Issued by Chairman of the Board of Directors of the Local Content and Government Procurement Authority Decision 1-4661-21.
Article 1
Definitions
The following terms and phrases—wherever they appear in this document—have the meanings assigned to each of them, unless the context requires otherwise:
Authority:
The Local Content and Government Procurement Authority.
Law of the Accounting and Auditing Profession:
The Law of the Accounting and Auditing Profession issued by Royal Decree D/59 dated 27 Rajab 1442 [27 January 2021], its executive regulation, and any subsequent amendments to them.
Rules:
The Rules and Instructions for Qualifying Audit Firms to Audit Local Content Percentages.
Agreed-upon procedures engagements for measuring local content percentage:
The procedures issued by the authority for measuring local content percentages, which are agreed upon between the qualified audit firm and the party whose local content percentage is being measured (and, where applicable, other parties).
Local content report:
A set of documents that a qualified audit firm provides to an establishment after executing the agreed-upon procedures engagements for measuring the local content percentage of the establishment. This includes: The agreed-upon procedures report for measuring the local content percentage, the local content measurement template prepared by the establishment, the disclosure letter signed by the establishment, and a declaration signed by the individual qualified as an expert, as well as any other documents requested by the authority.
Audit firm:
Every entity that practices the profession of accounting and auditing in accordance with the provisions of the Law of the Accounting and Auditing Profession, whether it is an individual office or a professional company.
Qualified audit firm:
An audit firm that has been qualified by the authority in accordance with the rules.
Qualified partner:
A partner licensed to practice the profession of accounting and auditing in accordance with the provisions of the Law of the Accounting and Auditing Profession, who has been qualified—by the authority—as a qualified partner in accordance with the rules.
Qualified individual:
An employee of an audit firm who has been qualified—by the authority—in accordance with the rules as an expert or practitioner.
Article 2
Objective
The rules aim to establish a framework for regulating the qualification of audit firms and their partners and employees to audit local content percentages.
Article 3
General Provisions
(a) An audit firm shall not execute the agreed-upon procedures engagements for measuring the local content percentage unless it is qualified in accordance with the rules.
(b) The application for qualification under the rules must be submitted through the website of the authority or any other means specified by the authority.
(c) The authority shall publish—through its website—a list of qualified audit firms and update it periodically.
(d) The authority has the right to request documents, data, or information—that it deems necessary for the purpose of implementing the rules—from the qualified audit firms, in order to verify that the firms meet the requirements mentioned in the rules.
(e) A qualified partner may act as an individual qualified as an expert, provided that he meets the qualification requirements for an individual qualified as an expert.
(f) The rules do not prejudice any laws, instructions, or obligations issued by the competent entities in the Kingdom. These rules apply to audit firms and their partners and employees.
(g) A qualified audit firm shall take measures to ensure that a qualified partner and a qualified individual comply with the provisions of the rules.
Article 4
Conditions and Requirements for Qualification
(a) In order to qualify an audit firm to execute the agreed-upon procedures engagements for measuring the local content percentage, the following conditions must be met:
1․ That it is licensed to practice the profession of accounting and auditing in accordance with the Law of the Accounting and Auditing Profession.
2․ That it is compliant with the job nationalisation percentages in accordance with the issuances of the competent entity or in accordance with the relevant legal or regulatory provisions.
3․ That it has a valid local content certificate, and that it achieves the minimum percentage of local content if required by the authority.
4․ That it has, during the submission of the qualification application, at least three qualified Saudi individuals, one of them being at the level of an expert and two at the level of a practitioner under the rules. The authority may amend the minimum number of qualified Saudi individuals required in accordance with the standards and controls it specifies.
5․ That it has a comprehensive programme (or tool) that is used to carry out the agreed-upon procedures for measuring the local content percentage, documents all procedures and execution steps, and retains and archives the completed works of the agreed-upon procedures.
6․ That—at a minimum—one of the partners in the audit firm is qualified in accordance with the rules.
7․ That no final judgment has been issued against the audit firm—or one of its partners—regarding the following:
– A judgment in accordance with article 10 of the Law of the Accounting and Auditing Profession.
– A punishment related to fraud crimes or any act that violates honesty or integrity.
– A punishment of removal under the Law of the Accounting and Auditing Profession during the five years preceding the date of the qualification application.
– A punishment of suspension under the Law of the Accounting and Auditing Profession during the two years preceding the date of the qualification application.
8․ Any other conditions specified by the authority.
9․ That it submits with the qualification application the required licenses, certificates, and documents in accordance with the conditions stipulated in this article.
(b) In order to qualify a partner responsible for the agreed-upon procedures engagements for measuring the local content percentage, the following conditions must be met:
1․ That he is a Saudi national.
2․ That he is licensed to practice the profession of accounting and auditing in accordance with the Law of the Accounting and Auditing Profession.
3․ That he has practised the profession of auditing after obtaining a license in accordance with the Law of the Accounting and Auditing Profession for a period of not less than five years prior to submitting the qualification application.
4․ That no final judgment has been issued against him regarding the following, unless he has been rehabilitated:
– A judgment in accordance with article 10 of the Law of the Accounting and Auditing Profession.
– A punishment related to fraud crimes or any act that violates honesty or integrity.
– A punishment of removal under the Law of the Accounting and Auditing Profession during the five years preceding the date of the qualification application.
– A punishment of suspension under the Law of the Accounting and Auditing Profession during the two years preceding the date of the qualification application.
5․ Any other conditions specified by the authority.
6․ That he submits with the qualification application the required licenses, certificates, and documents in accordance with the conditions stipulated in this article.
(c) In order to qualify an individual, he must meet the following conditions:
First: Qualification Requirements for the Expert Level
1․ That he is a Saudi national.
2․ That he has—at a minimum—a bachelor’s degree in accounting, or a fellowship certificate from the Saudi Organization for Chartered and Professional Accountants. If the bachelor’s degree is issued by a non-Saudi university, it must be equated by the competent entity in the Kingdom.
3․ That he has experience in auditing work—with one of the audit firms accredited by the competent entity in the Kingdom—for a period of not less than five years after obtaining a bachelor’s degree or three years after obtaining a fellowship certificate from the Saudi Organization for Chartered and Professional Accountants.
4․ That he has worked—at a minimum—on five agreed-upon procedures reports during the twelve months preceding the date of the qualification application.
5․ That—if he is licensed to practice the profession of accounting and auditing—no final judgment has been issued against him regarding the violation of article 10 of the Law of the Accounting and Auditing Profession, unless he has been rehabilitated.
6․ That no final judgment has been issued convicting him of fraud crimes or any act that violates honesty or integrity, unless he has been rehabilitated.
7․ Passing the exams specified by the authority.
8․ Completing the training programs specified by the authority as a mandatory requirement.
9․ Any other conditions specified by the authority.
10․ That he submits with the qualification application the required licenses, certificates, and documents in accordance with the conditions stipulated in this article.
Second: Qualification Requirements for the Practitioner Level
1․ That he has—at a minimum—a bachelor’s degree in accounting, or a fellowship certificate or membership certificate from the Saudi Organization for Chartered and Professional Accountants. If the bachelor’s degree is issued by a non-Saudi university, it must be equated by the competent entity in the Kingdom.
2․ That he has experience in auditing work—with one of the audit firms accredited by the competent entity in the Kingdom—for a period of not less than one year for Saudi individuals, and not less than three years for non-Saudi individuals, after obtaining a bachelor’s degree, fellowship certificate, or affiliate membership from the Saudi Organization for Chartered and Professional Accountants.
3․ That—if he is licensed to practice the profession of accounting and auditing—no final judgment has been issued against him regarding the violation of article 10 of the Law of the Accounting and Auditing Profession, unless he has been rehabilitated.
4․ That no final judgment has been issued convicting him of fraud crimes or any act that violates honesty or integrity, unless he has been rehabilitated.
5․ Passing the exams specified by the authority.
6․ Completing the training programs specified by the authority as a mandatory requirement.
7․ Any other conditions specified by the authority.
8․ That he submits with the qualification application the required licenses, certificates, and documents in accordance with the conditions stipulated in this article.
Article 5
Conditions and Requirements for Accepting Reports of Agreed-Upon Procedures for Measuring
the Local Content Percentage In order for the authority to accept the agreed-upon procedures report for measuring the local content percentage, the following conditions must be met:
(a) The agreed-upon procedures report for measuring the local content percentage must be signed by a qualified partner.
(b) Any other conditions specified by the authority.
Article 6
Obligations of Qualified Persons and Conditions for Continuing Qualification
(a) A qualified audit firm shall—without prejudice to the conditions and requirements for qualification contained in the rules—continuously meet the following conditions during the validity of the qualification:
1․ Complying with the provisions of the Law of the Accounting and Auditing Profession.
2․ Adhering to the agreed-upon procedures for measuring the local content percentage, and completing the local content report within a period not exceeding 15 working days from the date of obtaining all requirements from the entity or establishment whose local content percentage is being measured.
3․ Complying with the rules, conduct, and ethics of the profession, and with the accounting and auditing standards and the technical standards issued by the competent entity.
4․ Complying with all instructions and directives issued by the authority.
5․ That it has a qualified partner—at a minimum—in accordance with the rules.
6․ That the number of qualified individuals at the qualified audit firm during the validity of the qualification is not less than three qualified Saudi individuals—one expert and two practitioners—at a minimum. The authority may amend the minimum number of qualified Saudi individuals, in accordance with the standards and controls it specifies.
7․ That it does not assign the execution of the agreed-upon procedures for measuring the local content percentage to external sources and/or subcontract their execution, whether in whole or in part.
8․ Keeping the supporting documents related to the local content report for a period of ten years from the date of issuance of the report, without prejudice to the provisions of the Law of the Accounting and Auditing Profession and the relevant legal provisions, and enabling the authority to view them if requested. If the agreed-upon procedures report for measuring the local content percentage and the supporting documents relating to it are relevant to a dispute or a legal investigation, they must be kept until the dispute is settled or the investigation is completed.
9․ Obtaining the approval of the authority to execute the agreed-upon procedures engagements for measuring the local content percentage in the event of the existence or emergence of a conflict of interest between the qualified audit firm and the entity and/or establishment whose local content percentage is being measured, whether before or during the preparation of the local content report.
10․ That it has a valid local content certificate, and in the event that the certificate expires, it shall renew it within a period not exceeding three months from its expiry.
11․ That it achieves the minimum percentage of local content if required by the authority.
(b) An individual qualified as an expert shall—without prejudice to the conditions and requirements for qualification contained in the rules—continuously meet the following conditions during the validity of the qualification:
1․ Complying with the provisions of the Law of the Accounting and Auditing Profession.
2․ Complying with the rules, conduct, and ethics of the profession, and with the accounting and auditing standards and the technical standards issued by the competent entity.
3․ Complying with all instructions and directives issued by the authority.
4․ Participating in the execution of at least five of the agreed-upon procedures engagements per year.
5․ Attending meetings held or requested by the authority.
6․ Attending at least 50% of the workshops—specified by the authority—which it provides during the year.
7․ Signing the declaration contained in the local content report, which confirms that he has fulfilled his role.
Article 7
Exemption
The authority may—at its discretion and without prejudice to the provisions contained in the relevant laws and systems—exempt the applicant for qualification from some of the requirements contained in these rules.
Article 8
Notice Requirements
(a) A qualified audit firm shall notify the authority in writing within ten working days from the date of the occurrence of any of the following:
1․ If any of the qualification conditions mentioned in the rules are no longer met by the qualified audit firm or by any of the qualified partners or qualified individuals working for it.
2․ Updating the list of qualified partners in the qualified audit firm, upon the occurrence of any reason to update the list of partners.
3․ The existence of any updates that affect the qualification conditions of the qualified audit firm, the qualified partner, or the qualified individual in it.
4․ A change in the information provided to the authority when submitting the qualification application.
5․ As an exception to the written notification of the authority within ten working days from the date of the occurrence of the above-mentioned cases, a qualified audit firm shall notify the authority in writing immediately upon the occurrence of any of the following cases:
5․1 The filing of a lawsuit against the qualified audit firm or against the qualified partner in the firm, if the subject of the lawsuit affects the work of the firm or the practice of the audit profession.
5․2 Filing of a lawsuit against the qualified individual working for the qualified audit firm, if the subject of the lawsuit affects the work of the qualified individual or the practice of the audit profession.
5․3 Issuance of a final judgment or decision against the qualified audit firm, the qualified partner, or the qualified individual in it, related to the practice of the audit profession, fraud crimes, or acts that violate honesty or integrity.
(b) A qualified audit firm shall, upon ceasing to practice the profession or execute the agreed-upon procedures engagements for measuring the local content percentage by a decision from it or by virtue of a judgment or decision issued by the competent entity, notify the authority immediately and provide it with a plan that includes at least the following:
1․ Notifying the authority in advance and in writing of the date on which the qualified audit firm will cease to practice the profession or execute the agreed-upon procedures engagements for measuring the local content percentage, the period of cessation, and the reasons for this.
2․ Notifying its clients who are entities and establishments whose local content percentage is being measured by the qualified audit firm, within a reasonable period, of the decision or judgment issued regarding its cessation of practicing the profession or executing the agreed-upon procedures engagements for measuring the local content percentage.
3․ Completing any existing and remaining agreed-upon procedures engagements for measuring the local content percentage to the fullest extent, or taking appropriate measures to preserve the rights of its clients whose local content percentages are being measured, without prejudice to other relevant laws and instructions.
4․ Not contracting or agreeing with any entity, establishment, or individual to execute the agreed-upon procedures engagements for measuring the local content percentage.
5․ Submitting a report to the authority on the measures taken to execute the plan, and providing the authority with any updates on it if requested.
(c) A qualified audit firm, a qualified partner, or an individual qualified as an expert with a qualified audit firm is not exempted from the liability arising from their work in executing the agreed-upon procedures engagements for measuring the local content percentage before ceasing to practice the work of qualified persons in accordance with the rules.
Article 9
Procedures of the Authority Towards the Qualification Application
(a) The authority may, when reviewing the qualification application, take any of the following procedures:
1․ Conducting any investigations it deems appropriate.
2․ Requesting the presence of the qualification applicant or his representative to answer any questions and explain any matter that it deems related to the qualification application.
3․ Requesting the submission of additional information.
4․ Ensuring the validity of any information provided by the qualification applicant.
(b) The authority shall review the qualification applications and issue its decision within 30 working days from the date of receiving all information and documents related to the application.
(c) The authority may, after reviewing the qualification application, take any of the following procedures:
1․ Approving the qualification application.
2․ Approving the qualification application with the conditions and restrictions it deems appropriate.
3․ Postponing the decision for a period of time as it deems necessary to conduct further review and verification, or to allow the submission of additional information.
4․ Rejecting the qualification application while indicating the reasons.
(d) The authority shall inform the qualification applicant of the decision issued by it under clause (c) of this article.
Article 10
Cases of Non-Compliance
(a) The authority may, in the event that a qualified audit firm—or a qualified partner or an individual qualified as an expert with it—does not comply with any of the provisions of the rules, instructions, or directives issued by the authority, take any one or more of the following procedures:
1․ Requesting the correction of the non-compliance.
2․ Warning.
3․ Suspending the receipt by the qualified audit firm of any requests for the agreed-upon procedures engagements for measuring the local content percentage.
4․ Suspending the qualification of the qualified partner to sign the agreed-upon procedures report for measuring the local content percentage.
5․ Suspending the qualification of the qualified audit firm to execute the agreed-upon procedures engagements for measuring the local content percentage.
6․ Suspending the qualification of the individual qualified as an expert in relation to the execution of the agreed-upon procedures for measuring the local content percentage.
7․ Cancelling the qualification of the qualified partner with regard to executing the agreed-upon procedures for measuring the local content percentage. The authority may prevent the qualified partner from submitting a new qualification application for a certain period, as it deems fit.
8․ Cancelling the qualification of the qualified audit firm to execute the agreed-upon procedures engagements for measuring the local content percentage. The authority may prevent the qualified audit firm from submitting a new qualification application for a certain period, as it deems fit.
9․ Cancelling the qualification of the individual qualified as an expert with regard to executing the agreed-upon procedures for measuring the local content percentage. The authority may prevent the individual qualified as an expert from submitting a new qualification application for a certain period, as it deems fit.
(b) In the event that the authority finds a case of suspected violation of the Law of the Accounting and Auditing Profession in the reports submitted to the authority, the case must be referred to the Saudi Organization for Chartered and Professional Accountants for consideration and completion of the necessary procedure. The authority has the right to suspend the qualification of the qualified audit firm, the qualified partner, or the individual qualified as an expert with it—as a precautionary measure—until a final judgment or decision is issued by the competent entities.
(c) The person in respect of whom a procedure has been issued by the authority in accordance with paragraph (a) or paragraph (b) of this article may apply to the authority within 30 days from the date of the issuance of its decision and request a review of the decision taken. The person in respect of whom the decision has been issued shall submit the documents supporting the application for the authority to review its decision issued in accordance with this article.
(d) The authority shall take its decisions under paragraph (c) of this article within 20 working days from the date of completion of the relevant documents and papers.
(e) The person in respect of whom the decision has been issued may, in the event of the cancellation of his qualification, submit a new qualification application. The authority may consider the application and take the decision it deems appropriate in accordance with the provisions of article 9 of the rules.
(f) The person in respect of whom the decision has been issued may file a grievance against the decisions of the authority issued under the rules before the competent judicial authority within 60 days from the date of the issuance of the decision.
Article 11
Entry Into Force
1․ The provisions of these rules apply to new qualification applications after 180 days from the date of publication of the rules in the official gazette.
2․ Qualified persons must be granted a corrective period of 365 days from the date of publication of the rules in the official gazette, to implement the provisions of the rules.
Published in Umm Al-Qura 5089 issued on 27 May 2025.
