The Government of Bahrain is set to discuss a bill in its parliament this week to revise the country’s framework for external auditors, the Daily Tribune reported.

The draft, forwarded with Royal Decree No. 76 of 2025, would amend Decree-Law No. 15 of 2021. It would introduce new registration, oversight and disciplinary arrangements, including replacing the current disciplinary body with an Account Auditors Accountability Council.

The Financial and Economic Affairs Committee has recommended approval in principle after holding sessions with the Ministry of Industry and Commerce, the Central Bank of Bahrain, the Bahrain Chamber of Commerce and Industry, and the Bahrain Accountants & Auditors Association (BAAA).

The ministry told the committee the accelerated timetable is linked to updating the rules in line with international standards, addressing unclear provisions, and reinforcing transparency, independence and accountability.

It also stated that while audit and reporting requirements would be strengthened, the duty to design and operate internal control systems would remain with company management.

One major amendment concerns eligibility to register as a practicing external auditor.

Under the proposal, applicants will need a valid professional accounting certification in addition to meeting conduct and experience requirements.

For non-Bahrainis, extra conditions would apply, including proof that they remain permitted to practice in the country where they previously worked.

The committee has supported revising Article 10 to add a Bahrainisation obligation for branches of foreign audit companies registered in Bahrain.

Under the committee’s suggested wording, those branches would have to employ Bahraini external auditors at a ratio at least equal to the level set by the Cabinet, based on a ministerial proposal and coordination with the competent authorities.

Changes are also proposed for the appointment and rotation of auditors, distinguishing between non-listed companies and listed entities.

The Central Bank of Bahrain would continue to set selection requirements for financial institutions, and the committee has recommended that the relevant wording should also include listed companies.

Additionally, the bill would expand what auditors must communicate in their reports. It would require disclosure of serious breaches identified during an audit that affect a company’s activity or financial position.

The bill will also expand the ministry’s quality control powers. The designated unit would be able to conduct full inspections or sample checks to evaluate audit work, compliance with international standards and adherence to professional ethics.