AlKhodari’s external auditor Ernst & Young withdraws from auditing FY2018 financials

Abdullah A. M. Al-Khodari Sons Co.’s appointed external auditor, Ernst & Young, withdrew from auditing the company’s financial statements for the fiscal year 2018, during the ordinary general assembly meeting (OGM) held on June 4.

The company said in a bourse statement that Ernst & Young was appointed as an external auditor during the OGM held on May 30, 2018.

The company explained that the auditor’s withdrawal decision falls in line with the professional standards in the light of the following reasons:

1- The auditor was unable to obtain sufficient evidence on the preparation and fair presentation of the company’s financial statements according to the generally accepted accounting standards in Saudi Arabia.

2- The auditor was unable to obtain reasonable assurance about the management’s application of going concern approach.

3- The auditor was unable to receive the board’s approval on the financial statements in accordance with the company’s bylaws and requirements by the Saudi Companies Law. Hence, it was unable to obtain reasonable assurance about whether the financial statements as a whole are free of material misrepresentation, resulting from fraud or error, and thus unable to issue the auditor’s report that includes opinion.

4- The management’s persistence on rejecting the auditor’s disclaimer opinion through many mutual communications, advertising on Tadawul in a threatening form, and unacceptable interference in the scope of work with the aim of changing the results reached, which affected the external auditor’s independence.

Al-Khodari added that it will be seeking required regulatory procedures and will announce any updates in this regard in a timely manner.

The company’s shareholders disapproved the board's recommendation to replace the company’s auditor, during the OGM held on June 4, 2020, according to data compiled by Argaam.

The Saudi-listed firm has not disclosed its financial statements since the first 9 months of 2018, leading to suspension of its shares’ trading since April 30, 2019.