The Dubai Multi Commodities Centre (DMCC) Free Zone, located in the Jumeirah Lake Towers (JLT) offers a variety of benefits while setting up a company including different types of licenses, flexible office structures and hassle-free business set up procedures. However, it is mandatory that the businesses in the DMCC Free Zone get their books of accounts audited from registered & approved auditors with DMCC Authority.
DMCC Regulations for Company Auditing
As per the Dubai Multi Commodities Centre Authority (DMCCA) Regulations no. 1 of 2020, replacing DMCC Regulation No. 1 of 2013, DMCC has enrolled Dubai auditors in the DMCC Approved Auditors List as per the recently released Approved Auditors List Rules. The DMCC states that the approved auditor’s list will ensure the best quality audit services offered to the companies operation in the DMCC. The audit firms that have reputed chartered accountants, follow the best practices & accounting standards of local and international reporting standards such as IFRS (International Financial Reporting Standards) and international affiliations and have a track record of conducting financial audits are listed as the registered audit firms with DMCC. Using the services of registered auditors in Dubai, DMCC make sure that the Audited Financial Statements represent the true and accurate financial position of the member companies.
According to the DMCC website, the Approved Auditors List Rules also mandate that all DMCC member companies must submit their Audited Financial Statements through a DMCC Approved Auditor, which will be implemented over a transitional period. The DMCC mandates that the audited financial statements need to be submitted within 90 days after fiscal year-end.
Auditing Process in DMCC Free Zone
The DMCC Free Zone has laid out certain regulations as per which companies and company officials are required to cooperate with the DMCC approved auditors. Companies are prohibited from providing a false, misleading or deceptive statement to the auditor. Companies are not allowed to omit certain information and destroy or conceal documents from auditors.
1. Preparation of Accounts
DMCC mandates that the directors of every company operating there must obtain the preparation of accounts for each financial year of the firm. It must comply with the International Financial Reporting Standards (IFRS) and show a fair overview of the profit and loss for the given period.
Each Company must file a copy of the audited financial statements and the auditor’s report with the Registrar within five Business Days of the relevant General Meeting, providing such additional information as requested by the Registrar including DMCC summary report.
3. Copies of Accounts
DMCC mandates all shareholders of the company have the right to get a copy of the firm’s recent audited financial statements and auditor’s report. Shareholders can make a written request to the company and the company is required to comply with such a request within 5 business days.
5. Auditors' Report to the Company
The auditor’s report must state whether the company’s accounts have been properly prepared in accordance with International Financial Reporting Standards (IFRS). It must state that the accounts reflect a true and fair view of the profit or loss of the company for
the financial year. The report should give details on whether the company is undertaking only activities permitted under its license and any other matter or opinion required by DMCC authority from time to time.
2. Maintenance of accounts
Every Company must keep accounting records including underlying documents which are sufficient to show and explain its transactions so as to disclose with reasonable accuracy on the financial position of the Company at any time.
4. Appointment of Auditors
A Company can appoint a firm of auditors who must examine and report on the accounts prepared in accordance with the prescribed DMCC regulations. A Company is also allowed to appoint an auditor solely to report on its accounts and not on a general retainer basis.
As per the DMCC regulation, the company is required to appoint its auditor at a General Meeting. An auditor must be registered by DMCCA as an approved auditor pursuant to approved auditor rules published by DMCCA from time to time.
6. Auditors' Duties and Responsibilities
A company’s auditor in DMCC is required to carry out investigations to decide if the company has kept proper accounts. The DMCC approved auditor must ensure that if the accounts of the company are in agreement with the accounting records and returns and he or she must also ensure that the firm’s accounts comply with IFRS. Audit firm should ensures that AML & CFT guidelines are followed by the company while conducting the business. It is mandatory to report if the client is indulged in money laundering activities.
Why choose Jitendra Chartered Accountants?
The Dubai Multi Commodities Centre Freezone has a strict guideline regarding the auditing process of the member companies. The DMCC from time to time prepares a list of DMCC approved auditors to strictly adhere to regulations and International Financial Reporting Standards (IFRS). Jitendra Chartered Accountants is one of the leading auditing firms in Dubai, UAE that is registered with DMCC as approved auditors list.
Our expert team of auditors will analyse your DMCC Free Zone Company’s accounts and verify financial statements with the aid of supporting documents. Our DMCC approved auditors will help you identify the risk involved in the business operations. Being a leading auditing firm, we offer the services of our experienced chartered accountants to improve and add value to your company’s corporate governance practices.
Requirement from DMCC Approved Auditors to Conduct the Financial Audit
In order to carry out the audit and assurance process, the auditors may ask DMCC companies to provide the documents that correspond to the relevant period and facilitates the auditor’s job to draw an opinion on the financial position, to analysis financial statements at the year end and to comply with DMCC authority regulations.
- Bank statements
- Credit/debit confirmation slips for all financial transactions
- Copies of bills and invoices
- Statement of deposits from the DMCC portal
- Memorandum of Association (MoA)Articles of Association (AoA)
- Latest trade license
- Registration Details for VAT and excise tax