Overview of Accounting and Auditing in Sharjah

Sharjah is a thriving and economically advanced emirate in the United Arab Emirates (UAE), where accounting and auditing play crucial roles in the financial landscape. The applicable regulations and laws of the UAE, in particular, Federal Law No. 2 of 2015 regulating Commercial Companies and its following amendments, govern accounting and auditing procedures in Sharjah. The International Financial Reporting Standards (IFRS) serve as the foundation for the majority of UAE accounting standards, guaranteeing uniformity and transparency in financial reporting. To foster investor trust and attract international investment, Sharjah places a high priority on financial transparency and corporate governance.

Accounting standards in Sharjah

Financial transactions and events should be recorded, reported, and presented in financial statements in accordance with a set of rules and principles called accounting standards. These guidelines offer a foundation to ensure sure that financial reporting is consistent, equivalent, and transparent. 

Sharjah adheres to the IFRS's guiding principles and regulations for financial reporting. Companies must yearly compile and present their financial statements, which include the cash flow statement, statement of changes in equity, statement of financial position (balance sheet), and income statement. Relevant information is provided by these financial statements to relevant parties, including investors, creditors, and regulatory bodies.

Businesses listed on the Abu Dhabi Securities Exchange (ADX), Dubai Financial Market (DFM), or NASDAQ Dubai (previously known as DIFX) is required to follow the International Financial Reporting Standards (IFRS) prescribed by the UAE Central Bank, per the Securities and Commodities Authority (SCA). As a result, these businesses are required to keep their financial records in line with IFRS. As it enables businesses to keep track of their spending and guarantee effective financial management, bookkeeping is a crucial component of operating any kind of organization.

Benefits of Accounting Standards

Accounting standards provide a number of advantages to companies, investors, and the whole economy. These consist of:

1. Enhancing comparability and transparency: Accounting standards encourage uniform financial reporting, enabling accurate comparisons across various businesses and assisting in well-informed decision-making.
2. Standardized financial statements improve the trustworthiness and integrity of information, making it simpler for companies to draw in investments and access capital markets.
3. Increasing investor protection: Accounting standards ensure that financial information is provided in accordance with generally accepted principles and present an accurate and fair picture of the entity's financial status, protecting investors' interests.
4. Compliance: Compliance with accounting standards streamlines regulatory compliance since organizations may depend on pre-existing standards rather than creating their reporting structures.

Auditing Standards in Sharjah

In Sharjah, only businesses operating on the mainland are subject to the mandatory auditing requirement; businesses operating inside free zone authorities may or may not be required to undergo an audit, depending on the laws and regulations issued by the relevant authorities. The Commercial Companies Federal Law No. 32 of 2021, Chapter 2, Article 27, mandates that all mainland businesses undergo financial account audits. Furthermore, these businesses must keep their financial records for at least five years.

Types of Audits

• Internal Audit: Internal audit is an unbiased, independent assessment of the governance, risk management, and internal controls of a company. Internal auditors are a committed group of specialists that carry out this task for the company. Internal audit's main goal is to provide management and the board of directors confidence in the accuracy and efficacy of operations, the dependability of financial reporting, and legal and regulatory compliance. Internal auditors evaluate the effectiveness of the internal control systems, point areas that need development, and offer suggestions for boosting organizational performance and reducing risks.
• External Audit: External auditors offer an unbiased evaluation of the financial accounts since they are independent of the organization they are auditing. They assess the company's internal controls, check for the accuracy of the financial records, and ensure that the financial statements are in accordance with the applicable accounting rules.
• Statutory Audit: A statutory audit is an external examination of a company's financial records and statements required by law. It is carried out to make sure that the company's financial information is reliable and precise and is mandated by law or regulation. Statutory audits are normally carried out annually and are primarily concerned with determining if statutory obligations, such as tax laws and corporate law provisions, are being complied with.
• Forensic Audit: In order to find probable fraud, misconduct, or unlawful acts within an organization, a forensic audit is a specialized sort of audit that involves the inspection and analysis of financial data and transactions. To identify and record fraudulent acts, forensic auditors are trained to use investigative strategies and forensic accounting procedures.

Services offered by Enterslice

Enterslice offers the following services in Sharjah:

• Bookkeeping Services: bookkeeping services provided by Enterslice include the upkeep of exact accounting records such as cash books, general ledgers, fixed asset registers, and sub-ledgers for accounts receivable and payable.
• Management Services: The business helps to put together management reports, such as periodic accounts, cash flow statements, budgets, and forecasts that are suited to management's informational needs.
• Financial Report Services: Enterslice assists with the creation of yearly statutory financial reports, ensures regulatory compliance, and speeds up filing procedures. Additionally, they serve as a point of contact between the business and outside auditors while reviewing financial data, providing a quick and effective audit process.
• Treasury Services: Enterslice provides treasury services to clients to improve overall financial management efficiency and speed up payment processing.

In addition to the aforementioned, Enterslice further offers the following services:

• Examination of cost claims and payment requests takes into account accounting, tax, and control rules and optimizes financial processes. 
• Internal accountants might receive training to improve their knowledge and abilities.
• Establishing accounting standards and control processes for the client's accounting division.
• On a contract or freelance basis, skilled managers and accountants are provided.
• Making recommendations for improvement and evaluating the adequacy of accounts.

Every client's specific demands are taken into account when offering reliable and efficient accounting services by Enterslice. To support clients' operational success, our team of experts strives to deliver accurate financial reporting, regulatory compliance, and informed decision-making.