Why Audit Is Mandatory From Approved Auditors In DIFC?
It is mandatory that the companies operating within the DIFC are required to submit their audit report to the DIFC Authority within four months of the end of their respective financial year. The companies that fail to submit the audit report along with audited financial statements would have to face consequences like the non-renewal of their trade license. Appointing the best auditing firms in Dubai, UAE (that are listed with the DIFC Authority) will save the companies from such regulatory actions.
The auditor registered with the DIFC Authority is required to analyze and report on whether the books of accounts of the company are prepared in compliance with the local and international regulations such as IFRS and DIFC regulations. The auditor’s report should also state whether the records of the company provide a true and fair view of the financial statements of the company and are free from material misstatements.
The DIFC has stipulated that the companies licensed by it should only conduct business in the specific activities permitted under the trade license. The auditor’s report should also state whether the companies are undertaking any other activities that violate this regulation.
How Should Companies Prepare & Maintain Accounting Record for Auditing?
The companies operating within the DIFC are required to maintain the books of accounts that give an accurate picture of the company’s financial position. The proper maintenance of the books of accounts is necessary for the directors to ensure that the company’s balance sheet and profit and loss accounts are prepared in compliance with International Financial Reporting Standards (IFRS).
The books of accounts need to have a record of
- Assets and liabilities of the company
- Day-to-day entries of all sums of money received and expended
- Matters that necessitated the receipt and expenditure
As per the DIFC regulations, the books of accounts must be kept at the registered office of the company and must be open to inspection. Failing to comply with these regulations would attract hefty penalties.
Auditing Services in DIFC
The DIFC is an autonomous financial free zone in Dubai with its own independent legal framework and regulations. The DIFC has one of the most sophisticated sets of laws and the companies are required to comply with these regulations including the mandatory requirement if getting the books of accounts audited. Getting the books of accounts audited would help the companies comply with the local and international regulations thereby enhancing the company’s credibility before the stakeholders, government, lenders, and other authorities. Since it is mandatory for the companies to get their books of accounts audited by registered audited firms in DIFC, the audit services of Jitendra Chartered Accountants (JCA) comes handy for the businesses. The companies operating in the DIFC are divided into financial and regulatory by DFSA and other non-regulated companies for which JCA is registered auditors. JCA can ensure that the clients can run their business in the peace of mind by complying with all the regulations.
Documents Required by the DIFC 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:
- Memorandum of Association (MoA)
- Articles of Association (AOA)
- Latest Trade License
- Trial Balance, Balance Sheet, Profit & Loss Statement
- Registration Details for VAT and Excise Tax (If Applicable)
- Books of Accounts
- Audit schedules (Fixed Assets Register, Ageing of Accounts receivable & payable with provision for bad debts, accruals, etc.)
- Details of closing stock and work-in-progress at the year-end
- Details of fixed asset additions and disposals during the year with proper supporting
- Copies of bills and invoices