23 Jan Annual Audit Requirement for DMCC Companies
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.
Our professionals will assist you to design your financial statements according to international accounting standards (IAS) and Auditing standards (ISA). We have alliance with renowned audit firms in UAE, which can provide you the best auditing services for both LLC and free zone companies.
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