Accounting Standards in UAE
If you are doing business in the UAE, you have to adopt International Financial Reporting Standards (IFRS). No matter where your company is registered – in NASDAQ Dubai (formerly known as DIFX), Dubai Financial Market (DFM), or Abu Dhabi Securities Exchange (ADX), you are required to manage the accounting records of your company in accord with IFRS. IFRS Standards bring transparency by heightening the international comparability and quality of financial information, enabling investors and other market participants to make informed economic decisions. The standards render information that is necessitated to hold management to account.
Financial Statements Audit: Importance
Your financial statements do the talking for you! They reveal a lot about your company’s financial condition including your borrowing capacity to the bank or vendors you are heading to for loans or business expansion. They sure need a third eye to cut an appealing figure in the market. Therefore, you can’t afford even a single error in those. You’ve got to be very mindful about who audits them.
Audit plays the first fiddle in any company when it comes to keeping track of its financial transactions. It helps you enhance communication along with internal control & operations, bring down cost of capital, elevate compliance and reporting, take crucial decisions and most importantly appeal to third parties. After registering a company in the UAE, it’s mandatory to file annual financial statements accompanied and attested with an auditor’s report as per the UAE Federal Law on Commercial Companies. Your professionally audited financial statements solve multiple purposes such as stakeholder reporting, financial statement analysis, statutory reporting, bank financing, and trade license renewals. You as a business owner have to make sure that they are available and comply with IFRS standards. Effective planning is all you need to achieve a quality audit. The process involves three phases – Planning & Risk Management, Internal Controls Testing and Substantive Testing. Engage an experienced external auditor, conform to document requests, supply financial statements generated as per the IFRS standards, and voilà! A quality audit done by an expert third-party professional specialising in the field multiplies the value and credibility of the financial statements produced by management, thus boosting user confidence in the financial statement.
Companies That Have to Undergo Financial Statement Audit
Public companies are obligated by law to ensure that their financial statements are audited by a registered CPA. The independent audit aims to ensure that the management has provided financial statements that are free from material error. Small companies can go for an audit when required by any financial institution, supervisory unit, or to meet certain conditions. However, Limited Liability companies (LLCs), Partnerships or Affiliations limited by shares, Joint-stock companies and every other business mandated by law should conduct an audit at any time of the financial year in the UAE.
Purpose of Financial Statement Audit
There are various objectives behind conducting financial statements audits. Some of them are:
- To attest the financial standing of the company
- To identify critical areas of concern in advance so as to take corrective measures on time
- To discover any discrepancies, potential risks or fraudulent activities in the records
- To evaluate the business’s ability to continue as a going concern to generate profits and revenues.
- To figure out the areas and ways of improvement in the business processes
- To attract investments or enhance funding options
Preparation of Annual Financial Statements in Dubai
Preparation of true and fair financial statements in the UAE has been expressly identified as one of the responsibilities of the directors of companies in the corporate law of several countries such as UAE Commercial Companies Law (CCL). Free zone businesses in the UAE must prepare their annual financial statements based on IFRS. Even though most companies limited by shares are free to prepare financial statements as per the normally expected structure, most of them prepare it based on IFRS. Subsidiary corporations registered in other places can produce their financial statements following their holding companies.
A financial statement is a formal record of the financial activities of a business. When we say we do financial statements audit we refer to a bundle of various types of documents including income statement, balance sheet, statement of cash flows, statement of financial position, profit & loss report, statement of change in equity and the financial statement notes (or disclosures). Our focus is always on delivering quality work while maintaining integrity and compliance with the audit standards. Speed, transparency and accuracy are our core values that make us stand apart. While working with us you don’t have to worry about confidentiality, fidelity and deadlines of your reports.
Adam Global: Your Financial Statements Auditor in Dubai, UAE
Looking for a pro financial statement auditor in Dubai? Adam Global fits the bill like no other auditors in the UAE. A go-to business set-up advisory firm for most aspiring and seasoned business persons in Dubai, Adam Global (AG) is known for providing quality services in all aspects of a business, from business inception to business expansion and everything in between. At AG, we understand the importance of establishing and fostering trust with ownership and other key stakeholders for businesses in Dubai. That’s why we are pleased to provide them with a high-quality financial statements audit service in Dubai that helps them present a “true and fair” view of their company’s financial performance and position. The qualified auditors at Adam Global can audit or review your financial statements and corresponding disclosures, furnishing an independent conclusion they are not materially misstated and assurance they meet financial reporting requirements to help your organization grow upward and onward. Whether you’re seeking investors for your business or looking to apply for credit, you can rely on our extraordinary service providers for all four types of financial statements-
- Statement of financial position (balance sheet),
- Statement of comprehensive income (income statement/ P&L statement),
- Cash flow statement,
- Statements of shareholders’ equity.
If you would like to benefit from complete accounting services for your business in Dubai, you should solicit the support of our business consultancy firm in Dubai.
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