In the past few years, great changes have taken place in the audit and verification industry not only in the United Arab Emirates, but also globally. With the development of science and technology, regulators have made numerous changes, which has become very huge. The main priority of the organization is to comply with these changes and ensure full transparency.
The auditors of the UAE play an important role in the growth of the organization. You need time to get to know all companies before auditing them. The business area, long-term strategy, organizational structure and all related risks usually include four stages: plan, audit on-site operation, review and signature. The planning phase includes meetings, reviews, and identification of risk areas and issues. In the second stage, we will conduct audit, document inspection, inventory verification and listen to experts’ opinions. The third stage reviews the process, and the final stage considers improving internal control.
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Article 27 of the Federal Law of the United Arab Emirates No.2 of 2015 stipulates that each joint-stock company or limited liability company in the United Arab Emirates must have its accounts audited annually by one or more auditors. Other types of entities may appoint auditors in accordance with the provisions of the Act. As a result, the UAE’s auditors examined the Company’s books and financial statements and played an important role in checking compliance with laws and local and international accounting standards.
UAE Court Audit Requirements
• According to the regulations of the United Arab Emirates, including VAT and transaction law, each company shall keep accounting records for at least 5 years after the end of each accounting year. These records can be either physical or electronic. In addition, the free zone regulations, which are different from the second federal law of the United Arab Emirates in 2015, insist on the alert boundary financial statements of each entity as the mandatory records of the entity.
• Listed companies shall submit audited annual financial statements to their respective stock exchanges in the United Arab Emirates before March 31 of each year.
• Entities supervised by the Central Bank of the United Arab Emirates, including banks, financial institutions and exchanges, shall submit annual audited financial statements before March 31 next year.
• Insurance companies and brokers within the scope of the Central Bank shall submit audited financial statements within 4 months after the end of the fiscal year.
• Free zone authorities shall submit audited financial statements for the year to the supervisory authorities, generally three or six months after the end of the financial year.
• Hotels operated in the UAE shall submit annual financial statements to the tourism department within 6 months after the end of the fiscal year.
• Branches of foreign companies must submit annual financial statements when renewing their business licenses.
Audit of financial statements in the United Arab Emirates
Companies in the United Arab Emirates generally prepare financial statements in accordance with international financial reporting standards. These financial statements are evaluated by independent auditors using international auditing standards on the audit procedures and standards for financial statements.
To ensure the accuracy of the financial statements, enterprises generally seek the assistance of qualified external auditors, who generally check the financial statements and the relevant disclosures provided by the management. This will help to provide professional advice on the company’s financial results and financial position within a certain period of time.
Auditors qualified in the UAE usually analyze the company’s business results, assess business processes and risks against management objectives, and compare them against industry standards. Therefore, the auditor will understand all aspects of the client’s business.
In the United Arab Emirates, audit is an obligatory process, and the services of qualified auditors can prove to be very beneficial. There are many consulting firms in the UAE that provide audit services, but choosing the right consulting firm that can provide high-quality professional services is indeed a challenge for each entity. HLB HAMT has a history of more than 20 years in the audit field. We have successfully provided quality audit with far-reaching efficiency.
