Legal and Regulatory Influence on Financial Statements in the Oman

It is important to understand that financial statements are influenced by the legal and regulatory frameworks, which are adopted by every country and these rules can be local as well as international. It is important for companies to comply with all the rules and regulations set by the government and these rules & regulations are certainly going to have an impact on financial statements as well that how these statements will be produced and presented. It is also important to mention here that financial statements are prepared by companies so that they can show their actual financial position to their creditors, investors, shareholders as well as general public. It will show various state of the business like what liabilities a company ahs to pay or what kinds of assets are held by a company etc.

The Company Law of Legal and Regulatory Influence on Financial Statements in the Oman

 It is a body of government law, which governs the way businesses and companies should handle their relations, conducts and rights etc. This law regulates that how companies will practice their business in a certain country or region. The financial statements are important part of such company laws, because financial reporting is crucial for their true and fair conduct in the market. The company law for Oman is called “Oman Commercial law”. This law regulates that how companies will conduct business and how they will report their financial statements. According to Oman Commercial law, the companies operating in Oman with capital amount more than S$52,000 have to submit their actual audited financial statements as well as relevant data with final deceleration of tax. The important part of their commercial law that financial statements should be prepared with correct data and these financial statements should be developed in the Arabic Language. A LLC has to make sure that they submit their financial statements to their shareholders as per the given commercial law of Oman, and these statements should be prepared within 6 months time, once the year is ended ( EY, Oman, 2013)

Accounting Standards of Legal and Regulatory Influence on Financial Statementsin the Oman

It is important to understand that financial reporting of a company must meet some accounting standards, which are in line with the general accepted accounting principles (GAAP). In Oman’s commercial law, the accounting standards have been guide lined by the law for financial reporting of the companies. The accounting standards used in Oman’s company law are based on the International Financial Reporting Standards (IFRS). It is must by the law that whatever audits are being prepared, they should be done by the authorized auditors. The auditors and accountants have to comply with law, which regulates the accountancy & auditing profession in the jurisdiction of Oman. The Ministry of Commerce and Industry is responsible for preparing a list, which contains only authorized auditors. It is important to mention here that a LLC, which has more than ten shareholders in Oman, they have to submit their annual statuary audits for their correct financial reporting. Overall, it can be said that International Financial Reporting Standards (IFRS) are used in Oman Commercial law to regulate and manage the accounting standards in the country ( EY, Oman, 2013)

Stock Exchange Listing Requirements of Legal and Regulatory Influence on Financial Statementsin the Oman

The only stock exchange listed in Oman is called Muscat Stock Exchange. It is important to understand that stock exchange is a kind of market, where shares and stocks of the companies are sold or purchased, and if a company want to get listing for its securities, then they have to comply with the rules and regulations given by a stock exchange. It means that companies to get listed in Oman have to fulfill listing requirements of Muscat Stock Exchange. So, there are certain listing requirements for LLC and other companies in Oman stock exchange, like prospectus of the companies should be approved by Muscat Stock Exchange relevant authorities. The company has to share some important information to get their listing like they have to inform that what are the securities, which are being offered by the company, and what are its actual relevant details. The liabilities, assets and leadership information of the company are also required to get stock exchange listing. The company also has to show that what rights will be given to its investors and what would be the ratio of profit & loss (Prospectus.com, 2018)

References of Legal and Regulatory Influence on Financial Statements in the Oman

EY, Oman. (2013). Doing business in Oman. Retrieved December 18, 2018, from https://vae.ahk.de/fileadmin/AHK_Vae/10_Countries/Oman/DBI_Oman_v27.pdf

Prospectus.com. (2018). Muscat Stock Exchange Listing Prospectus. Retrieved December 18, 2018, from https://www.prospectus.com/muscat-stock-exchange-listing-prospectus/