SCA announces new regulations to boost institutional transparency

ABU DHABI, Sep. 13th, 2008: Emirates Securities & Commodities Authority (SCA)and the UAE Ministry of Economy today set the end of July 2009 as a deadline for auditors operating in the United Arab Emirates to comply with a set of new regulations and procedures aimed at boosting transparency of the managements of public joined stock companies as well as advancing the level of governance up to the international standards, it was announced today.

The two bodies warned individual and corporate auditors against failure to demonstrably and unequivocally comply with the regulations and threatened legal actions against violators.

The step is based on the provisions of Federal Law No. 8/ 1984 and Federal Law No. 22/ 1995 on "Commercial Companies" which were enacted to regulate the activities of accountants and auditors in the country as well as to set controls on governance and institutional discipline.

SCA has further urged auditors and accountants to be independent from the relevant companies and keep away from any direct or indirect relations with client companies as well as from having memberships in their boards.

It also urged them not to be doing any work for client companies other than auditing. Accordingly, auditors are not allowed to offer any technical and administrative services or consultancy.