Overview of Accounting and Auditing in Bahrain
Bahrain established accounting and auditing standards to guarantee the integrity, transparency, and consistency of financial reporting. These guidelines are necessary for companies to display their financial data consistently and fairly, giving stakeholders a clear view of the financial health of the company. To preserve uniformity with international accounting practices, the accounting and auditing board of Bahrain is in charge of issuing accounting standards in Bahrain and aligning them with IFRS.
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Accounting Standards in Bahrain
Bahrain runs on the International Financial Reporting Standards (IFRS)-based Bahrain Financial Reporting Standards (BFRS), which were solely created by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). All companies registered in Bahrain, including Islamic financial institutions, must abide by specific BFRS regulations.
Bahrain lacks its own generally accepted accounting principles (GAAP), unlike other countries. Instead, when creating their financial accounts, all businesses must use the widely acknowledged IFRS. Each registered entity is required to provide a balance statement, a profit-and-loss account, and a director's report at the conclusion of each fiscal year under the Bahrain Commercial Companies Law. Companies must submit their accounts to the Ministry of Industry, Commerce, and Tourism within six months of the end of the fiscal year. The 30th of June has been declared as the official due date for filing accounts. In addition, businesses must submit an expected profit tax return by the 15th day of the third month of the tax year (calendar year).
Every business established in Bahrain is required to keep complete and organized books of accounts, as stated in Article 286 of the Bahrain Commercial Companies Law of 2001. They must also produce a thorough balance sheet, profit and loss account, and a thorough report on the business's operations and financial state for each fiscal year. Within at least three months after the end of the relevant financial year, these papers must be prepared. Additionally, the report must provide suggestions for profit sharing.
Auditing Standards in Bahrain
Role of Auditors
In order to assure accuracy, adherence to rules, and efficient use of resources, auditors analyze, assess, and verify financial records, statements, and processes for individuals or companies. An auditor's job is to impartially examine and evaluate the financial records, transactions, and business processes of people, businesses, or institutions. Their main goals are to guarantee the reliability and accuracy of financial accounts, identify any potential fraud or mistakes, and evaluate compliance with pertinent laws and regulations. Auditors support stakeholders in making informed choices and uphold transparency and accountability.
In addition to respecting professional ethics and technical requirements, auditors are expected to follow globally accepted auditing practices, principles, and standards defined by the International Accounting Union. Auditors of joint stock corporations are required to mention all material anomalies they discover in their yearly audit reports and to tell top authorities promptly of any major infractions. Without a license from the Minister of Commerce, registered auditors are not permitted to practice any occupations other than those directly linked to auditing.
Auditors must use their licensed offices within a year of receiving their license, and they must notify the appropriate government right once their office address or license information changes. A documented contract outlining the rights, obligations, parameters, and nature of the audit operations should be in place when auditors perform audits for third parties.
Auditors must uphold confidentiality and refrain from sharing any information acquired during their work unless it's required to do so in order to stop or report a crime. Auditors are not permitted to purchase or sell shares of the audited firms during the audit period and must avoid any conflicting roles inside the companies they audit.
Qualification of Auditor
The following condition must be followed to be an eligible auditor in Bahrain:
- The person must be a national of Bahrain
- The person should have full civil and legal qualifications
- The person should have a practical experience minimum of seven years in audit firms located in the State of Bahrain or outside (must include audit work)
- The person shall have a B.Sc. degree in either accounting or business administration with a specialization in accounting from a recognized university. The degree should not be of less than three years.
Services offered by Enterslice
Our team of experts guides and assists thorough accounting and reporting services, assisting businesses in setting up efficient frameworks for financial operations making transparency, efficiency, and data-driven decision-making our top priorities.
- Financial Reporting and Auditing: To guarantee the accuracy of financial statements and adherence to applicable accounting rules, Enterslice performs in-depth audits of financial accounts. Our thorough study delivers insightful conclusions and suggestions to improve financial performance.
- Accounting Advisory Services: By helping companies navigate regulatory changes, implement new accounting standards, and effectively address accounting concerns, our professionals advise businesses on complicated accounting challenges.
- Audit Services: Enterslice provides monitoring audit services to evaluate the efficacy of internal controls and guarantee regulatory compliance. We recommend risk reduction and process improvement by pointing out control shortcomings.
- Reporting Standards Compliance: For accurate reporting, our team makes sure that clients follow Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). We update clients on changing reporting requirements.
- Bookkeeping Services: Our bookkeeping services include the thorough and accurate keeping of several accounting documents. This entails making sure that financial records are accurate and well-organized, including cash books, general ledgers, fixed asset registers, and sub-ledgers for both accounts payable and receivable.
- Management Services: Management Services: We are professionals in drafting management reports that are specifically designed to satisfy the informational needs of executives. These reports, which include monthly accounts, cash flow statements, budgets, and forecasts, offer helpful information that helps management make wise decisions.
- Global Reporting: For global corporations, we offer assistance with the need for worldwide reporting, including consolidations, intercompany transactions, and adherence to laws in many nations.
- Regulation Compliance: Our professionals provide insightful guidance and support for abiding by pertinent accounting and financial regulations. We guide clients through intricate regulatory systems.
To help companies maximize financial performance and uphold compliance with accounting and auditing standards, our qualified specialists combine technical know-how with relevant industry experience.