What is Statutory Auditor?
A statutory auditor is an independent external auditor legally required to examine and express an opinion on the truth and fairness of a company’s financial statements.
How It Works
- Appointed by shareholders at the annual general meeting.
- Plans and executes the audit per ISA standards.
- Issues an audit report addressed to shareholders.
Saudi Context
In Saudi Arabia, statutory auditors must be SOCPA-licensed. The Companies Law requires every joint stock company and most LLCs above thresholds to appoint one. Listed firms rotate audit partners every five years.
Example
A Tadawul-listed bank appoints a Big Four SOCPA-licensed firm as its statutory auditor for a renewable one-year term.