An Essential Guide to the Documents Required for a Successful Audit in Dubai
Before an audit process, businesses need to properly organise their documents in compliance with accepted standards. As a business owner, you are required to answer the questions posed by the auditors in Dubai during the annual audit. You need to present the auditor with documents such as trial balance, VAT Return Filings, Important General Ledger, Important business contract, legal documents ( trade license copies and MoA), fixed assets schedule with the calculation of the depreciation, schedule of payables and accrued expenditures, List of advances and prepayments and list of the customers, list of the suppliers and bank reconciliations etc. The papers should be prepared appropriately to make the process easier for you as well as the auditor.
We share with you a guide on the key documents you should prepare for the annual audits in Dubai, UAE:
1. Reports on the Payroll
For a company operating in the UAE, it is important to ensure that the payroll records are accurate and prepared in compliance with the standards. The payroll report helps the auditor in testing the wage expense. An auditor may verify whether all the active employees are receiving the correct pay rates or not as per their labour contract. By analysing the Payroll reports, the auditor understands the current situation of the organisation and may provide recommendations.
2. List of All the Bank Accounts
You should be prepared with the listing of all bank accounts that include the bank name, account number and authorised signers and the auditor will also require independent bank balance confirmation from the bank itself. The auditor will confirm the bank balance as of the balance sheet date. The documents associated with each of the accounts need to be presented to the auditor at the time of the audit. A consultation with experienced audit firms in Dubai will be helpful for your company in easing the process.
3. Copies of Legal Documents
All the documents related to the incorporation of the company must be readily available during the process of audit in Dubai, UAE. The Memorandum of Association (MoA), Articles of Association (AoA) and the company by-laws should be in your checklist while preparing for the audit. You would be required to disclose details including the number of shares authorised, issued or pending. The articles of incorporation would help you in disclosing some parts of this information to the auditor. If by-laws have any vital information, it should also be disclosed to the auditor. You will also need to share with the auditor your trade license, Tax Registration Number (TRN), share certificates and certificate of incorporation. Moreover, the auditors will also ask for the Real Beneficiary Register (RBR) and Partners or Shareholders Register (PSR) which are mandated by Cabinet Resolution No. (58) of 2020 and the copy of the Economic Substance Notification and Report (if applicable).
4. Board Meeting Minutes
At the time of the audit, the auditor will go through the minutes of all board of director meetings. The minutes contain information pertaining to the financial statements that necessitate the requirement and now the same is also the compulsion from the Economic Substance Regulations to the companies carrying out relevant activities. At the end of the audit, you will need to state in a representation letter that you have provided the auditor with all the minutes. This means you need to gather all your minutes well in advance. You need to present Board minutes for all years under the audit and through the current date.
5. List and Evidence of all the Transactions
During the audit, you should mention all the transactions that happened in your company in a particular period. It should be backed by all the invoices and bills of the purchases made. Auditors in Dubai will be using the invoices to determine the total spending of the company on a particular period. The auditor also needs to check whether the amount is in sync with the amount given in the books of accounts.
6. The General Ledger
In terms of accounting & bookkeeping, a general ledger is an essential document that contains details of all the transactions your company has undertaken during a specific duration of time. Since most companies nowadays use software such as QuickBooks, it is easy to export the general ledger to Excel or send a backup copy of the QuickBooks to auditors in Dubai. By checking General Ledger, the auditor can have a clear grasp over the volume of activity they are bound to audit.
7. Trial Balance of the Company
Auditors always love to check your trial balance as all the numbers in your company’s financial statements can be traced back to the trial balance. The trial balance also comes from the accounting software. Some auditors in Dubai may prefer to receive the trial balance in Excel as it is easy for them to copy it directly to the trial balance segment of their software. It all depends on the working style of the auditor you are working with. Check with your preferred audit firms in Dubai to prepare in advance for the audit.
8. Copies of Loans, Leases and Material Contracts
As per the accepted accounting standards, you are required to disclose to the auditor details of loans, leases and in some instances, material contracts. Submit copies of all such documents to the auditor so that he can ensure the disclosures are complete and accurate. Material contracts may include long-term agreements with suppliers, customers etc.
9. Loan Statements
Every company will be involved with some kind of debts, and some of them would be bad debts. An auditor verifies the loan statements to confirm all the debts with the creditors. The process of confirmation turns smooth if you provide your company’s current loan statement to the auditor. Hiring the assistance of approved audit firms in Dubai would make the audit a hassle-free process for your company.
10. VAT Returns
Every VAT registrant should file a VAT Return to the Federal Tax Authority (FTA) at the end of each Tax period. Article 64 of the Executive Regulations of VAT Decree-Law states that the FTA should receive the VAT Return no longer than the 28th day following the end of the Tax Period. During the audit, an auditor will check your VAT Return filings and will also match the revenue with the submitted VAT Returns, and therefore you must be organised in regards to the documents. Your trusted audit firm in Dubai will provide you guidance on how to get your Returns organised for the audit.
11. Anti Money-Laundering Check by Auditor
An auditor has to test whether your company has adequate Anti-Money Laundering (AML) program. During the audit, your company’s AML program manual will be reviewed. The auditor will also test the organization’s AML policy and procedures.
Prepare for Audit with Jitendra Chartered Accountants
Annual audits are a hectic process for businesses as they are required to ensure full compliance with the accounting standards. If you are looking for an audit firm in Dubai that would take care of all your audit-related requirements, availing of the services of Jitendra Chartered Accountants (JCA) is the best available option for you. JCA provides you with customised solutions that are tailor-made for your company’s requirements. JCA has a team of highly qualified auditors who are approved by the UAE government as well as most of the Free Zones including DAFZA, JAFZA, DMCC etc. Apart from the audit, we take care of all your accounting, VAT and Economic Substance (ESR) requirements. JCA lets your company stay at the top of the game with our unparalleled audit services in Dubai.