VAT relief: UAE latest changes on late payment of VAT penalties for businesses Earlier, voluntary disclosures too carried high penalty charges and that’s scaled back
Things Your Auditor Will Need For An Audit in the UAE
Many have limited operating histories and have never been through an audit. Your auditors are going to need a lot of information to complete the audit and I can tell you we appreciate it when our clients have everything together.
If your business is going into an audit it is important to have as much information to hand as possible. Of the necessities any auditor will expect to review during the course of the audit are:
Most new companies use QuickBooks. You can easily export your general ledger to Excel or send a backup copy of your QuickBooks to the auditor. The general ledger is going to give your auditor a clear indication of the amount of activity they need to audit.
Auditors love your trial balance. All of the numbers in your financial statements are traced back to the trial balance and it is a key document for your auditor. This too will come from QuickBooks or your accounting software. We strongly prefer to receive it in Excel as we can copy it directly into the trial balance part of our electronic workpaper software. Oh – turn on the account number feature too.
Copies of loans, leases and material contracts
Accounting standards require disclosure of all loans, leases and in some cases material contracts. Your auditor needs copies to make sure your disclosures are complete and accurate. For example, standards require disclosure by year of your minimum required lease payments for the next five years and the minimum expected sublease payments, if any. Lease expense for all years presented must also be disclosed, and the lease is a key piece for testing that amount.
Material contracts may include, but are not limited, to long-term agreements with suppliers or customers, officer employment contracts, and buy-sell agreements.
Just about every company going public has some kind of debt. Auditors are required to confirm all debt with the creditors. Providing a current loan statement to your auditor will make the confirmation process easier, as it will have current information and, perhaps most importantly, a current mailing address.
Listing of all new fixed asset purchases with invoices
This is a given in any audit. If you had significant fixed asset purchases in years prior to the initial periods under audit, you should look for those invoices too.
Names and contact information for any attorneys used and stock transfer agent
Your auditor will have you send letters to your attorneys asking for a description of services provided and issues they are representing for you. Disclosures are required (and the rules are changing) on disclosure of contingencies relating to legal actions and this letter is key evidence for your auditor. The auditor is also required to obtain information from your stock transfer agent.
Copies of merger agreements (completed or pending)
We often see companies go public through a reverse merger, or perhaps they have completed a merger through which they started their operations. Either way, these agreements have a major impact on accounting and your financial statement presentation.
Articles of incorporation and by-laws
All corporations (private or public) must disclose the number of shares authorized, issued, and outstanding. Part of this information comes from your articles of incorporation. By-laws may have information on them that also must be disclosed.
Listing of all bank accounts, including bank name, account number and authorized signers
Your auditor must confirm the bank balance as of the balance sheet date. Fortunately, many banks now participate in an online service that is simplifying this process.
How can we help?
Alya Auditors serves businesses in the UAE with their experience in auditing, accounting, and VAT in the UAE. Experts will help them grow their business without having to combat challenges posed by inefficiencies in accounting tasks. We can also help entrepreneurs looking to start their dream business in the UAE. Get end-to-end accounting support coupled with the benefits of new-age technology that they use to boost your accounting tasks.
Apart from the above services we are also helping the companies and businesses in the UAE to file their ESR notification.
Learn more about Alya Auditors and its offerings.
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