Annual Audit for DMCC Companies in the UAE
Made for Trade, DMCC have firmly established Dubai as a leading centre for trading international commodities and the world’s fastest-growing Free Zone. DMCC regulate, promote and facilitate trade across a range of goods from gold, diamonds and precious metals to tea, food and industrial materials. Today, as home to major multinationals and start-ups, DMCC connect more than 15,000 businesses with the world-class services, leading infrastructure and vibrant community they need to thrive and succeed.
High Quality and Independent Auditing is a critical element in every company. It is evident that a free and fair auditing improves company’s reporting. Furthermore, auditing enhances transparency, credibility, and relevance in reporting. Auditing recognizes all the possible evidence that formulates and evaluates the opinion, particularly by communication that it carried out. If the auditing process is carried out by an independent auditor, it often makes essential suggestions to improve controls and enhance the operating efficiency.
Consequently, Auditing helps the accountants to detect and prevent any possible Errors and Frauds. It also maintains accountability throughout the company. Additionally, an auditing practice helps a company to comply with rules and regulations stipulated by the legal authorities. In short, auditing is considered as the foundation of good and effective governance in any organization. For the betterment and growth of the business organizations, the requirement of annual audit reports (Balance sheet and profit and loss accounts) in the UAE Free Zones should be viewed as a positive step by the legal authorities.
Auditing is mandatory for most of the Free Zone Companies especially those registered under Dubai Multi Commodities Center (DMCC). In accordance with the DMCC Company Regulations clause (62) every company needs to appoint auditor. The clause (64) under the DMCC Company Regulations states that the auditors need to report to the shareholders of the company and to make the audit report of the annual accounts. If a company fails to submit the audited financial statements within 3 months of the year end it is subject to a fine as per DMCC Company Regulations.
Therefore, as per the law, the Free Zone companies should appoint an auditor from those approved by the Free Zone Authority. In practice, the auditing services should only be delivered by audit firms that hold a valid professional license under the Economic Department. Eligibility of a firm is a key factor to consider when hiring an Auditor.
Benefits of External Audit Services in DMCC
One of the major benefits of the External Audit requirement is that it assists the companies in the process of renewing their DMCC business license. The External Audit of the entity’s financial statements and operations provide the entity’s stakeholders with information as to whether the financial reports are prepared in compliance with the applicable accounting standards and regulations and reflect a true and fair view of the entity’s financial standing.
An independent Audit report with favorable audit opinion also provides assurance to Banks, investors and financial institutions that are interested in investing in companies operating within the DMCC free zone.
The Audit report also provides employees with information through which they can assess the company’s existing financial position and its future prospects and therefore can plan for their future accordingly.
How Alya Al Marzooqi Auditors can help you in Complying with the External Audit Requirement?
Alya is a professional service company providing services in the field of Audit, Accountancy, Business Advisory, Business Consultancy and Tax Consultancy. Alya Al Marzooqi Auditing Chartered Accountants is a well reputed and recognized Audit Firm of UAE which is an approved audit firm in DMCC and many other free zones in the UAE. Our exceptional knowledge in Auditing,Accountancy, and Consultancy services means that we can provide you with a variety of services catering to your needs, all from a single platform, executed by qualified and experienced audit and accounting professionals.