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Young, Doha, Qatar

Qatar is anxious toattract inward investment from foreigncompanies for major industrial projects in the country. The Qatarigovernm ent is also conscious of the need for foreign investors tohave confidence in its financial and regulatory reporting regimes.In the absence of national accounting principles and practices,the M inistry of Economy and Commerce has accepted th e adoptionof standards promulgated by the International Accounting Steind-ards Board (IASB) as national accounting standards. In 1995,the Ministry of Economy and Commerce issued instructions toall public compEuiies th a t annua l financial sta tem ents should bedrawn up in accordance with International Accounting Standards(IAS). A separate set of accounting standard s and principles forbanks was also approved by the Qatar Central Bank (QCB) in1996. The standards issued by the QCB are similar to the pro-nouncem ents of the IASB.

market influences on financial reporting

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66 Fiscal and Regulatory Frameworkto become more widely available. It has also established cleaguidelines for financial reporting by new entra nts to the msirkeand has teiken an active role in promoting improved standardof reporting by the companies already listed on the DSM.

Statutory requirementsAll business enterprises are required to maintain adequate financial records. These need not be maintained in Arabic howeveThe accounting and reporting requirements for companies witlimited liability (WLL) are established in the Commercial Companies Law, Law No. 11 of 1981. Income tax regulations specifthat taxable income must be recorded in accordance with thaccruals basis of accounting. They also specify that all originadocuments must be available for inspection and that the bookand records must consist of a general ledger, inventory bookand subsidiary ledgers appropriate to the business activity. Thfinancial year for a company is the Gregorian year unless thcompany's articles of association provide otherwise.

Financial reporting requirementsFiling requirements

For public shareholding companies, theaudited balance sheetincome statement, directors' report and aud itors' report m ust bsubm itted to the M inistry of Economy and Commerce within simonths of the company's financial year end. A representative othe M inistry of Economy and Commerce is required to be presenat the general assembly of shareholders.Similarly, audited financial statements of limited liabilitcompanies whose capital exceeds QR500,000 must be subm ittedto the Ministry of Economy and Commerce within 10 days of thegeneral assembly meeting. All companies with limited liability

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Accounting Principles and R eporting Req uirements 67

All companies listed on the DSM are required to prepare half-yeEU-ly interim financial statem ents. Although there is no formalrequirement to have these s tatem ents reviewed by independentaccountants, most companies listed on the m arket have opted tohave a review report issued on the interim accounts for share-holder protection.The interim financial statements m ust meet the requirementsof IAS 34, Interim F inancial Statements.

The QCB regulates thefinancialreporting and disclosure require-ments for commercial banks, exchange houses,financecompaniesand investm ent companies operating in Qatar. These entities arerequired to furnish the QCB with monthly accounts in a specifiedformat and toprepare comprehensive financial statements onan annual basis based on the QCB banking standards applicableto commercial banks and IAS for other financial services en tities.The M inistry of Economy and Commerce has recommended theadoption of the standards promulgated by the IASB for othercommercial entities operating in Qatar.

All limited liability companies whose capital exceeds QR500,000and all public shareholding companies should have auditorsappointed by the general assembly every year. In addition, allfinal income tax declarations must be accompanied by financialstatem ents audited by an auditor registered and based in Qatar.The auditor must be independent of the company being auditedand must be registered in the Register of Auditors as providedby Law No. 7 of 1974 - Organization of the Auditing Profession,which regulates the aud iting profession.

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68 Fiscal and Regulatory Frameworkof the company and w hether they contain all tha t is required blaw and the company's articles of association. An auditor mualso report whether the stocktaking procedure has been conductaccording to established principles, whether regular accounhave been kept by the company, whether the auditor has obtainall the information which is considered necessary for the satisfatory performance of the aud itor's duties , whether the informatiocontained in the report of the board of directors is in agreem ewith the accounting records of the company and whether aviolations of the provisions of law or of the articles have occurrduring the financial year in a manner as to infiuence the activior financial stand ing of the compeiny.

Accounting professionThere is no accounting body in Qa tar that has primary responibility for issuing pronouncements on professional ethics, by-lawand accounting and auditing standards. However, the Ministof Economy and Commerce regulates the activities of audit firmin Qatar and m aintains the Register of Auditors.

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