Commerce Ministry urges companies to file financial statements to boost transparency and investor confidence

The Saudi Ministry of Commerce has urged companies to file financial statements to increase transparency and investor confidence. The ministry highlighted that preparing and submitting financial statements can enhance administrative efficiency, boost transparency, and foster trust among investors, owners, creditors, and banks. This practice also enables regulatory authorities to effectively carry out their duties.

According to the Companies Law, the responsibility for preparing and submitting financial statements rests with the company's president, manager, or chairman of the board, or with the board of directors in the case of a simplified joint stock company. The ministry clarified that this legal requirement applies to all companies operating under the Companies Law.

Under Article (17) of the Companies Law, specifically paragraph (2), companies are mandated to prepare financial statements at the conclusion of each fiscal year, adhering to the accounting standards approved in the Kingdom. These statements must then be submitted within six months following the fiscal year's end, as stipulated by regulations.

The ministry emphasized that the preparation and submission of financial statements can improve a company's administrative performance. By evaluating financial results, enhancing oversight of various departments, measuring operational efficiency, and providing accurate financial indicators, these statements facilitate better decision-making.

Moreover, compliance with these requirements bolsters investor and owner confidence by enabling them to assess profitability, return on investment, financial and operational risks, and compare different investment opportunities.

Filing financial statements also benefits creditors and banks, as it allows them to evaluate repayment capacity, liquidity levels, determine appropriate financing terms, and monitor adherence to loan and financing conditions. Additionally, financial statements provide regulatory authorities with the means to verify companies' compliance with laws and regulations, thereby strengthening investor and economic protection.

For submission purposes, companies can electronically file their financial statements through the Qawaem platform, accessible at the following link: https://qawaem.bc.gov.sa.