Audit of accounts is mandatory for some forms of entities in the free zone like the free zone companies (FZCO) and free zone establishments (FZE). In order to finalize the audit, it is obvious that the accounting records and documents must be available and well-maintained.
In UAE the general requirement for businesses is to maintain their records for no less than five years. The Commercial Companies Law states that the audit of accounts is necessary for all companies on the mainland.
The minds of most of the owners of the “Small and Medium” businesses in the UAE are filled with a lot of confusion and questions like… Is audit mandatory or not in the UAE? Should the books of accounts be audited every year or not? Whether financial reports to be submitted to any authority or not? etc. As per the new UAE Commercial Companies Law, Federal Law No. 2 of 2015, Article 27, Chapter 2, every company shall appoint auditors for auditing their books of accounts by a licensed auditor registered under the Ministry of Economy in the UAE. But many companies do not follow this requirement. As per the laws prevailing in the UAE, all companies are required to keep their books of accounts for a period of 5 years and do the annual audit, and keep these records in hand. In general, companies belonging to the SME category get their books of accounts audited in the following circumstances.
Some free zones, particularly in the northern emirates do not require the submission of audited accounts for certain companies; one needs to bear in mind that this waiver is only for the submission of the audit report to the authorities however the preparation of audit report for the entity itself cannot be overlooked. The maintenance of accounting records has become more important for nearly all kinds of entities in the UAE in light of the VAT in 2018. Companies have generally a time period between 3 to 6 months after the close of their financial year/period to complete the audit report and submit it to the general assembly. Maintenance of accounting records and audit of same also assists the management to understand the performance of the company and areas which need more attention.
Every company registered under UAE Commercial Company law must amend their Memorandum of Association (MOA) on or before 30th June 2017 to be in line with the provisions of the new UAE Commercial Company law issued in 2015. As per the provisions of the Law, it is mandatory to get the books of accounts audited every year. Hence with effect from 1st July 2017, every company registered under the law should get their accounts audited by a registered auditor.
Anyone whose business has a number of staff, functions, office locations or technical systems that she/he is not personally and solely operating may run the risk of errors or irregularities occurring in their business. It is also desirable to check and deter fraud by carrying out a regular audit.
Professionals at ALYA understand the crux of the business establishment process. We follow the International Financial Reporting Standards (IFRS) to main the professionalism in our deliverables making us one of the best audit firms in Dubai. Our team experts are members of Institute of Chartered Accountant of India (ICAI) and hold high industry experience in the field of Finance, Auditing, and Financial Advisory Services and Company Formation/Business Setup Services in Dubai thus making you leaders of your sector of business.To initiate the audit process, do contact us today – we’d be happy to assist you.
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Alya Al Marzooqi Auditing Chartered Accountants is the one. Leading CA Firms in Dubai,With its head office at Business Bay & a branch in SAIF Zone.Approved in all the major free zones including DMCC,SAIF,JAFZA,DWC,Maydan etc providing professional services in the field of Auditing , Accounting ,VAT Consultation , Company Formation & CFO services etc. For More Details Contact Us @ Tel : +971 4 876 9377, Mob: +971 52 975 0690, +971 52 475 4007
Alya Auditors assists the registered companies to furnish the annual financial statements . For more information visit us @ www.alyaauditors.com