Auditing is the most important thing a company should do. It is important to know whether the business is doing well or struggling. Audits help Companies understand the company’s internal management and business success. It is possible for some companies to make some mistakes and experience serious financial problems. It is best to choose an approved auditor who can provide you with details of the progress of the work and a clear picture of the books of accounts. This blog will discuss the official external audit requirements made by the government for companies in JAFZA.  

Jebel Ali Free zone External Audit Services 

Each free zone is managed by a private organization that issues and enforces business licenses and regulations in the zone. Businesses operating outside the region but within the UAE may be subject to additional requirements. All free zone regulations are designed to protect UAE citizens from unfair trade practices; ensuring that all businesses operating in the region comply with the rules governing relations with each other and with the rest of the world; and protecting shareholders from fraudulent transactions. The external audit role is one of these requirements. Businesses in JAFZA are required to renew their business licenses annually. 

Rules and Regulations For External Audits 

The implementation of official regulation number 1/99 gives a formal guideline governing the external audits. According to Clause no 51, there is a need for all the firms registered in Jebel Ali Free zone to choose an auditor from a list of registered and approved auditors. Audit companies are required to have a proper license from the financial Department in order to be qualified for the audit to be conducted. The accredited auditor must prepare an audit-report of the company; s financial statements including the company’s annual accounts and send it back to the shareholder’s accounts. The annual accounts report of the financial statement should be signed by the director board according to the guidelines written on their behalf in Clause.no. 49. According to this legislation, at least there must be a sign of one director on the financial balance sheet as a condition that needs to be followed by every company.  

According to Clause no.50, it is mandatory for submission of a copy of annual accounts along with the auditor’s report to be given to the FZCO department within three months of the fiscal’s ending. In exceptional cases, the duration of submission can be extended with the authority’s agreement.  

Importance of External Audit 

The obligation for audit is made mandatory by the Free-zone authority for several reasons including:  

• Independent audits provide the authorities with the data they require to assure that the commercial environment is effectively regulated.  
• An independent audit ensures that financial statements are accurate, and nothing is hidden.  
• The audit report informs the authorities that that company’s financial records are correct and reliable.  
• International auditing standards require an independent auditor to verify their fraud or misbehavior during the audit.  

Additional Rules For Approved Auditors  

There are also some additional guidelines given for the nomination of approved auditors as well as the report required by the approved auditors. The report for auditing must provide the given auditor’s view on whether or not the statement presented by the auditor is honest and truthful. The auditors must review the company’s financial accounts to comply with regulations made by the authorities. It also specifies that a copy of the signed document shall be sent to the free-zone authority.  

Regulations for Approved Auditors in JAFZA Dubai  

According to the JAFZA Regulations 2016, the accounts of companies registered in the free zone must be audited by JAFZA approved auditors in Dubai. The JAFZA Registrar maintains a list of approved auditors who list registered companies and are issued auditor licenses. Companies can only carry out the audit process by applying to approved auditors in JAFZA’s approved list. Free zone companies may also appoint more than one auditor to carry out the audit process. 

JAFZA Registered & Approved Auditors in Dubai  

Audit accounting shows the company’s true position in the market. Companies registered with JAFZA enjoy many benefits, but they also have to comply with all the rules. All rules and regulations are for the future development of registered companies in JAFZA Free Zone. Companies and businesses must comply with JAFZA rules and regulations and audit procedures. 

ebs Chartered Accountants is a leading UAE company with financial expertise that can provide you with a wide range of financial services and is approved by JAFZA. For your review and certification, ebs is a registered registrar that can assist you in your review process. For audit services and disputes regarding internal or external audits, please contact the ebs expert team. If you are looking for an approved auditor in UAE please contact ebs. 

ebs also offers reliable solutions for the progress and satisfaction of the company. We provide accounting and bookkeeping services, audits, approval reviews, financial services, business setup, corporate services and more. If you need other financial services and savings, please do not hesitate to contact our team of experts. 

FAQS 

What is the importance of an external audit for companies in JAFZA? 

An external audit ensures compliance with regulations, provides transparency to stakeholders, and enhances the credibility of financial statements. 

How often should companies in JAFZA conduct an external audit? 

Companies in JAFZA should typically conduct an external audit annually, as required by regulations and best practices. 

What should companies prepare before an external audit in JAFZA? 

Companies should organize financial statements, supporting documents, and relevant records to facilitate the audit process. 

What are the key steps involved in the external audit process for companies in JAFZA? 

The external audit process typically includes planning, testing, fieldwork, reporting, and follow-up procedures to ensure accuracy and compliance. 

Can companies in JAFZA choose their external audit firm? 

Companies in JAFZA have the freedom to select their external audit firm, but the chosen firm should be approved by the relevant authorities and possess the necessary expertise in JAFZA regulations. 

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