Compliance audit or in other words the comprehensive review of a company by an external and independent group who are authorized by the law. This activity is carried out in accordance with the regulations. External reviews of financial books of the company are formal consistence reviews that are done by autonomous external auditors and follow a particular configuration that is resolved dependent on the consistence guideline being evaluated. Compliance Audit measure if any company is consenting to state, government or corporate guidelines, rules and norms.
The report that is being generated by the external auditor is utilized by the managers and also presented to the stake holders of the company. Sometimes the external auditor use the internal audit reports to examine and evaluate the compliance and regulatory measures that the company is taking.
Audit Compliance and UAE Law
The Commercial Company Audit Laws and Regulations is the law for all those companies who in the jurisdiction of UAE. This law mandate the all the registered companies in the UAE to do a comprehensive review of their financial books once in a year. It also mandate the companies to have one or more authorized auditing firms in UAE, which will act as external auditor of the company. The selection of external auditor shall be done by the general assembly of a partnering firms, as well as this provision is also for private and public limited companies.
The scope of audit compliance services in Dubai and all over UAE is consist of but not limited to, is as follow
- Making of compliance framework
- Review the current policies and SOPs of internal control system
- Making new policies for compliance, roles definitions and assigning responsibilities to the team
- Providing consultation in defining the requirements for compliance, in accordance with the local and international laws, rule and regulations and internal policies.
- Consultation in interpreting the regulatory requirement.
- Reviewing and maintaining the compliance requirements and management
- Consultation in post-compliance review
In case of non-compliance the business will be exposed to certain risks, which will eventually doom the business. In the UAE, the law is very strict in terms of money laundering and financial compliance regulations. The non-compliance with the UAE regulations regarding the anti-money laundering and financial compliance regulations, may lead to ban the business. These laws are compulsory for every business or company to follow, which is not limited to the size, scope or industry of the business. Any type of non-compliance may lead to the cancellation of the license of the company and a strict judiciary actions shall be taken.
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Economy and Auditing Firms in UAE
The economy of UAE performed surprisingly well in 2020 in spite of the current worldwide anomalies in the world economy, achieved by the COVID-19 pandemic, according to Abdulla Bin Touq Al Marri, finance minister of UAE, following the issuance of the fundamental aftereffects of the display of country’s financial illustration by the Federal Competitiveness and Statistics Center. The good results are because of schematic and well equipped proactive approach towards the crises. Due to these proactive policies the country has left off itself from the crises very quickly. In the Pandemic, the countries that involved in oil businesses, were hit firmly and the most disastrous industry was oil industry. In spite of these set back and dis equilibriums in the economy the UAE has left off itself and set its economy back on tracks. The starter aftereffects of the UAE’s economy for 2020 uncovered that the country’s macroeconomic markers had seen a somewhat restricted decrease in the GDP and in the non-oil GDP last year by 6.1 percent and 6.2 percent, individually, at consistent (genuine) costs contrasted with 2019. Similarly the liberalization of UAE economy, multinational companies are settling in UAE, which also gave rise to the number of consultancy and auditing firms in the UAE.
Audit Firms in Dubai
According to Gulfnews.com last year Dubai has witnessed 12.5% increase in the registration of new companies which brought the total number of registered companies to 106,000. In this case all these companies will be required to do compliance audit in accordance with the law, which will eventually give boost to the Audit compliance services in Dubai.
Audit Complaince Services in Dubai
Audit Compliance Services in Dubia, which is an imporatant part of Internal auditing. It assure the Governance and Compliance of an organization. Compliance refers to the adherence of an organization with local laws, regulations, policies, procedures, and Standards. Governance refers to the way an organization is managed at the strategic level. According to Clutch.co, there are 97 authorized auditing firms who are providing audit compliance services in Dubai in accordance with the international standards. This website has ranked all those 97 firms who are providing audit compliance services in Dubai, in which Intuit Management Consultancy (IMC) Group top the list based on its wide range of services and quality. The list of auditing firms in Dubai provided by Clutch.co is based on the reviews of their previous clients who have availed their services. The fee of auditing firms in Dubai, is most commonly based on their range of services. Dubai is one of the high potential city in the world in terms of business so every company who are extending their services to the Dubai will invest their funds aggressively in order to earn more profits. Similarly, the auditing firms in Dubai, will charge more to their clients. In common practices auditing firms charge high for audit compliance. Likewise, it will cost audit compliance services in Dubai are high as well.
Audit firms in Abu Dhabi
Abu Dhabi in comparison to Dubai is more of traditional and less crowded, in term of business and population. The cost of living is also less than Dubai, which is currently motivating the businesses to move Abu Dhabi. The business environment of Abu Dhabi is very flexible for investors’ point of view, it has five free zones which provide incentive and tax exemptions to the investors. However, the businesses are not exempted from the audit compliance, which is mandatory for a business to do the external review of financial books of the business through audit firms in Abu Dhabi. Since the businesses are rising in Abu Dhabi, the demand for audit firms in Abu Dhabi is also increasing.
Audit Firms in Sharjah
On other hand Sharjah is also in stage of growth in terms of businesses. The regulatory requirement for public and private companies are different but the demand for audit firms in Sharjah is increasing, which is due to demand of transparency of stakeholders from the companies. The number is audit firms in Sharjah is few, as Sharjah is adjacent to Dubai and most of the audit firms in Dubai are hired by the companies of the other cities as well. In Sharjah or any other city of UAE, law remains the same, as well as the requirements of the law. However, the nature of business and stakeholder is very important to understand. In Dubai most of the businesses are multinational because of its western touch, so in Dubai the stake holders of the businesses, in which most of them are foreigners, will demand the audit compliance according to the international standards from audit firms in Dubai. On the hand Sharjah is adjacent to Dubai and is mostly dependent on the business environment of Dubai. The situation for business in Sharjah will be almost the same as Dubai. Most of the companies in Sharjah hire the audit firms in Dubai, as it the central hub.
Situation of Auditing firms in Dubai, Sharjah and Abu Dhabi
The situation for Abu Dhabi is changed from these two cities of UAE, as Abu Dhabi is more of traditional city. Abu Dhabi is oil rich city and most of the businesses are involved in oil marketing or oil explorations. The majority of investors in Abu Dhabi are the residents and are owning large businesses. These businesses are involved in audit compliance because of the regulatory requirement by the law. Most of the companies are owned by the families in Abu Dhabi, the audit compliance is only the requirement by the government of UAE, as shareholders of the business are few in numbers and are native of UAE. The financial and audit services industry in Abu Dhabi is in the early stages, as international investors are more settled in Dubai than Abu Dhabi. However, the UAE government has announced five free zones in Abu Dhabi, the international businesses and multi-national companies are moving towards Abu Dhabi, which also hint the potential of audit and financial services industry in Abu Dhabi. The audit firms in Dubai are opening their branches all over the UAE, as their head or regional offices are based in Dubai.
VAT Services in Dubai
These audit firms in Dubai and all over the UAE, are providing other services such as Value added Tax (VAT) services. VAT is a form of indirect tax which is received by VAT-registered businesses, however the tax is being imposed on the end consumer. The government of UAE charge 5 per cent of taxable supply of goods. Some of the goods are exempted from VAT and this tax is paid under certain conditions. The businesses do not fully understand to manage the VAT, for managing it the businesses hire consultants to handle such issues. VAT services in Dubai are most commonly provided by the established audit firms in Dubai.