Capital Adequacy Reports review is an assurance service provided by an independent auditor. It involves examining and reviewing capital adequacy reports prepared by the CMA-licensed persons based on the capital adequacy ratios set by the Capital Markets Authority, thereby ensuring their financial stability and ability to safeguard against potential risks.
In this context, the Capital Markets Authority issued Resolution No. 170 of 2019 concerning the application of capital adequacy instructions to the licensed persons and devoted a module in the Executive Regulations titled “Module Seventeen – Capital Adequacy Instructions for Licensed Persons”.
What is the scope of applicability of capital adequacy instructions?
The capital adequacy instructions are applicable to all local CMA Licensed Persons operating in the State of Kuwait.
(Reference: Article 2-1 of Chapter 2 – Scope of Applicability, Module Seventeen – Capital Adequacy Instructions for Licensed Persons”).
Is it required to appoint a CMA registered auditor to provide assurance opinion regarding the application of capital adequacy instructions?
Yes, Article 2-3 of Chapter 2 – Scope of Applicability, Module Seventeen – Capital Adequacy Instructions for Licensed Persons indicates that a licensed person shall issue a capital adequacy report on a consolidated and quarterly basis, provided that such report shall be reviewed and audited by a CMA registered auditor for interim and annual reports.
What legislation and international standards does the independent auditor adopt in preparing the Capital Adequacy Review Report?
- Capital Markets Authority legislation and regulations
- International Standards on Auditing (ISA)
What is the timeframe set under Resolution No. 170 of 2019 for a Licensed Person to comply with the capital adequacy requirements?
The Licensed Persons that are subject to the Resolution No. 170 of 2019 shall comply with the requirements of capital adequacy instructions not later than 31 December 2020.
Are Licensed Persons required, during the transition person for complying with the capital adequacy requirements, to have assurance reports issued by a CMA-registered auditor?
No, they are not required to do so unless a licensed person will have reduced the capital as per the criteria set forth in Module Seventeen – Capital Adequacy Instructions for Licensed Persons or a licensed person receives the license after the issue date of the Resolution No. 170 of 2019.
What is the frequency of capital adequacy reports and the related deadlines for submission to the Capital Markets Authority?
A licensed person shall issue the capital adequacy interim reports on a quarterly basis and present the report to the Capital Markets Authority within forty-five days from the end of the financial reporting period.
What is the added value to business entities from Capital Adequacy Reports?
- Ensure compliance with the regulatory requirements of the Capital Markets Authority
- Contribute to achieving financial stability
- Enhance trust of investors, clients and stakeholders
What are the services provided by Baker Tilly Kuwait?
Assurance Report on Capital Adequacy
Why Baker Tilly?
- Baker Tilly in Kuwait is a member of Baker Tilly International network based in the UK, ranked amongst the top 10 global accounting networks.
- Auditors in Baker Tilly Kuwait are licensed by Ministry of Commerce and Industry and are registered with the regulatory authorities, e.g., Central Bank of Kuwait, Capital Markets Authority and Insurance Regulatory Unit.
- Extensive experience in providing assurance services to companies operating across various business sectors in the State of Kuwait.
- Highly experienced bilingual team with specialized academic qualifications and professional certifications.
- Commitment to performing assurance engagements according to predefined timelines, with no delays and responsiveness to client requirements.