Conducting an annual statutory audit is mandatory for companies in the UAE. Mainland and Free Zone companies are obliged to submit their audited financials to renew the yearly trade license. It is legally essential for the audit to be conducted by an approved and licensed audit firm in Dubai. Audit firms in Dubai have extensive experience in conducting statutory audits for multiple companies across the UAE.
What Is the Standard Statutory Audit Procedure in Dubai?
In the UAE, an external audit firm conducts the audit. The audit firm verifies the organization’s financial statement, such as the earnings report, balance sheet, income statement, and statement of cash flows. Unlike regulatory legislation, statutory law is enforced directly by the government.
Thus, there are penalty implications in a case of non-compliance or fraud. Audit firms in Dubai check the accuracy of financial reporting, including filing tax returns.
Audit firms in Dubai have expert and qualified auditors to conduct a statutory audit for your company, and also enforce problem-solving techniques and consultation that enhance a company’s reputation and gain shareholders’ trust.
What Are the Statutory Audit Requirements for Your Company?
Local and foreign companies are required to audit their finances. International companies must submit their financial reports to their company’s branch based in the UAE. The auditors have the right to demand documents for review, which include contracts, bank statements, financial instruments, and legal documents.
The reports and documents must be held at least for a minimum of five years by the company. The auditors submit a liquidation report and their updated financial statements for companies that are bankrupt or liquidated.
Read more: Requirements for statutory audit in Dubai
12 Do’s and Don’ts for a Successful Statutory Audit in the UAE
Below are some of the do’s and don’ts for statutory audit:
- Do not manipulate your company’s financials to make them “audit-ready”. Rather be honest in your financial reporting.
- Prepare a checklist of audit requirements based on previous audit experiences. So you are ready with the documents when the auditor requests them.
- Avoid providing the wrong information. Maintain good communication with the auditor and request further details if you do not understand the requirements.
- Ensure there is an internal audit manager or a finance head to adhere to the auditor’s requirements. It will reduce the timeline of the audit.
- Confirm with the auditor if their questions have been answered satisfactorily before moving on to the next step.
- Answer precisely to the auditor’s questions so they can interpret the details accurately.
- If the audit requires information that doesn’t fit your scope of work, always ask the manager next in line.
- Understand that an audit is a learning experience, and each statutory audit prepares the finance department to be more confident with its financial reporting.
- Avoid beating around the bush if there is an error, accountants and auditors can fix some mistakes, and the audit companies in Dubai speak to the company’s management to eradicate any errors in the reporting.
- Various accountants of the finance team can cover audit checklists; hence try to share the checklist with the concerned accountant so you can get accurate details in less time.
- Avoid answering for someone else. If a question is unrelated to your scope of work, redirect it to the concerned person. Do not answer for the concerned person, as your information might be inaccurate, incomplete, or vague.
- Avoid guesswork during an audit. An external audit is known to be precise and accurate in its auditing work. Hence guesswork regarding any questions raised by the auditors during the audit can lead to erroneous reporting.
How Can Your Company Seamlessly Conduct Statutory Audits?
Audit Firms in Dubai provide an accurate and authentic view of the company’s financial health through an annual statutory audit. We provide consultation on risk management and how to mitigate potential risks. We have a proven record of yielding top-notch results for conducting statutory audits for multiple companies across the UAE. Thus, do not hesitate to contact us today and we shall be happy to assist you.
Theshani is a Senior auditor and has experience of 4+ years in providing audit assurance and advisory services to a wide range of industry clients. She continues to stay on top of ever-changing industry dynamics by continuously learning and developing expertise.