A Shura panel has backed amendments to the external auditors law that will tighten oversight by introducing tougher penalties and stricter professional standards for auditors. The financial and economic affairs committee said the changes are critical to safeguarding the kingdom’s financial transparency, international standing and economic stability.
A government-drafted bill amending provisions of Decree Law No 15 of 2021 on External Auditors was approved by Parliament last week. It is scheduled for debate by the Shura Council on Sunday.
Committee chairman Khalid Al Maskati said the amendments represent a timely intervention to modernise the regulatory framework governing the auditing profession.
“This legislation is a strategic update that strengthens oversight, accountability and professional standards in a sector that underpins investor confidence and financial integrity,” Mr Al Maskati said.
The bill was examined across three meetings held on January 11, 15 and 18, with participation from senior officials of the Industry and Commerce Ministry, the Central Bank of Bahrain (CBB), and the Bahrain Association of Accountants and Auditors.
According to the report, the draft law is constitutionally sound and justified under Article 87 of the Constitution, which allows for urgent legislation when delays could harm the public interest.
The Industry and Commerce Ministry warned that postponing reform would negatively affect Bahrain’s compliance with international obligations, particularly in corporate governance, anti-money laundering and counter-terrorism financing.
Mr Al Maskati
The amendments introduce wide-ranging reforms, including revised registration requirements for practising external auditors, the restructuring of disciplinary mechanisms, and the introduction of new oversight provisions.
Among the most notable changes is replacing the ‘Disciplinary Board’ with a newly titled ‘Auditors Accountability Council’, reinforcing the principle of professional responsibility. New articles are also added to regulate licensing, inspections and enforcement powers, while several existing provisions are amended to enhance clarity and effectiveness.
“The objective is to raise the quality of audit outputs and ensure independence and accountability,” Mr Al Maskati said. “This directly contributes to the credibility of financial reporting and protects the national economy.”
The committee noted that the legislation requires auditors to hold recognised professional certifications and at least five years of practical experience, aligning Bahrain’s regulatory regime with international best practices.
The CBB expressed full agreement with the government’s position, confirming that the bill was the result of sustained co-ordination between regulatory authorities.
Meanwhile, the Bahrain Association of Accountants and Auditors said the amendments were the product of four years of consultations and urged swift enactment.
“A modern financial system demands a modern audit profession,” Mr Al Maskati said. “This law strikes a careful balance between robust oversight and enabling professional growth.”
Mr Al Maskati affirmed that the bill supports Bahrain’s broader economic objectives, enhances market confidence and reinforces transparency across the corporate sector.
The committee has unanimously recommended approval of the draft law, describing it as a cornerstone reform that consolidates Bahrain’s position as a trusted financial and business hub in the region.
mohammed@gdnmedia.bh
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