Statutory Audit Services

Statutory Audit Services in Dubai

Have you ever heard about something called a statutory audit? Well, in Dubai, just like in many other places, the government or authorities often want to check if a business's financial records are accurate. This is what they call a statutory audit. This audit investigates all the company's documents, like the bank balance, bookkeeping records, and all financial transactions.

In Dubai, where this is a common practice, statutory auditors are required to provide the government or concerned authorities with an audit report. This report helps them make sure there's been no funny business or fraudulent activity in the company. The auditor also figures out the correct profit and the taxes owed to the government. Because statutory audits are required by law, it's essential to have experts in statutory audit services in Dubai who know the rules set by the governing bodies. A statutory audit report in Dubai is critically essential to validate the legitimacy of the corporate financial activities undertaken by a firm. It proves that transactions are conducted within legal tax boundaries and explains discrepancies or non-reporting about finance.

Now, don't worry if you hear about a statutory audit for your company. It doesn't mean you did something wrong. Usually, it's done to prevent wrongdoing, like someone misusing your company's funds. Third-party statutory auditors in Dubai regularly check your records to make sure everything is in order.

In the UAE, if your company is on the mainland, it must be audited. But if it's in a free zone, the rules about auditing depend on that specific free zone's regulations.

Statutory Audit Requirements in Dubai

Before starting a statutory audit in Dubai, your company needs to have certain documents ready. Here are the required documents for a statutory audit in Dubai:

1. Information on fixed assets
2. Bank statements showing transactions
3. Details of cash receipts and payments
4. Information on secured and unsecured loans
5. Details of trade payables and receivables (both local and international)
6. Information about purchases and sales
7. Costs like selling, administrative, and inventory costs
8. Foreign exchange revenues and expenses
9. Details of statutory fees and other assessments

Our statutory auditors follow global accounting and auditing standards to provide fair and accurate audits for various stakeholders, including the government, banks, financial institutions, the public, and investors.

Who Needs a Statutory Audit?

• Mainland Companies:

Businesses operating in Mainland Dubai must have annual statutory audits in compliance with UAE's Commercial Companies Law to help in achieving compliance and transparency.

• Public Joint-Stock Companies (PJSCs):

These corporations must conduct yearly statutory audits to guarantee appropriate financial management and adherence to regulations.

• Free Zone Companies:

Companies in free zones are required to have statutory audits, but the details can differ based on the regulations of the specific free zone.

• Foreign-Owned Companies:

Even in free zones, foreign businesses in Dubai may require audits if they reach specific criteria to guarantee financial transparency.

Regulatory Framework for Statutory Audits in Dubai

In Dubai, statutory audits are regulated under UAE's Federal Decree-Law No. 47 of 2022, which details the corporate tax guidelines. The Ministry of Finance and the Federal Tax Authority (FTA) established precise criteria for auditing businesses in the country. This is an analysis of the regulatory structure.

• Legal Provisions in Corporate Tax Law: The UAE Corporate Tax Law - Federal Decree-Law No. 47 of 2022 - ensures business setups adhere to tax requirements. This law provides a base from which audits can be undertaken by defining the tax persons and the obligations regarding corporate tax payments for which audits can be conducted to establish the foundations.
• Audit Requirements by Ministry of Finance and FTA: The Ministry of Finance and FTA set down the provisions for the statutory audits to be undergone by businesses in respect of maintaining law compliance and accurate financial records. Such an audit verifies whether business concerns pay their taxes correctly and if they align with standard transparency measures

Role of External Auditors

• External auditors receive licenses from the UAE authorities for conducting audits.
• They verify financial records to be accurate and compliant.
• Auditors verify that taxes are actually calculated and paid correctly.
• It identifies and helps prevent fraudulent activities.
• Thus, their role ensures transparency in dealings between businesses and the authorities.

Benefits of a Statutory Audit in Dubai

A statutory audit is a very important process for businesses in Dubai, giving many benefits to ensure growth, compliance, and credibility. Here's why it matters:

1. Develops trust: Audits enhance your credibility with investors and customers by demonstrating your business' transparency.
2. Enhances Transparency: Providing a transparent look at your financial well-being, aiding in improved decision-making.
3. Decreases Risks: Detecting financial vulnerabilities can prevent wrongdoing and mishandling of funds.
4. Guarantees Adherence to Laws: Audits help your business follow UAE regulations, preventing penalties.
5. Unlocks Financial Opportunities: Having an audit report can enable you to obtain loans or investments.