Accounting and Auditing Service in UAE: An Overview Accounting and Auditing of the financial records help all companies, be it early-age start-ups or established companies, in the UAE to take crucial business decisions. Accounting is a process of how a company’s finances are recorded. The job of an accountant in a company is to properly record and inspect all the financial transactions of the company, offer recommendations taking into account the financial situation of the company and further offer guidance to the company to make wise financial decisions. On the other hand, auditing is a process where the auditor evaluates and ascertains the company’s financial, operating and business goals. Regulatory and Statuary requirements in UAE (in accounting and auditing) According to Section 27 of the United Arab Emirates (UAE) Federal Law Number 2 of 2015 regarding the Commercial Companies Law (hereinafter referred to as Companies Law), it is compulsory for every Joint Stock Company (JSC) and every Limited Liability Company (LLC) to appoint one or more auditors to get their accounts audited every fiscal year. Further, the law also makes it compulsory for every company to maintain the accounting books of the business at the head office of the company for at least a period of 5 years from the end of the financial year of the company. Federal law also allows sole proprietorships to appoint an auditor. The companies that are registered according to the law in the UAE are required to adhere to the International Financial Reporting Standards (IFRS) and Practice and Generally Accepted Accounting Principles (GAAP) while preparing the accounts and financial documents for the company and providing a clear view of the company’s profits and losses. The shareholders and partners of the company have been permitted by law to obtain a copy of the last audited accounts, audit reports, and statements of the holding company or subsidiary company. Section 94 of the Companies law further provides the agenda of the annual general assembly where the quorum gets to discuss the auditor’s report, the financial statements and the remuneration of the auditor. It is incumbent on the companies to follow the regulations provided under the Companies Law while appointing auditors for the company. Importance of Auditing and Accounting Services for a UAE Company Enterslice comprises a team of accountancy experts offering account management services in the UAE to assist business managers in managing their businesses. Accounting is the backbone of every business. If the accounting of an organisation is robust and sound, the accounting transactions are recorded accurately, which in turn helps the management take the right business decisions. Majorly accounting is done in two broad areas, viz. management accounting which helps in running your business and financial accounting, which tells you how to run the business. Accounting Services Provided for UAE Companies Monthly Bookkeeping Services - The major costs of running any business include the overheads and the cost of the operations. Enterslice offers firms and businesses in the UAE a win-win situation in the form of Accounting and Bookkeeping services on a monthly basis. We maintain the books of accounts of our clients and present them with the relevant information for taking timely business decisions. By availing of our accounting and bookkeeping services, businesses can save overheads such as salaries, travel costs, medical insurance etc. The best part of our services is that businesses get to avail the services of professionally qualified accountants remotely, which otherwise is a costly affair, especially for small and medium-sized businesses. Backlog Accounting - Most business managers are so involved in the development of business development that accounting and bookkeeping take a backseat and keep on piling for months and months and even years. Enterslice offers its clients handling their accounting backlog. We are experts in working parallel, recording your business transactions and simultaneously clearing your accounting backlog. Cloud Accounting Services - As accounting is becoming more and more complex, small and medium-sized businesses prefer to use online accounting and record-keeping software. Enterslice offers the services of integrating these cloud accounting and record-keeping software into the businesses of our clients so that business information can be accessed by the business anytime and anywhere in the world. Payroll and WPSprocessing- Not just overhead-oriented business transactions, but payroll and Wage Processing System (WPS) processing is also a money and time-consuming activity for every business on a monthly basis. The payroll and WPS processing is an important statutory processing activity that is supposed to be concluded every month. Enterslice provides professional services in sparing organisations valuable time, which can be used in business development tasks. ERP Solutions- In order to maintain accuracy, efficiency and reliability in an organisation, it is highly important to have accounting software. Every business operating in the UAE should implement ERP software (Employee resource planning software) with a view to protecting the financial information of the business in a robust central warehouse. Having ERP software ensures the availability and timely delivery of important financial information in an accurate and required format. It also maintains control over business information. The business information is kept confidential for the security and sustainability of the business. Importance of Auditing Services for a UAE Company Following is the importance of Auditing Services for a Company registered in UAE: Auditing ensures that the company complies with the principles of the company and conforms to the statutory and regulatory requirements of the prevailing legal framework governing the companies. Auditing helps in evaluating the financial matters of a company and ensures that accurate financial statements of the company are prepared. Helps in examining the financial accounts and comparing the charges with the vouchers, and verifying the balance sheet before stating the results. Helps in planning and budgeting for the company. It informs the management about the costs and their allocations. It helps in the preparation of budgets for the future development of the business. Helps in increasing the credibility of the financials of the company, thereby increasing the chances of raising investments for the company. It helps in the detection of errors and fraud through a critical examination of fraudulent activities. Time taken for the audit of a UAE Company The time taken for the completion of the audit of a UAE company varies from 6-18 months in the case of new entities and 12-15 months in the case of the entities that are established in the Free Zones. This timeline is usually meant for an external audit done annually. In case a company wants to carry out a special purpose audit, it can be carried out for different periods or may take a number of years. Auditing Procedure for a UAE Company Audit Planning - This step of audit planning involves the amount of audit needed for the organisation, an understanding of the business operations of the organisation, activities undertaken by the organisation, an assessment of the risks involved in the preparation of the financial statements and evaluating the time involved in carrying out the audit of the organisation. Conducting financial audit tests - In the next stage, the auditor conducts a number of financial audit tests with a view to understanding the activities of the organisation, reviewing the invoices that are associated with the expenses of the entity and obtaining clarity on whether the expenses have been properly classified and that the vendor actually exists or not. Conducting account analysis- Another process undertaken during the audit process is the account analysis by the auditor. It involves checking the details of the account and whether they are prepared in accordance with the information mentioned in the documents. It also examines the documentation of the reasons behind the changes in the accounts since the last time the audit was conducted. It also requires research and information gathering to justify those changes. Preparation of the audit report- The final step in the audit process is giving an opinion about the financial and operational well-being of the organisation in the form of an audit report. It specifies the information about the organisation, the tests employed, the details of the financial statements, and weaknesses in the internal controls of the organisation. Thereafter, the report is finally submitted to the higher authorities. Types of Auditing Services for UAE Companies Internal Audit - The Internal audit of businesses in the UAE is carried out by certified Internal Auditors having in-depth knowledge of internal controls, processes and systems. It is conducted with the objective of identifying any weakness in the internal controls, bolstering operational efficiency and ensuring regulatory compliance. It ensures that the company’s financials and internal controls are intact and the company is on the right path to improving risk management and conforms to International and local guidelines. Tax Audit- According to the applicable provisions laid down under the Federal Decree Law No. 7, a tax audit is undertaken by the Federal Tax Authority to evaluate the financial records or related information and data of the taxable persons doing business in the UAE. This FTA conducts the tax audit on the tax persons to ensure that the tax person is in complete compliance with the UAE VAT and related tax laws and procedures. The purpose of conducting this tax audit by the FTA is to ensure that the taxable person has paid all its tax liability in full and every tax is collected and paid by the company to the government within the given time frame. The tax agents that are registered with the Federal Tax Authority offer pre-audit and post-audit support to the companies. Therefore, it is advised that companies should always approach FTA-registered tax agents. Compliance Audit - A compliance audit is conducted with the objective of finding out that a particular company’s policies and procedures are in compliance with the prevailing global internal and regulatory standards. The compliance audit is usually carried out in regulated industries and educational institutions. Financial Audit- A Financial audit is conducted to evaluate the appropriateness of the information recorded in the financial accounts of the company. This type of audit is undertaken by a Certified Public Accountant (CPA), and such an audit is independent of the kind of commercial activities undertaken by the business. A financial audit comprises of examination of the books of accounts and related financial records of the company. The information drawn from these sources allows the auditor to form his opinion, and the audit report is prepared on the basis of this opinion. In the audit report, the auditor gives its opinion with respect to the appropriateness of the financial records maintained by the company and prepared in compliance with the applicable statutory and auditing standards. The primary objective of conducting a financial objective is to provide an independent, third-party opinion about the financial hygiene of the company and whether the financial records maintained by the company depict true and accurate information about the company’s financial performance. Construction Audit - Constructions audits are usually carried out for the examination of the costs incurred by a company for a specific construction project to confirm that the costs incurred in the construction of the project are rational and not over the top. Here, the contracts granted to the builders, overhead costs, labour and material costs, change orders and appropriateness of completion are scrutinised in the process. Information systems Audit - In the information systems audit, the auditor reviews the control over the software development, access to the computer systems and processing of data. The objective of the information systems audit is to provide accurate information to the users as well as ensure that unauthorised parties do not have access to the data. Operational Audit - An Operational audit is the detailed analysis of the goals, planning processes, operational procedures and the result of the operations of the business. Investigative Audit - The aim of the investigative audit is to identify and remedy the control breaches, collect evidence if charges are to be brought against someone etc. Enterslice is a global Consulting firm offering auditing and accounting services across the globe. It is advised the professionals be always ready for the audit by hiring tax agents to conduct pre-tax auditing.