Finbarr Sexton, Ernst & Young, Doha, Qatar
Qatar is anxious to attract inward investment from foreign
companies for major industrial projects in the country. The Qatari
government is also conscious of the need for foreign investors to
have confidence in its financial and regulatory reporting regimes.
In the absence of national accounting principles and practices,
the Ministry of Economy and Commerce has accepted the adoption
of standards promulgated by the International Accounting Steind-
ards Board (IASB) as national accounting standards. In 1995,
the Ministry of Economy and Commerce issued instructions to
all public compEuiies that annual financial statements should be
drawn up in accordance with International Accounting Standards
(IAS). A separate set of accounting standards and principles for
banks was also approved by the Qatar Central Bank (QCB) in
1996. The standards issued by the QCB are similar to the pro-
nouncements of the IASB.
Stock market influences on financial reporting
The Doha Securities Market (DSM) commenced operations in May
1997, listing the shares of Qatari public shareholding companies.
At the end of 2(K)1, there were 21 companies listed on the exchange.
DSM management has encouraged the need for increased trans-
parency by requiring the financial statements of quoted companies
Fiscal and Regulatory Framework
to become more widely available. It has also established clear
guidelines for financial reporting by new entrants to the msirket
and has teiken an active role in promoting improved standards
of reporting by the companies already listed on the DSM.
All business enterprises are required to maintain adequate finan-
cial records. These need not be maintained in Arabic however.
The accounting and reporting requirements for companies with
limited liability (WLL) are established in the Commercial Comp-
anies Law, Law No. 11 of 1981. Income tax regulations specify
that taxable income must be recorded