Auditing is the analysis of the financial statement of an organization by an external audit which is necessary for any business being held in DMCC. All DMCC companies must have their annual financial accounts audited by a DMCC approved auditor and should be submitted to the DMCC officials.
While doing the audit, the following points should be kept in mind:
• The auditor should be unprejudiced.
• The auditor or the auditing firm must not have any stake in the company.
• To ensure an accurate investigation, the auditors must have company-wide independence.
• To perform the required work, the auditors must be qualified and approved.
Auditors in DMCC analyze the effectiveness of a company’s internal controls; promote the best practices, and guarantee that standards, rules, and regulations are being followed. External auditing assists the DMCC free zone company in identifying possible incompetence, wrongdoings, and waste, as well as providing actual insight and reviewing IT, technology, systems, and procedures.
The DMCC company guidance clauses (62) and (64) states that:
• All companies under the DMCC must appoint an approved auditor to conduct impartial auditing.
• The auditors must prepare an audit report of the annual accounts and give a presentation to the shareholders.
• Within three months of the year’s end, the DMCC Company must produce audited financial accounts.
• Failure to comply with DMCC company laws may result in a fine.
Elevate is a firm that provides accounting and auditing services in Dubai. Our team of professionals handles the audit requirements with the best resources available for auditing services. The extensive knowledge of our team is the strength of our firm which helps us to keep moving forward.
You will be availing the following benefits by hiring us an external auditor –
• Internal control and business structure will strengthen.
• Best practices and procedures will be implemented.
• Comply with all applicable laws and regulations.
• Enhance operating efficiency.
• Recognize and reduce tasks that do not offer value.
Auditors in DMCC ensure that the Audit report is just and unbiased. The auditor must not have any personal affiliation with the company they are auditing for.
For conducting auditing successfully the auditor goes through the following process –
• Emerging the Audit plan – The foremost step to get started with the auditing procedure is to develop plans and a set of strategies that will help in determining the need for auditing for the firm. For making the plan the auditors will collect the company’s documents and do a thorough analysis of them. According to that a plan of action is drafted.
• Reading the client – Auditors gain knowledge and background information about DMCC companies in order to determine the risk of financial statement deception, evaluate procedures, conduct observations, and then decide on the scope, timing, and nature of additional auditing services accordingly.
• Risk supervision- In this stage, the auditors in DMCC determine the risk factor misstatement in the financial statements of the DMCC Company. This information is used to know the level of transaction account balances and discourse that is potentially misstated.
• Executing test of control – The approved auditor in DMCC ensures that all the essential controls are developed, maintained, and implemented effectively. Also during this step will assure that all the transactions, receipts, and invoices have been recorded accurately.
• Fulfillment of audit – A final decision regarding the financial statement disclosure is made after the detailed assessment done by the auditor of the accounting and auditing services provider in DMCC. Moreover, a meeting is arranged with the senior management to discuss the findings.
• Preparation of Audit report – Lastly a standard audit report is prepared by the approved auditor in DMCC which shows all the necessary details about the financial strengths and weaknesses, system, and business processes.
The auditor chosen by a DMCC business must be a DMCC approved auditor who has been approved by the free zone’s management. A company in the free zone cannot be audited by any other regular auditor. If a firm hires an auditor who is not a DMCC approved auditor, the audit will be viewed as invalid and ineffective, and the company will be subject to fines and other penalties.
If you need help with your business in the Dubai Multi Commodity Centre (DMCC), you may enlist the help of the specialists at Elevate first accounting and auditing.