committee with his comments about this violation and attach any documents related to the violation within a period not exceeding four weeks. 4/7- The Committee shall consider the available documents and correspondences and may

request any other information that it sees important, or call any of the relevant parties of the violation and listen to what they have to say about the violation and make a decision concerning the violation within three months unless there are reasons which prevent that. And whenever the need arises, the Committee has the right to resort to consultants to study the violation and documents and correspondences related and prepare a memorandum on them and present it to the Committee. 5/7- If the Committee finds that the violation constitutes a crime; whereupon it refers the violation to the competent authority. And after the judgment, the Committee considers the violation from the disciplinary side, and after questioning the accountant and hearing his words, the Committee may apply one of the following sanctions: - Blame. - Warning. - Suspension from the practice of the profession for a period not exceeding six months. If the Authority considers that the violation does not constitute a crime, it may - after the completion of the investigation with the violator – apply one of the sanctions referred to above and it may save the papers of the violation if it considers that it does not deserve any of the set sanctions. In all cases, the decision of the Committee shall be justified; and the violator in all cases has the right to appeal against the decision of the sanction before the Board of Grievances. 6/7- If the Committee considers applying the sanction of delisting; it shall refer the violation papers to the Ministry Undersecretary for Technical Affairs to initiate the proceedings before the Board of Grievances. 7/7- The sanction of suspension and delisting shall be published at the expense of the violator in one or more of the local newspapers.

Ministerial Decree No. 946, dated 26/7/1419 AH

The Minister of Commerce, According to the powers assigned to him, Having reviewed the law of the competence of the Ministry of Commerce issued by the decree of the Council of Ministers No. (66) dated 06/04/1374 AH. And having reviewed the joint minutes of the representatives of the Ministry of Commerce and the Department of Zakat and Income and the Saudi Authority of Chartered Accountants, dated 15/02/1419 AH, corresponding to 09/06/1998 AD. And having reviewed the decree of the Board of Directors of the Saudi Authority of Chartered Accountants No. 10/2, dated 05/07/1419 AH corresponding to 25/10/1998 AD. And according to the requirements of the public interest. Decree the following: Article (1): The license to provide the services of Zakat and income tax shall be issued according to the rules attached to this decision. Article (2): This decree shall be published in the Official Gazette and shall take effect from the date of its publication. May Allah bless, The Minister of Commerce The Rules governing the licenses to provide the services of Zakat and Income Tax 1st Article: No person, whether natural or legal, is allowed to provide the services of Zakat and income tax unless he is licensed - to provide this service - by the Ministry of Commerce, however, the Chartered Accountants licensed to practice the profession of accounting and auditing in the

Kingdom may provide the services of Zakat and income tax without getting a special permit. The scope of the services of Zakat and income tax includes the following: 1- Preparing or helping in the preparation of the statement of Zakat and taxation. 2- Providing advice to taxpayers on matters related to the services of Zakat and income tax. 3- Representing the taxpayer before the Department of Zakat and Income Tax and Zakat and Tax committees as an agent of the taxpayer. 4- Providing consulting services to the Department of Zakat and Income Tax and Zakat and Tax committees related to the services Zakat and income tax including a field and office examination on behalf of the Department if asked to do so by the Department of Zakat and Income Tax or Zakat and Tax committees. And it shall be taken into account that the scope of the services of Zakat and income tax does not include any works related to auditing the financial statements of the institution. 2nd Article: Whoever is licensed to provide the services of Zakat and income tax shall: 1- Be of Saudi nationality. 2- Have full eligibility. 3- Be with good conduct and behavior. 4- Hold a bachelor's degree, or Master or doctorate in the specialization of accounting or management accounting or any other certificate that the competent authority considers an equivalent certificate to any of them. 5- Pass the test of Zakat and tax subject held by the Saudi Authority of Chartered Accountants. 6- Have practical experience after obtaining the qualification referred to in paragraph (4) above, provided that this experience period has been spent in a work related to the services of Zakat and income tax for not less than (3) years after obtaining the bachelor's degree. This period is reduced to two years after receiving the Master degree and it is reduced to one year in the case of receiving the doctorate degree. 7- Be devoted to work full-time to practice the profession, however, he may combine providing the services of Zakat and income tax and the businesses that do not conflict with the rules of conduct and ethics approved by the Saudi Authority of Chartered Accountants. 8- Pass three years at least after leaving work if the applicant was one of the employees of the Department of Zakat and Income Tax.

3rd Article: The licensed, whether an individual or a company after being registered in the Register, is allotted a license to practice the profession explaining the registration number and date of the license and it is valid for five years and renewed for a similar period on the request before the expiry date with at least ninety days. 4th Article: The licensed shall actually practice the profession and notify the competent authority at the Ministry of Commerce of the address of his office, when he submits the license application, and all changes that could happen to this address, within one month of that date. And the failure to notify the changes within the set time results in the correctness of any notification at his address registered at the Ministry. 5th Article: The licensed shall sign the reports himself if he is an individual or a partner who actually participated in or supervised the executed work for companies, and no one may be deputized to sign. And these reports shall be limited to the business specified in the 1st Article of these rules. 6th Article: The licensed shall take his personal name as the title of his office and the granted license shall be put in a prominent place of the office. 7th Article: The licensed, whether an individual or a company, shall pair his name to the license number and its date in all his publications, correspondences and all reports and data that he issues. He shall also provide the Ministry of Commerce with periodic reports on the nature of his work according to what is approved by the Minister of Commerce. 8th Article: The licensed shall comply with the conduct and ethics of the profession and accounting standards and the other professional standards issued by the Saudi Authority of Chartered

Accountants. The licensed shall also comply with the obligations set out under the approved laws, regulations and rules. The fees earned by the licensed due to his practice to the services of Zakat and income tax shall not be linked to the results of the service provided by him, like linking his fees a certain percentage of the amount that has been reduced from the estimated amount of the tax. 9th Article: The licensed shall attend a number of seminars and continual education courses determined by the Saudi Authority of Chartered Accountants. 10th Article: The licensed shall, in all cases, retain the papers introduced from customers, the office work papers and copies of the reports for a period of not less than ten years from the date of issuing his reports. 11th Article: The licensed is asked for compensation for the damage that happens to the customer or others due to errors done by him concerning the performance of his work and the responsibility shall be solidarity for the partners in the professional companies. 12th Article: The licensed shall (whether an individual or a company) employ a certain percentage of Saudis of the total staff, according to the ratio determined by the Ministry of Commerce, and without prejudice to the provisions of the law of labor and workers. 13th Article: All those who desire to obtain a license shall attach the following documents to his application: 1- A copy of the ID or the family card or the civil status card. 2- A pledge signed by the applicant that no Islamic prescribed sanction was ever executed against him and that he has never been sentenced in a crime involving moral turpitude or dishonesty, or a disciplinary decision was issued against him. 3- A copy of the decision of accepting his resignation from the authority he worked at.

4- A certified copy of the document of obtaining his degree. 5- A certified copy of the certificates of experience. 6- A statement signed by the applicant showing the businesses and other work he is practicing or he is participating in. And it shall be taken into account when renewing the license that he shall submit the original valid license and the certificate of Zakat and Income. 14th Article: In case the licensed stops practicing the profession for any reason, temporarily or permanently, he shall notify the competent authority at the Ministry of Commerce of that within thirty days following the date of his stop, and the license is terminated in the case of the permanent stop. 15th Article: In case the licensed stops practicing his profession permanently or for period that results in harm to customers or others, all the pending dealings and rights and obligations shall be settled in accordance with the rules and procedures approved by the Minister of Commerce. 16th Article: In case the licensed violates a provision of the provisions of these rules, he shall be punished by one of the following sanctions: 1- Warning. 2- Suspension from practicing the profession for a period not exceeding one year. 3- Terminating the license. And the authority, determined by the Minister of Commerce, issues the decision of the sanction after summoning the licensed and hearing his words concerning what is alleged to him, and the decision shall be justified. And the licensed may appeal this decision to the Minister of Commerce within one month from the date of notification and the Minister's decision in this regard is final. In all cases, the license is revoked if the licensed missed any of the conditions of practicing the profession.

Ministerial Decree No. (1/398), dated 25/02/1421 AH

The Minister of Finance and National Economy, According to his powers, And according to the 19th Article of the Income Tax law issued by the Royal Decree No. 3321, dated 21/01/1370 AH, and its later amendments, And based on the decree of the Council of Ministers No. (3), dated 05/01/1421 AH, issued with the agreement that the state shall afford 15% of the taxes on the profits of the companies that exceed one hundred thousand riyals a year and carrying over the losses for years to come, without specifying a certain period. Having reviewed what was currently presented to us by the General Manager of the Department of Zakat and Income in charge with his memorandum dated 14/01/1421 AH which is based on the findings of the committee formed to develop regulations for the execution of the decision referred to, Decree the following: 1. For the purpose that the state affords 15% of the taxes on the profits of companies that exceed one hundred thousand riyals, this ratio is calculated out of the prices of tax brackets provided for in the 11th Article of the tax law issued by the Royal Decree No. 3321, dated 21/01/1370 AH, and it includes all the taxable fund companies with the exception of the companies working in the production of oil, gas and hydrocarbons. 2. The state's affording to this rate of tax is confined only to the profits that exceed one hundred thousand riyals a year, and thus the applying when collecting the tax money from companies is as follows: The first tax bracket: 1 - 100,000 SR at 25% The second tax bracket: 100.001 - 500,000 SR at 20% instead of 35% The third tax bracket: 500.001 - million riyals at 25% instead of 40% Fourth tax bracket: over one million riyals at 30% instead of 45% 3. The net losses that can be carried forward shall be specified by the legally modified

operating losses, regardless the loss in the books. The operating loss means the expenses which may be decisive under the 14th Article of the tax law and in excess of the taxable income in the tax year. 4. All taxes payers who hold regular accounts and are subject to the income tax under the aforementioned Royal Decree will benefit from the principle of carrying losses over. 5. Those who are tax-exempt shall not benefit from the principle of carrying losses over except for losses accruing after the expiration of the tax exemption period due to them. 6. This decision applies on the fiscal years which end with dates subsequent to the decree of the Council of Ministers referred to, and it does not include the accounts of previous fiscal years, whether presented to the authority or not, and whether they are bound upon or not, or were being considered in the tax committees of objection or the appeal ones. 7. The General Manager of the Department of Zakat and Income shall approve the execution of this decree and report it to whom it may concern to be executed. May Allah bless, The Minister of Finance and National Economy

Ministerial Decree No. (929), dated 29/08/1416 AH

The Minister of Commerce, According to the powers assigned to him, Having reviewed the companies' law issued by the Royal Decree No. (M/6), dated 22/03/1385 AH on amending some provisions of the Executive Regulation of the companies' law, And having reviewed the law of professional companies issued by the Royal Decree No. (M/4), dated 02/18/1412 AH, And having reviewed the Executive Regulation of the law of professional companies issued by the Ministerial Decree No. (4), dated 08/01/1413 AH, And according to the requirements of the public interest,

Decree the following: 1st Article: The following amendments shall be made to the Executive Regulation of the law of professional companies issued by the Ministerial Decree No. (41), dated 08/01/1413 AH: (1) The item (4) of the 2nd Article shall be amended to the following text: "The foreign professional company shall have a permanent representative - at least one – in the Kingdom of not less than nine months of residence duration a year. The representative shall be a holder of a university degree, at least in the field of the specialization of the company, and be a member of one of the professional associations specialized in the same profession that is authorized and his practical experience shall not be less than ten consecutive years. And the foreign companies that participated in the establishment of the existing professional companies shall reconcile their positions according to these conditions within a maximum of one year from the date this decision enters into force in order to continue practicing the profession in the Kingdom." (2) The Article (5) shall be amended to the following text: "The company's contract is confirmed in writing before a notary, and the company's managers shall, within thirty days of its founding, publish a summary of this contract in a daily newspaper distributed in the headquarters of the company, and they shall ask - on the mentioned date – for the company's registration in the register of professional companies. Also they shall publish, in the same previous way; each amendment that may happen to the summary data referred to as well as the expiration of the company, and they shall ask on the mentioned date for the checking off with that in the register of professional companies." (3) The Article (11) shall be amended to the following text: "All contracts and receipts, banners, advertisements and other papers issued by the company shall bear the name of the company and its headquarters, license number, and if the company expired, it shall be mentioned in the papers issued by it that it is under liquidation. 2nd Article: This decree shall be published in the Official Gazette, and shall take effect from

the date of its publication. The Minister of Commerce Ministerial Decree No. (917), dated 12/03/1392 AH

The Minister of Commerce and Industry, Having reviewed the law of the competence of the Ministry of Commerce and Industry issued by the Council of Ministers decree No. 66, dated 06/04/1374 AH, which empowers the Ministry the authority of granting licenses to practice the liberal professions and developing rules and regulations necessary to do so, And having reviewed the Ministerial decrees issued with the numbers 420, 421, 422, on 11/06/1388 AH, on organizing the practice of the profession of engineering, engineering consultancy, lawyer profession, legal advisor, accounting and auditing profession and the recommendations attached to those decrees, And having reviewed the memorandum of the Legal Department No. 714 /M, on 19/08/91 AH, and what his Excellency the Undersecretary has shown in his letter No. 182 /M, dated 06/03/1392 AH, And according to the powers assigned to him, And according to the requirements of the public interest, Decree the following: 1st Article: The following conditions shall be added to the terms and conditions set forth in the recommendations attached to the Ministerial decrees referred to in the preamble to this decree.

(1) The scope of the license that is issued by the Ministry to a specific person to practice a specific liberal profession is limited to the particular city or cities or area or areas described in the license only without other cities or other areas in the Kingdom. If the license does not include specifying to a particular city or area where the licensed can practice his profession, it means that the license issued to him includes the entire Kingdom. (2) As of the date of this decision it is provided in the granted licenses that the issued license is limited to practice the profession in the city or cities or area or areas described in it only and the licensed shall not practice this profession outside this range unless he has a written permit authorized by the Ministry. (3) Opening a branch or an office to practice the liberal profession outside the city or cities or area or areas set in the license to practice the profession in its scope as specified in the previous item is considered a practice of the profession without a license. (4) If one of the licensed desires to practice one of the liberal professions by opening a branch for his office in a city or cities, or a specific area or areas outside the spatial range specified in the license issued to him, he shall - before practicing his work in this branch or office - obtain the necessary license from the Ministry to open it. In this case, the conditions of the first license to practice this liberal profession are applied to the license of opening a branch or an office which are set out in the Ministerial decree issued regarding each of these professions and the instructions applied by the Ministry in this regard. (5) The foreigner brought to work for a company or a civil institution and the staff of the governmental departments shall not open a branch for work after the official working hours outside the city where they work. 2nd Article: This decree shall be notified to those who are supposed to execute it and it shall take effect from the date of issuance. The Minister of Commerce and Industry

Ministerial Decree No. (85), dated 26/01/1409 AH

The Minister of Commerce,

Having reviewed the companies' law issued by the Royal Decree No. 6, dated 22/03/1385 AH, and its amendments, And the law model of the joint-stock company issued by the Ministerial Decree No. (192), dated 03/09/1404 AH, and its amendments, And the minutes of the Supreme Committee of Chartered Accounting No. 29, on 07/11/1408 AH, containing the recommendation to delete the reference to the topic of Zakat of Article (41) of the law model of the joint-stock company and leave it to the general rules and statutory provisions that apply to the companies that the Department of Zakat and Income Tax is specialized to apply, Decree the following: Article (1): The text of Article (41) of the joint-stock company shall be replaced with the following text: The annual net profits of the company - after deducting the general expenses and other costs – shall be distributed as follows: 1) 10% of the net profits are retained to form a statutory reserve and the General Assembly may stop this regular retainer when the set reserve reaches half of the capital. 2) Also …% of the net profits is retained to form an agreement reserve allocated for …% and this retainer shall be stopped when the set reserve reaches …. of the capital. 3) After that, it is distributed out of the remainder a down payment to shareholders which is equal to.....% of the capital. 4) After distributing the aforementioned,, …% is allocated for rewarding the Board of Directors and then the remainder shall be distributed to shareholders as an additional stake of the profits. Article (2): This decree shall be published in the Official Gazette (Omm Al Qura) and shall take effect from the day following the date of publication.

The Minister of Commerce

Ministerial Decree No. 692, dated 28/02/1406 AH

The Minister of Commerce According to the powers assigned to him, Having reviewed the 16th and 35th articles of the Accountants' law issued by the Royal Decree No. M/43, dated 13/7/1394 AH. And having reviewed the executive regulation of the Accountants' law issued by the Ministerial Decree No. 595, dated 13/11/1395AH, And having reviewed the Article 233 of the Companies law issued by the Royal Decree No. M/6, dated 22/03/1385 AH, and its amendments, And having reviewed the study prepared for this Ministry on the development of the financial accounting profession and auditing, which has been distributed to the relevant governmental competent authorities and the licensed accounting offices, And having reviewed the observations reported by these authorities on the study referred to, And having reviewed the minutes of the meeting of the Higher Committee of Chartered Accounting during its session on 24/01/1406 AH, which recommended the adoption of the mentioned study as guiding rules for accountants and auditors, And according to the requirements of public interest, Decree the following: Firstly: The attached study is approved. It is on the objectives and concepts of the financial accounting and the auditing standards and the standard of public presentation and disclosure as an official reference to guide all the chartered accountants licensed to work in the Kingdom of Saudi Arabia. Secondly: The Undersecretary shall execute this decree and refer the received inquiries about

this reference to the Supreme Committee of Chartered Accounting to express an opinion on them. Thirdly: This decree shall be published in the Official Gazette, and shall take effect from the date of its publication. The Minister of Commerce

Ministerial Decree No. (852) dated 10/07/1410 AH

The Minister of Commerce, Having reviewed the law of Chartered Accountants issued by the Royal Decree No. (42), dated 13/07/1394 AH, and its executive regulation, And the law of companies issued by the Royal Decree No. (6), dated 22/03/1385 AH, And the Ministerial Decree No. (692), dated 28/02/1406 AH, And the minutes of the Supreme Committee of Chartered Accounting during its meeting dated 26/02/1410 AH, And the memorandum of the Undersecretary for Technical Affairs No. 1966/11, dated 03/08/1410 AH, And according to the requirements of the public interest, Decree the following: Article (1): Without prejudice to the accounting concepts, rules and instructions, of the non-profit institutions, issued by the competent authorities, it is necessary - when preparing and

reviewing the financial statements of the institutions of different regular forms or the activity that they are undertaking – to commit to the provisions of paragraphs (582 to 618) and (679 to 713) and (744 to 751), and (772 to 775) which are about the requirements of presentation in the general disclosure which are contained in the study related to the objectives and concepts of accounting and presentation and disclosure standard as well as complying with the requirements of auditing standards which are all attached to the Ministerial Decree No. (692), dated 28/02/1406 AH, the referred to, as of the fiscal year that will end three months after the date of this decree. Article (2): Work shall continue with the forms attached to the standards in a guiding way and the phrase "the list of sources and the use of the funds", contained in paragraphs (581 and 582) of the presentation and disclosure requirement, shall be canceled. Article (3): The General Administration of Internal Commerce, at the Ministry of Commerce undertakes the follow-up of the commitment of the chartered accountants to the provisions of the 1st Article of this decree and it receives their suggestions and comments in order to study them and prepare a report including the result of the mandatory application of these standards and the suggestions on modifying or developing them during a period not exceeding two months from the expiration of two years on the date of this decree. 4th Article: This decree shall be published in the Official Gazette and shall take effect from the date of its publication. The Minister of Commerce

The Council of Ministers' Decree No. (126), dated 14/05/1424 AH

The Council of Ministers, Having reviewed the file received from the Divan of the Cabinet Presidency No. 7/b/5163, dated 04/02/1424 AH, containing a letter of His Excellency the Minister of Commerce and Industry No. 853/M, dated 30/10/1421 AH, containing His Excellency's proposal to modify the 28th Article of the law of the Chartered Accountants issued by the Royal Decree No. (M/12), dated 13/05/1412 AH, And having reviewed the law of the Chartered Accountants referred to above, And having reviewed the minutes prepared in the Authority of Experts No. (68), dated 11/02/1422 AH, And having considered the Shura Council Decree No. (60/60), dated 29/12/1423 AH, And having considered the recommendation of the General Committee of the Council of Ministers No. (161), dated 02/04/1424 AH. Approving the amendment to the 28th Article of the law of Chartered Accountants issued by the Royal Decree No. (M/12), dated 13/05/1412 AH, to become the following text: 28th Article: First: Anyone who violates the provisions of this law shall be punished with one of the following disciplinary sanctions: - Blame, warning, suspension from the practice of the profession for a period not exceeding six months. - Delisting the violator from the register of the Chartered Accountants, and the decision of suspension and the delisting shall be published at the expense of the violator in one or more of the local newspapers. Second: Without prejudice to the disciplinary sanctions set forth in this law, and any severer

sanction provided for in other laws, each person registered in the Register of the Chartered Accountants who violates the provisions of this law and this violation constitutes a crime shall be punished by imprisonment for a period not exceeding one year and a fine of not more than (two hundred thousand) riyals and not less than (fifty thousand) riyals, or one of them, the issued sanction decision shall be published at the expense of the violator in one or more of the local newspapers. Third: Without prejudice to the disciplinary sanctions set forth in this law, and any severer sanction provided for in other laws, everyone who has committed any of the following acts shall be punished with the sanctions specified in the item (second) of this Article: 1- Practicing the profession of accounting and auditing without obtaining a license. 2- Practicing the profession of accounting and auditing after the cancellation of the license or delisting or termination and he did not follow the necessary procedures for renewal. 3- Opening or creating or managing an office to practice the accounting and auditing profession without a license. 4- Providing untrue data or using illegal methods that resulted in granting him a license to practice the profession of accounting and auditing or led to the renewal of the license. 5- Using a means of propaganda that would get the public to believe that he has the right to practice the profession of accounting and auditing untruly. 6- Impersonating a title of the titles that are usually called on the practitioners of the profession of accounting and auditing. The Committee shall investigate the violations - of the provisions of the Law of the Chartered Accountants stipulated in the 29th Article of this law - with the violator. If the Committee found that person has committed any of the above, it issues a decision to close the office, and the following shall be done: 1. The Ministry of Commerce and Industry shall publish the closure decision in one or more of the local newspapers at the expense of the violator. 2. Coordination shall be done with the competent authorities to close the office. 3. Referring the violation to the Board of the Grievances for consideration, and the judgment shall be published in one or more of the local newspapers at the expense of the convicted person. A draft royal decree has been prepared for that and its wording is attached to this. Prime Minister

Royal Decree No. M/23, dated 06/02/1424 AH

With the help of the Allah the Almighty, We, Fahd bin Abdul Aziz Al Saud, The King of the Kingdom of Saudi Arabia, Based on the 70th Article of the Statute of the rule, issued by the Royal Order No. (A/90) and on the date 27/8/1412 AH, And based on the 20th Article of the law of Council of Ministers, issued by the Royal Order No. (A/13), dated 03/03/1414 AH, And based on the 17th and 18th Articles of the law of Ash-Shura Council, issued by the Royal Order No. (A/91) and the date 27/8/1412 AH, And having reviewed the law of the Chartered Accountants issued by the Royal Decree No. (M/12), dated 13/05/1412 AH, And having reviewed Ash-Shura Council's Decree No. (60/60), dated 29/12/1423 AH, And having reviewed the Council of Ministers' Decree No. (126), dated 14/05/1412 AH, We have decreed the following: First: Approving the amendment of the 28th Article of the Law of the Chartered Accountants issued by the Royal Decree No. (M/12), dated 13/05/1412, to become as the following text: "The 28th Article: First: Anyone who violates the provisions of this law shall be punished with one of the following disciplinary sanctions: - Blame, warning, suspension from the practice of the profession for a period not exceeding six months.

- Delisting the violator from the Register of the Chartered Accountants, and the decision of suspension and the delisting shall be published at the expense of the violator in one or more of the local newspapers. Secondly: Without prejudice to the disciplinary sanctions set forth in this law, and any severer sanction provided for in other laws, each person registered in the Register of the Chartered Accountants who violates the provisions of this law and this violation constitutes a crime shall be punished by imprisonment for a period not exceeding one year and a fine of not more than (two hundred thousand) riyals and not less than (fifty thousand) riyals, or one of them, the issued sanction decision shall be published at the expense of the violator in one or more of the local newspapers. Third: Without prejudice to the disciplinary sanctions set forth in this law, and any severer sanction provided for in other laws, everyone who has committed any of the following acts shall be punished with the sanctions specified in the item (second) of this Article: 1- Practicing the profession of accounting and auditing without obtaining a license. 2- Practicing the profession of accounting and auditing after the cancellation of the license or delisting or termination and he did not follow the necessary procedures for renewal. 3- Opening or creating or managing an office to practice the accounting and auditing profession without a license. 4- Providing untrue data or using illegal methods that resulted in granting him a license to practice the profession of accounting and auditing or led to the renewal of the license. 5- Using a means of propaganda that would get the public to believe that he has the right to practice the profession of accounting and auditing untruly. 6- Impersonating a title of the titles that are usually called on the practitioners of the profession of accounting and auditing. The Committee shall investigate the violations - of the provisions of the Law of the Chartered Accountants stipulated in the 29th Article of this law - with the violator. If the Committee found that person has committed any of the above, it issues a decision to close the office, the following shall be done: 1- The Ministry of Commerce and Industry shall publish the closure decision in one or more

of the local newspapers at the expense of the violator. 2- Coordination shall be done with the competent authorities to close the office. 3- Referring the violation to the Board of the Grievances for consideration, and the judgment shall be published in one or more of the local newspapers at the expense of the convicted person." Second: His Excellency Deputy Prime Minister and the Ministers, each within his competences, shall execute this decree. Fahd Ibn Abdul Aziz

The Council of Ministers Decree No. 397, dated 29/11/1433 AH

The Council of Ministers, after reviewing the file received from the Royal Divan No. 33251, dated 12/07/1433 AH, containing a letter of His Excellency the Minister of Commerce and Industry, the Chairman of the Saudi Authority of Chartered Accountants No. 2012/884, dated 15/06/1433 AH, regarding the request of His Excellency to approve the decision of the Board of Directors of the Saudi Authority of Chartered Accountants (2/10), dated 15/05/1433 AH, regarding the annexation of a representative of the Capital Market Authority and a representative of the Department of Zakat and Income Tax to the membership of the Board of Directors of the Saudi Authority of Chartered Accountants. And having reviewed the paragraph (2) of the Article (24) of the Law of the Council of Ministers issued by the Royal Order No. (A/13), dated 03/03/1414 AH, And having reviewed the 24th Article of the Law of the Chartered Accountants issued by the Royal Decree No. (M/12), dated 13/05/1412 AH, And having reviewed the minutes No. (523), dated 21/10/1433 AH, prepared in the Authority of Experts in the Council of Ministers, And having reviewed the recommendation of the General Committee of the Council of Ministers No. (895), dated 28/10/1433 AH,

Decree: Approving the addition of a representative of the Ministry of Finance (Department of Zakat and Income Tax) and a representative of the Capital Market Authority to be members of the Board of Directors of the Saudi Authority of Chartered Accountants.