In the UAE, the Auditors play a crucial role in assisting companies in auditing the company's financial records. They help company management, and the Board of Directors will fair and partial assessment of the process employed by various company departments. In certain Freezones, external auditors are required to carry out the financial audit every year. The auditors also face specific issues while carrying the audit process.
Below are a few of the challenges faced by the auditors in the UAE:
- Adoption of Technology
Implement on-premise or cloud-based technologies to speed up the accounting process. Adopting them might be pretty tricky for SME firms. It also includes the training process, maintenance costs and hiring professional for the same. In most cases, it is a one-time investment that plays as the foundation for the future. The adoption of the technology will benefit in the long term and significantly reduces the costs.
- Skillset requirements of the Audit Firms
Managing company accounts which are usually complex is tiresome and heavy time-consuming. Not every audit firm is equipped with the necessary equipment and workforce to meet the requirements. Without proper training, the accounting and audit process can result in many errors and discrepancies, which will affect the businesses.
Thorough knowledge and exposure of International Financial Reporting Standards (IFRS) must carry out the accounting and audit functions. IFRS is an internationally recognised standard compatible with the International Accounting model with a broad global acceptance and benefits companies and investors. It also helps in accounting reliability, improves accountability, brings transparency, improves efficiency, and further helps tax statements and returns.
- Keep Updates with the Changing Laws
Nations worldwide draft and implement new laws to retain their position as an advanced & progressive economy and remain a popular destination for international Entrepreneurs and multi atonal companies. Accounts also involve taking care of the legalities, paying taxes and dues on time without a miss. Companies that fail to understand and adapt to the changing laws can be negatively impacted. Businesses can lose money, precious time and also incur hefty fines and penalties. So, it makes very much significant to keep updated with the changing rules and regulations of the UAE.
- Compliance and Regulatory Related Issues
Adherence to regulatory compliance by the companies operating in the UAE is mandatory. The UAE law required strict adherence to the rules and regulations of the UAE law. Companies failing to comply will end up paying colossal fine and penalties. Businesses may also get their licenses cancelled for non-adherence. Auditors appointed by the company play a significant role in ensuring their clients adhere to the relevant laws of the land. The auditors must carry out financial and other tax-related returns and filings to be carried out regularly as per the mentioned timelines to avoid Government fines. The company auditor is responsible for guiding and assisting the client in executing all the regulatory-related activities in the company.
- Approved Auditors in the UAE
As UAE is home to many Freezones, the Freezones have attracted many local and foreign companies to establish themselves by taking advantage of numerous benefits. However, the Freezone companies must submit their audited financial statements to the Freezone authorities at the time of annual license renewal. The authorities accept the company financial statements only if they are audited by the Approved Auditors appointed by the Freezones.
In the UAE, to get the audit license, the individual or firm needs to complete an accounting degree or similar related qualification. The interested individual should be able to demonstrate experience in the financial or audit sector. The deserved candidate should also mandatorily pass a government exam before applying to obtain an Approved Auditor License and start working with the companies operating in the UAE.
How Can Jaxa Help?
Jaxa Chartered Accountants are one of the pioneer auditing firms in the UAE. We are also the approved auditors for most of the UAE Freezones. We serve both local and international companies from our offices across the UAE. Our expert consultants and technically trained staff assist companies with all the bookkeeping, accounting, tax and audit needs of the client companies in the UAE. Please Contact Us for your queries regarding tax and audit-related matters. We'd be delighted to help you!