A Guide to External Audit Requirements in DAFZA

If you have a company in Dubai Airport Free Zone, you must get your books of accounts audited without fail. You need to get the books of accounts audited by auditors in Dubai as per the regulations of the DAFZA free zone authority. Failing to conduct an external audit in DAFZA will attract consequences as detailed in the DAFZA regulations. You can hire registered audit firms in Dubai to seamlessly conduct an audit in DAFZA. The following blog will enlighten you further on the audit requirements in DAFZA:

What’s the Rule for Maintaining books of accounts in DAFZA?

Companies registered with DAFZA are required to maintain their accounts and get them audited by an auditor. The accounting records of a DAFZA company should be maintained for at least six years from the date upon which they were created.

Is it Mandatory to Hire Approved Auditors in DAFZA?

DAFZA maintains a list of approved auditors and the companies must get their books audited by approved auditors in DAFZA. The free zone will not accept the audit report prepared by audit firms not included in the DAFZA’s approved auditors list.

Is Submission of Audited Reports in DAFZA Mandatory?

Companies registered with DAFZA are required to submit their audited financial statements to the free zone authority. DAFZA may request the audited financial statements at the time of trade license renewal. Prepare well before hiring approved auditors in DAFZA so that the audit process can be smooth for both the auditors as well as the companies.

Documents Required by the DAFZA Approved Auditors to Conduct the Audit

In order to conduct the audit and assurance, the auditors ask the companies to furnish the documents corresponding to the relevant year, which facilitates the auditor’s job to draw an opinion on the financial position by analyzing the financial statements at the year-end to comply with regulations. The companies are required to present the following documents:

• Bank Statements
• Independent balance confirmations from banks, customers, suppliers, and related parties
• Credit/ debit confirmation for all financial transactions
• Copies of bills and invoices
• Memorandum of Association (MoA)
• Articles of Association (AOA)
• Latest Trade License
• Registration Details for VAT and Excise Tax (If Applicable) including returns of the full year
• Books of Accounts

Why You Should Carry Out an Audit in DAFZA?

The auditor’s report will assure the Authority that the company’s financial statements have been prepared as per local and international standards such as the IFRS. Companies need to get their books of accounts audited by DMCC-approved auditors for the following reasons and benefits:

• To comply with the DAFZA regulations
• To get their trade license renewed
• To understand the company’s financial position
• To increase the shareholder’s confidence
• To improve internal controls and procedure
• To increase credibility in front of banks, the government & potential investors
• To detect any act of fraud
• To avail of any free zone incentives and exemptions granted as per the UAE Corporate Tax Law

What Happens if You Fail to Carry Out an Audit in DAFZA?

Failing to submit the audited financial statements will be considered a compliance failure. The DAFZA Authority will not renew your trade license if you fail to submit the audited financial statements to the Authority. The company will also incur a fine as per the relevant regulations of DAFZA. Consult with approved auditors in DAFZA for more information on the consequences of not submitting the audited financial statements.

Hire Approved Auditors in DAFZA to Ensure Compliance

DAFZA-approved auditors such as Jitendra Chartered Accountants (JCA) can help you to submit your audited financial statements to the free zone authority within time. JCA can ensure that the financial statements are prepared as per the local and international reporting standards. JCA is one of the few audit firms in Dubai with more than 21 years of experience. We are registered with the DAFZA as an approved auditor and can help you comply with your annual financial audits.