A practical guide to the principal company and association categories subject to statutory financial statement audit requirements in Jordan, with key legal references and practical guidance for management.
The requirement for audited financial statements in Jordan is not limited to listed companies or large businesses. Jordanian legislation establishes annual financial reporting and statutory audit obligations for a number of legal forms.
The requirements can differ according to legal form, regulatory status and sector. For clarity, this guide focuses only on principal categories where the audit requirement is clearly established, without attempting to cover every exceptional or sector-specific case.
Which Entities Are Clearly Subject to Statutory Audit Requirements?
| Entity Type | Requirement | Principal Reference |
|---|---|---|
| Limited Liability Company (LLC) |
Statutory audit required Annual financial statements and related accounts are audited by a licensed auditor. |
Companies Law – Article 62 |
| Private Shareholding Company |
Statutory audit required Annual financial reporting includes audited financial statements. |
Companies Law – Article 75 bis |
| Public Shareholding Company |
Statutory audit required Audited financial statements form part of the annual statutory reporting process. |
Companies Law – Articles 140, 141 & 192 |
| Limited Partnership in Shares |
Licensed auditor required The general assembly appoints a licensed statutory auditor. |
Companies Law – Article 87 |
| Foreign Operating Company in Jordan |
Jordan audit certification required Financial information relating to Jordan operations is certified by a Jordanian licensed auditor. |
Companies Law – Article 243 |
| Registered Association |
Annual audit framework applies Annual financial reporting generally includes audited financial statements and an auditor’s report, subject to the applicable statutory exemption provisions. |
Associations Law and Registry requirements |
Limited Liability Companies (LLCs)
The Jordanian Companies Law requires the manager or board of managers of a limited liability company to prepare the company’s annual financial information, including its annual balance sheet, final accounts, profit or loss information, accompanying notes and cash flow information.
The relevant annual financial statements are required to be audited by a licensed auditor. The statutory audit is therefore part of the LLC’s annual corporate reporting process rather than an optional accounting service.
Private Shareholding Companies
Private shareholding companies are subject to annual financial reporting requirements under the Companies Law. Their annual financial statements and related financial information form part of the company’s statutory reporting package and are audited by the company’s auditors.
Management should coordinate the accounting close, preparation of the financial statements and statutory audit timetable in advance of the company’s annual reporting and general assembly process.
Public Shareholding Companies
Public shareholding companies operate under a more extensive statutory reporting and corporate governance framework.
The annual financial statements are prepared within the legally prescribed timetable and are certified by the company’s auditors. The Companies Law also regulates the appointment and responsibilities of the statutory auditor.
Depending on the company’s activities and regulatory status, additional requirements may also apply through the Jordan Securities Commission or another competent regulator.
Foreign Operating Companies in Jordan
A registered foreign operating company is subject to specific annual financial reporting requirements relating to its activities in Jordan.
The financial information submitted in respect of its Jordan operations is required to be certified by a Jordanian licensed auditor in accordance with the Companies Law.
This requirement is particularly relevant to foreign contractors, international groups and overseas entities operating through a registered branch or foreign operating company structure in Jordan.
Associations Registered under the Jordanian Associations Law
Registered associations in Jordan are subject to annual financial and administrative reporting requirements under the applicable associations framework.
The official Associations Registry framework provides for annual financial reporting that includes audited financial statements and the report of the licensed auditor, together with other information required by the competent authority.
The applicable legislation also contains an exemption mechanism for certain associations that meet the prescribed conditions. Where such an exemption may apply, the association’s current legal position should be assessed separately.
What Does a Statutory Audit Mean in Practice?
A statutory audit is an independent professional examination of an entity’s financial statements performed because an applicable legal or regulatory framework requires an audit.
International Standards on Auditing (ISA) are applied to mandatory audits in Jordan. The auditor plans and performs procedures designed to obtain sufficient appropriate audit evidence before forming an independent opinion on the financial statements.
External Audit & Assurance Services in Jordan
Learn more about HI-AUDIT’s statutory audit, review, agreed-upon procedures, donor-funded project audit and cross-border assurance services.
Preparing for the Annual Audit
An organized year-end process can significantly improve audit efficiency and reduce unnecessary follow-up. Depending on the entity, the audit file commonly includes:
For a detailed step-by-step overview of the audit process, typical documentation requirements, timeline considerations and year-end readiness, see our guide to financial statement audit in Jordan .
- Final trial balance and general ledger.
- Bank reconciliations and relevant confirmations.
- Receivables and payables schedules.
- Fixed asset records.
- Inventory information, where applicable.
- Tax and payroll reconciliations.
- Material agreements and financing arrangements.
- Relevant board or general assembly minutes.
- Draft financial statements and supporting disclosures.
Why the Auditor’s Professional Status Matters
Where Jordanian law requires a statutory audit, the engagement must be performed by an auditor legally licensed to practice in Jordan. An accounting or bookkeeping service provider does not, by itself, satisfy the statutory audit requirement.
Certain regulated sectors may also impose additional auditor eligibility or registration requirements. Management should therefore consider both the general professional licence and any sector-specific requirements.
What should management consider when appointing an auditor?
- Valid professional licence to practice audit in Jordan.
- Independence and absence of prohibited conflicts.
- Relevant industry and reporting experience.
- Understanding of the Jordanian regulatory environment.
- Appropriate audit methodology and quality management procedures.
- Clear communication with management and those charged with governance.
Can Other Entities Also Be Required to Have an Audit?
Yes. This guide intentionally focuses on principal statutory cases. An entity not included above may still require an audit because of:
- Sector-specific legislation or regulatory instructions.
- Licensing requirements.
- Bank or financing arrangements.
- Shareholder or investor agreements.
- Grant and donor agreements.
- Government contracts or project terms of reference.
- Internal governance or contractual requirements.
Frequently Asked Questions
Are all companies in Jordan required to have audited financial statements?
No. The audit requirement depends on the entity’s legal form and any additional sector-specific rules. Several major company forms are, however, clearly subject to statutory audit requirements.
Are limited liability companies required to have audited financial statements?
Yes. The Jordanian Companies Law establishes annual financial reporting requirements for limited liability companies and requires the relevant annual financial statements to be audited by a licensed auditor.
Do foreign companies operating in Jordan need a Jordanian auditor?
A registered foreign operating company is required to submit financial information relating to its Jordan operations in accordance with the Companies Law, certified by a Jordanian licensed auditor.
Do registered associations require audited financial statements?
Registered associations are subject to annual financial reporting requirements under the applicable associations framework. The framework includes audited financial information and an auditor’s report, subject to the statutory exemption provisions applicable in certain cases.
Is preparing financial statements the same as performing a statutory audit?
No. Management is responsible for preparing the financial statements. The auditor independently examines those financial statements and issues the auditor’s report.
Which auditing standards apply to statutory audits in Jordan?
International Standards on Auditing (ISA) are applied to mandatory audits in Jordan, subject to the applicable Jordanian professional and regulatory framework.
Official and Professional References
This article has been prepared with reference to the principal Jordanian corporate and associations framework and professional information relating to statutory audit requirements in Jordan.
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Professional notice: This article is provided for general professional information and does not replace a legal or regulatory assessment of a specific entity. Applicable legislation, regulations and filing requirements may change, and entity-specific requirements should be confirmed when necessary.
