Among the developing landscape of Public Joint Stock Companies, compliance with statutory audit requirements is important. Audit firms in Dubai play a key role in ensuring transparency and compliance with regulatory standards within these enterprises. It is also important to know the role of Auditors of Public Joint Stock Companies.
What are the Key Audit Requirements for Public Joint Stock Companies?
Public Joint Stock Companies (PJSCs) run within a strict regulatory framework defined by Federal Decree Law No. 32 of 2021. It sets the foundation for strong financial governance. This law obligates explicit audit requirements, including;
- Transparency and Accountability
Transparency and accountability are initial principles for Public Joint Stock Companies. Audit requirements help as a key player in maintaining these values. Through careful audits, the companies validate their obligation to transparency. By this companies earn trust and reliability among stakeholders.
- Compliance with Financial Reporting Standards
A foundation of audit requirements for Public Joint Stock Companies is compliance with globally recognized financial reporting standards. International Financial Reporting Standards (IFRS) ensure consistency and precision in financial statements. It also nurtures investor confidence and enables international market integration.
- Governance and Internal Controls
Federal Decree-Law No. 32 places noteworthy emphasis on governance and internal controls within Public Joint Stock Companies. It is compulsory to evaluate the efficiency of internal control systems, compliance with rules and regulations, and reducing risks related to financial misconduct or fraud.
- Risk Assessment and Mitigation Strategies
Assessing risk management frameworks within Public Joint Stock Companies is also an audit requirement. It is mandatory to evaluate possible risks, including financial, working, and compliance-associated risks, and mitigation strategies to protect the company’s interests and protect investors’ investments.
- Selection and Qualifications of Audit Firms
Federal Decree-Law No. 32 outlines explicit standards for the selection of audit firms in Dubai commended with auditing Public Joint Stock Companies. These firms must validate knowledge, individuality, and compliance with expert standards. Demanding qualifications ensure that audits are conducted by capable professionals talented in upholding the peak standards of integrity and accuracy such as Farahat & Co.….
- Reporting and Communication Protocols
One of the essential aspects of audit requirements is the communication and reporting protocols. They all should be established by auditors. Open and transparent reporting approaches are important for handling audit findings, possible issues, and recommendations to the board of directors, investors, and regulatory authorities.
- Technical Progressions in Auditing
Progressions in technology have changed the audit landscape. It allows auditors to employ classy tools and techniques for more all-inclusive and well-organized audits. Public Joint Stock Companies leveraging these technical developments augment the precision and depth of their audit processes.
What are the Key Documents required for Audit in Public Joint Stock Companies?
Here’s an organized list of the key documents required for audit in Public Joint Stock Companies. They all are under Federal Decree-Law No. 32 of 2021 applicable in Dubai;
|Purpose and Description
|It includes balance sheets, income statements, cash flow statements, and notes to accounts. These statements offer a complete impression of the company’s financial performance and position. Compliance with documented accounting standards, such as IFRS, is compulsory.
|Internal Control Reports
|These reports show the efficiency of internal controls established by the PJSC to protect assets, avoid fraud, and ensure compliance with rules and regulations.
|Minutes of Board Meetings
|It includes Records of board meetings that have important decisions made by the board of directors. Auditors evaluate these minutes to guarantee compliance with legal requirements.
|Shareholder Agreements and Resolutions
|It includes Agreements and resolutions made by shareholders, such as detail on dividends, capital changes, and other important decisions. These all are key documents reviewed during audits to confirm compliance with legal and regulatory requirements.
|Corporate Governance Reports
|PJSCs are instructed to make reports on corporate governance practices such as detailing the structure, processes, and compliance procedures. Auditors evaluate these reports to guarantee obedience to regulatory criteria.
|Tax Filings and Documentation
|Tax returns, filings, and documentation are inspected to ensure correct reporting and compliance with tax rules. Auditors authenticate the reliability and precision of financial information provided in these documents.
|Contracts and Agreements
|A review of contracts and agreements came into by the PJSC is important to guarantee compliance with legal responsibilities and evaluate the impact of contractual arrangements on the business’s financial standing.
|Regulatory and Compliance Records
|Records representing compliance with explicit industry regulations and legal necessities form an essential part of the audit process. Auditors authenticate adherence to these regulations and values.
What are the Roles and Responsibilities of Auditors in Public Joint Stock Companies?
Auditors play an essential role in the financial network of Public Joint Stock Companies. They serve as independent regulators entrusted with safeguarding the accuracy and reliability of financial information. Federal Decree-Law No. 32 of 2021 defines explicit roles and responsibilities that are bellowed;
- Conducting Detailed and Independent Audits
At the fundamental of an auditor’s responsibilities lies the obligation to conduct detailed and independent audits of a Public Joint Stock company’s financial records. This includes meticulously examination of some documents to determine their precision and compliance with regulatory standards such as;
- Financial Statements
- Internal Controls
- Validating Compliance with Regulatory Frameworks
Auditors are obligated to verify that Public Joint Stock Companies follow the regulatory frameworks mentioned in Federal Decree-Law No. 32 of 2021. This involves assessing compliance with;
- Financial Reporting Standards
- Governance Structures
- Other Legal Requirements
It ensures that the company runs within the limitations of the Federal Decree-Law No. 32 of 2021.
- Evaluating Internal Control Systems
Another key responsibility of auditors is to evaluate the efficiency of internal control systems within Public Joint Stock Companies. This includes evaluating;
- Processes In Place to Safeguard Assets
- Prevent Fraud
- Ensure Compliance
Auditors offer recommendations for reinforcing these controls to alleviate risks efficiently.
- Reporting Audit Findings and Recommendations
Upon accomplishment of the audit, auditors make thorough reports. The reports have all the information about;
These reports are important for investors, regulators, and the board of directors. The reports provide an understanding of the financial health of the Public Joint Stock Companies and highlight areas that need consideration or improvement.
- Ensuring Independence and Objectivity
Federal Decree-Law No. 32 highlights the position of auditor freedom and objectivity. Auditors must keep an impartial stance, free from clashes of interest. They ensure that their opinions and decisions are only based on accurate evidence and expert judgment.
- Collaborating with Stakeholders and Regulators
Auditors are involved in cooperative efforts with internal stakeholders and regulatory bodies to guarantee unified audits and compliance. Active communication and collaboration simplify the exchange of key information. It enables auditors to accomplish their duties thoroughly and transparently.
- Continuing Specialized Development
In accordance with the decree’s obligations, auditors are involved in constant specialized development to stay well-informed of developing regulatory frameworks, auditing values, and developing industry trends. This continuing education ensures that auditors have the essential skills and knowledge to perform their responsibilities efficiently.
- Keeping Ethical Standards and Integrity
Obedience to ethical standards is essential for auditors working within Public Joint Stock Companies. They must conduct themselves with extreme integrity, keeping privacy, objectivity, and expertise throughout the auditing process.
What are the Evolving Trends of Auditing in Public Joint Stock Companies?
|Public Joint Stock Companies audits are observing a transformative move through the integration of progressive technologies. AI, data analytics, and automation rationalize audit processes, accuracy, competence, and depth of analysis.
|Focus on Risk Management
|Public Joint Stock Companies audits highlight a practical approach to risk management. Auditors are alert in classifying and addressing developing risks. It includes financial, operational, and compliance aspects.
|Enhanced Reporting and Transparency
|The decree highlights the importance of transparency in Public Joint Stock Companies’ operations. Auditors are familiarizing by providing more full and transparent reports.
|Adoption of ESG Auditing
|With an international shift toward Environmental, Social, and Governance (ESG) factors, Public Joint Stock Companies audits are integrating ESG considerations. Auditors assess a business’s sustainability efforts, ethical practices, and social influence.
|Emphasis on Freedom and Objectivity
|As we see Federal Decree Law No. 32 emphasizes the need for auditors’ freedom and objectivity. Auditors follow rigorous ethical standards that ensure neutral valuations free from conflicts of interest.
The complex audit requirements for Public Joint Stock Companies act as pillars of financial governance and transparency. Audit firms navigate the complicated landscape associated with Federal Decree-Law No. 32 of 2021. Audit firms in Dubai are famous for their commitment to brilliance and expertise in guaranteeing compliance and reliability in Public Joint Stock company audits. Their know-how demonstrates the devotion required to keep the integrity of audits, nurturing trust and accountability in Dubai’s land of corporate finance flourishing business atmosphere.
Read More: Audit Procedures And Regulations In The UAE
Kasun Liyanage is an Audit Manager with over 7 years of experience dealing with diversified corporate clients. He not only manages the team’s work schedule but also is an expert in handling audit areas such as external audits and fraud investigation, Internal control benchmarking and best practices and well as preparation of financial statements and IFRS compliance.