UAE is known as the Gateway to the Middle East and Africa. The geographical location and the stability it offers in the volatile Middle East region, along with a business-friendly ecosystem, has made UAE one of the top business locations worldwide. As businesses from around the world exposed to different cultures establish regional headquarters in the UAE, they are governed based on the universally accepted trade and legal system. The Government of the UAE and member Emirates are successful in upholding the international standards and regulations.
Who can Perform a Statutory Audit?
A Statutory Audit is a type of audit that requires examining the accuracy of the different financial statements, accounts and records of a business or a government body. A statutory audit is undertaken to determine whether an organisation delivers a fair and accurate view of its financial position by evaluating all the relevant information, such as loans, bank account balances, financial transactions, and accounting records.
The statutory audit is required by a statute of the organisation or in a Government body in many cases, making it mandatory for the organisation to carry out the audit.
The laws may be passed by different Government bodies which financial transparency and fairness to ensure compliance. In any organisation, a regulation also pertains to any company management or board of directors of the organisation.
The statutory audit in the UAE assures the general society and business ecosystem by encouraging financial transparency and accountability. It increases the trust by ensuring that businesses present exact and correct financial data to the Government and thereby to the general population. The statutory audit examines financial data, such as bank balances, loans and related economic exchanges.
Stakeholders in a Statutory Audit
The different stakeholders of the Statutory Audit are:
- Company Management/ Board of Directors
- Company Shareholders
- Government Agencies
- Company Department/ Employees
- Statutory Auditor
Let us know more about the role of the Statutory auditor.
Role of a Statutory Auditor
The Statutory auditor is an Independent auditor certified by the Government to carry out Statutory audits in an organisation. The statutory auditor cannot be a related company auditor on the payroll of the company. The company owners generally appoint the Statutory auditor, or in the case of a public limited company, the statutory auditor is appointed by shareholders by a majority vote. In some instances, the Government can also select the Statutory Auditor.
The statutory auditors are appointed through the General Meeting of Shareholders for 3 to 5 years.
The statutory auditor can be a qualified individual or a firm certified to conduct an audit. The Statutory audit process includes examining – whether the company operating atmosphere is under the required industrial standards and policies; check all the process controls deployed and procedures employed to deal with any irregularities based on the observations of previous audits; check and validate different financial documents to detect any fraud and provide advice for better regulation. At the end of the audit process, the statutory auditor prepares and submits an audit report to the company’s shareholders.
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