Compliance and Regulations
Finance, Accounting, and Treasury Department Compliance and Regulations – A 360-Degree Approach
Ensuring Financial Integrity, Regulatory Compliance, and Risk Control for Mega Construction Projects
1. Introduction
The Finance, Accounting, and Treasury Departments at BEC Arabia operate under strict regulatory frameworks to ensure full financial compliance, accurate reporting, tax adherence, and risk management. Given the complexity of mega construction projects, compliance with local, regional, and international financial regulations is a critical priority.
This framework ensures BEC Arabia's financial operations align with Saudi Arabia’s financial laws, international accounting standards (IFRS & SOCPA), taxation policies, and banking regulations, safeguarding the company from financial risks, tax penalties, and regulatory breaches.
Core Compliance Areas:
Financial Reporting Compliance (SOCPA, IFRS, Saudi Ministry of Finance)
Taxation and VAT Compliance (Saudi ZATCA, E-Invoicing, Corporate Tax, Withholding Tax)
Procurement and Contract Finance Compliance (Etimad E-Procurement, FIDIC Financial Terms, Payment Regulations)
Treasury and Banking Compliance (Saudi Central Bank, International Banking Standards, AML/KYC Laws)
Audit and Risk Governance (Internal Financial Audits, External Regulatory Audits, Fraud Prevention)
Benchmark: 100% financial compliance with Saudi and international regulatory standards.
2. Financial Reporting and Accounting Compliance
2.1 Compliance with IFRS & SOCPA Standards
All financial statements must comply with International Financial Reporting Standards (IFRS) and Saudi SOCPA regulations.
Accrual-based accounting principles must be applied to ensure financial transparency.
Monthly, quarterly, and annual financial closing must follow Saudi Ministry of Finance reporting guidelines.
Key Compliance Deliverables:
SOCPA & IFRS-Compliant Financial Statements (Balance Sheet, Income Statement, Cash Flow Reports)
Monthly and Quarterly Financial Closing Reports
Regulatory Audit Readiness Documentation
Benchmark: 100% financial accuracy in external audits and compliance reviews.
2.2 Internal & External Audit Compliance
BEC Arabia must undergo annual external financial audits as per Saudi financial laws.
Internal financial audits must be conducted quarterly to ensure compliance with SOCPA, IFRS, and corporate financial policies.
Fraud detection and financial controls must be implemented to prevent financial mismanagement.
Key Compliance Deliverables:
Annual External Audit Compliance Reports
Quarterly Internal Financial Review Reports
Financial Risk and Fraud Prevention Assessments
Benchmark: Zero non-compliance findings in external audits.
3. Taxation and VAT Compliance
3.1 Compliance with Saudi ZATCA Tax Regulations
All financial transactions must comply with Saudi Zakat, Tax, and Customs Authority (ZATCA) regulations.
VAT compliance (15%) must be ensured for all supplier invoices, procurement transactions, and subcontractor payments.
Corporate tax obligations, withholding tax (WHT), and Zakat filings must be accurately recorded and submitted.
Key Compliance Deliverables:
Quarterly and Annual VAT Reports and Tax Filings
Withholding Tax (WHT) and Zakat Compliance Reports
Saudi ZATCA E-Invoice Submissions and Compliance Logs
Benchmark: 100% VAT compliance and zero penalties for tax violations.
3.2 E-Invoicing Compliance (FATOORA System)
BEC Arabia must comply with Saudi ZATCA's mandatory e-Invoicing (FATOORA) regulations.
All invoices must be electronically generated, stored, and integrated with VAT reporting systems.
Tax-compliant invoices must be issued for all project-related transactions and supplier payments.
Key Compliance Deliverables:
E-Invoice Generation and Storage Compliance Reports
VAT Filing and Electronic Submission Logs
Tax Compliance Audit Reports
Benchmark: 100% accuracy in VAT filings and e-Invoicing compliance.
4. Procurement and Contract Finance Compliance
4.1 Compliance with Etimad E-Procurement System
All government-related procurement and financial transactions must be processed through Etimad, Saudi Arabia’s official procurement platform.
Procurement contracts must align with Saudi financial regulations and transparency laws.
Supplier financial assessments must be conducted before finalizing procurement contracts.
Key Compliance Deliverables:
Procurement Approval and Financial Risk Reports
Etimad Compliance Audit Logs
Supplier Payment and Contract Financial Tracking Reports
Benchmark: 100% compliance with Etimad procurement regulations.
4.2 Contract Payment & Financial Obligations Compliance
All financial transactions must align with FIDIC contract financial clauses, ensuring payments are processed as per contract terms.
Advance payment guarantees (APG), performance bonds, and retention payments must be tracked and managed.
Subcontractor and supplier payments must be audited for compliance with financial regulations.
Key Compliance Deliverables:
Contract Payment Schedules and Financial Obligations Reports
Advance Payment and Retention Compliance Logs
Contract Financial Risk Assessments
Benchmark: Zero payment disputes due to financial non-compliance.
5. Treasury and Banking Compliance
5.1 Compliance with Saudi Central Bank (SAMA) Regulations
All corporate banking transactions must comply with Saudi Central Bank (SAMA) financial policies and anti-money laundering (AML) laws.
Credit facilities, loans, and financial guarantees must be structured as per Saudi banking compliance guidelines.
Foreign exchange (forex) transactions and currency risk hedging strategies must be monitored and reported.
Key Compliance Deliverables:
Banking Compliance Audit Reports
Credit Facility and Risk Monitoring Logs
Foreign Exchange Transaction Compliance Reports
Benchmark: 100% compliance with Saudi banking laws and financial risk mitigation strategies.
5.2 Compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) Regulations
All financial transactions must comply with Saudi Arabia’s AML and KYC regulations.
Treasury must monitor large financial transactions, supplier payments, and contract finance movements for fraud detection.
Regular financial risk assessments must be conducted to ensure legal compliance and financial transparency.
Key Compliance Deliverables:
AML & KYC Compliance Audit Reports
Financial Fraud Prevention & Risk Monitoring Logs
Banking Compliance and Regulatory Reporting
Benchmark: Zero financial fraud incidents and full KYC compliance for financial transactions.
6. Digital Financial Compliance & ERP Integration
6.1 Integration of Compliance Monitoring Systems
Technology
Functionality
Application in Compliance & Regulations
ERP System
Financial Reporting, Tax Management, Cost Control
Ensures all financial transactions are compliant with IFRS, SOCPA, and tax regulations
Aconex
Contract & Financial Document Control
Tracks financial obligations and contract finance compliance
Power BI Dashboards
Financial Risk Monitoring & Compliance Reporting
Provides real-time compliance tracking and risk alerts
Banking & Treasury Systems
Liquidity & Financial Risk Monitoring
Ensures banking transactions comply with AML and SAMA regulations
Benchmark: 100% of financial compliance reports and regulatory filings must be digitally tracked and monitored.
7. Conclusion
The Finance, Accounting, and Treasury Departments at BEC Arabia ensure:
Full compliance with financial reporting standards (IFRS, SOCPA, Saudi Ministry of Finance).
Strict adherence to Saudi tax laws, VAT regulations, and e-Invoicing compliance (ZATCA).
Transparency in contract finance, procurement payments, and supplier financial obligations.
Robust banking and treasury compliance with AML, KYC, and Saudi Central Bank (SAMA) policies.
Digital financial compliance tracking to prevent financial risks and regulatory violations.
By embedding structured financial compliance frameworks and governance policies, BEC Arabia ensures financial integrity, regulatory adherence, and risk-controlled financial management.
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