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Jordan’s Regulatory Requirements for Financial Institutions

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The World Bank’s Report on the Observance of Standards and Codes (ROSC) - Accounting and Auditing for Jordan, published in June 2004, provides an overview of the country’s statutory framework for accounting and auditing. According to the report, financial institutions in Jordan are required to comply with internationally recognized accounting and auditing principles.

Compliance Requirements

  • Financial institutions in Jordan must prepare annual audited financial statements that comply with internationally recognized accounting and auditing principles.
  • Public shareholding companies, general partnerships, limited partnerships, limited liability companies, private shareholding companies, and foreign companies operating in Jordan are required to maintain sound accounting records and present annual audited financial statements.

Auditor Selection and Evaluation

  • Auditors are elected for one year and their performance is evaluated by company shareholders at the annual general meeting.
  • The auditor’s report must address several key areas, including:
    • Sufficiency of data and explanations obtained
    • Maintenance of satisfactory accounting records
    • Compliance with international standards
    • Reflection of all relevant legal requirements in the financial statements

Additional Requirements

  • In addition to the Companies Law, the Jordanian Securities Commission (JSC) Law No. 23/1997 and Directives on disclosures, auditing, and accounting standards require entities subject to JSC supervision to apply International Financial Reporting Standards (IFRS).
  • However, if there is a conflict between international standards and local legislation, the latter takes precedence.

Filing Requirements

  • The JSC requires all listed companies to file annual audited financial statements within 90 days of the fiscal year-end and mid-year reviewed financial statements within 30 days of the mid-year-end.
  • As a result, all companies in Jordan follow IFRSs, with the exception of those regulated by the JSC, which are required to comply with full IFRSs.

IFRS for SMEs

  • The IFRS for SMEs is an option for companies other than those regulated by the JSC.
  • However, no special adoption of this standard is currently required in Jordan.

Conclusion

Overall, Jordan’s regulatory framework requires financial institutions to comply with internationally recognized accounting and auditing principles, ensuring transparency and consistency in financial reporting.