Auditing is quite a complex process, that demands immense hard work and dedication. Here we will discuss in detail about the auditing process in UAE.
Several questions arise regarding auditing in UAE and its laws and processes. Some of the most frequently asked questions are, whether it is mandatory for companies to audit the accounts? Should SME’s audit their accounts? Whether records are to be audited every year?
According to the Commercial Companies Law, Federal Law No.2 of 2015, Article 27, Chapter 2, it is mandatory for every company to maintain their records and appoint an auditor licensed under the Ministry of Economy in the UAE to audit their books of accounts.
In short, every company in the mainland of the UAE; be it small or large should audit their accounts, every year. They should also produce records of not less than five years for auditing in UAE. Whereas in the free zones, only selected companies have to maintain the accounts for audit, mainly the Free Zone Companies (FZCO) and the Free Zone Establishments (FZE).
Auditing the books of accounts every year was made mandatory for every company registered under the law in 2017, followed by the Commercial Companies Law in 2015. Auditing in UAE is necessary for the renewal of licenses as well. With the introduction of Value Added Tax (VAT), auditing in UAE has become an unavoidable process. The auditing of your accounts will help you realise the weaknesses in the accounting system and guide you to resolve the errors.
Auditing is the independent examination of financial statements of an entity to form an opinion, irrespective of its size or legal form, whether it is profit-oriented or not. The auditing procedures require the need of an auditor, who can look into your book of accounts and help you maintain it properly. It is always important to choose the right auditor for your business, and we at HLB Hamt have years of experience auditing in UAE. HLB Hamt is an auditor approved by banks in Dubai and our professionals will help you with their expertise in the field.
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