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Financial Compliance Audit Procedures in Brunei Darussalam

Brunei Darussalam has specific laws governing financial compliance audit procedures for private and public companies. The Companies Act sets out the requirements for maintaining accurate accounts and submitting them to the relevant authorities.

Private Companies vs Public Companies

• Private companies with 50 or fewer shareholders must have their accounts audited annually, but are not required to submit their accounts to the Registry of Companies and Business Names (ROCBN).
• Companies with more than 50 shareholders or those limited by guarantee must have their accounts audited and file them with the ROCBN.
• Foreign investors in Brunei are advised to engage the services of registered local advisors to navigate the complexities of financial reporting and auditing requirements.

Auditing and Compliance Requirements

Companies operating in Brunei must maintain accurate records of their financial transactions, including:

• All sales and purchases
• Receipts and payments
• Assets and liabilities

This is typically done by maintaining a cash book, journal for non-cash transactions, and ledger to record transactions.

Annual General Meetings (AGMs)

Private companies are required to hold their first AGM within 18 months of incorporation, while public companies must hold an AGM every year. The meeting must be called in writing at least 21 days prior to the start date, and directors must send a statutory report to members at least seven days before the meeting.

The report must include information such as:

• Company’s financial position
• Share allotments
• Cash receipts
• Details of directors, auditors, and company officers

Appointing Auditors

Companies in Brunei are required to appoint an auditor to audit their accounts. The auditor is appointed at the AGM and will hold the position until the next AGM.

Penalties for Non-Compliance

Failure to comply with financial reporting requirements can result in severe penalties, including:

• Fines of up to BND 10,000 (US$7,300)
• Imprisonment of up to 12 months

Companies that fail to hold an AGM can be liable to a fine of BND 5,000 (US$3,600), with directors also facing individual fines.

Conclusion

By understanding the financial compliance audit procedures in Brunei Darussalam, foreign investors can ensure they are meeting their regulatory obligations and avoiding potential penalties. If you require assistance navigating these requirements, consider consulting with registered local advisors who have expertise in financial reporting and auditing regulations.