Companies operating in the Dubai Airport Free Zone are required to have their books of accounts audited by one of the Dubai Airport Free Zone’s registered audit firms. Audit firms that are not registered with the Dubai Airport Free Zone Authority (DAFZA) are not permitted to undertake audits or liquidations for DAFZA-licensed businesses. It’s also worth noting that auditing is required for both Free Zone Establishments (FZEs) and Free Zone Companies (FZCO). This requirement is in place to ensure that registered companies follow local and international standards such as the International Financial Reporting Standards (IFRS), Anti-Money Laundering (AML), and Terrorist Financing Prevention Act (TFPA).
Dubai Airport Free Zone Authority is a government-owned corporation based in Dubai, United Arab Emirates (DAFZA)
The Dubai Airport Free Zone, which is located across from Dubai International Airport, was formed by the Dubai government in 1996 under Law No. 2. The DAFZA was established with the goal of achieving the UAE government’s investment-driven economy policy. It now houses over 1600 firms from across the world in a variety of industries, including aviation, engineering, and telecommunications. DAFZA makes a significant contribution to Dubai’s $272 billion in global trade. In the first nine months of 2019, DAFZA accounted for 12% of Dubai’s international commerce. DAFZA’s closeness to Dubai International Airport makes it an appealing option for international investors, as the airport connects over 220 destinations across six continents with over 150 airlines.
Why Audit Is Mandatory From Approved Auditors In DAFZA?
The companies registered with DAFZA are required to appoint an approved auditor who will examine and report on the accounts prepared in accordance with local and international regulations. The auditor’s report must state whether the company’s accounts comply with the International Financial Reporting Standards (IFRS) and make sure the companies are not indulging in money laundering.
The registered auditor must ensure that the books of accounts are complete and that no transaction is left unrecorded, that the accounts present a true and fair view of the company’s affairs at the end of the financial year, and that the books of accounts are free of material misstatements in the report submitted to DAFZA. In addition, the auditor must say in his report that the company has engaged in no other activities than those permitted by its trade license. Before renewing a trade license, the authorities heavily rely on the auditor’s findings.
The DAFZA certified auditor is responsible for conducting investigations to determine whether the company has kept accurate and comprehensive records as required by the Ministry of Finance and the Federal Tax Authority (FTA). The auditor must also make sure that the company’s accounts are in line with its accounting records and returns, and that it is VAT compliant. Companies operating in DAFZA have the option of selecting top DAFZA certified auditing firms based on their reputation and experience. According to the FTA, DAFZA is a designated free zone.
Documents Required for the Audit by the DAFZA Approved Auditors
Auditors ask companies to provide documents pertaining to the relevant year in order to conduct audits and assurances, which makes it easier for the auditor to formulate an opinion on the financial position by reviewing financial statements at the end of the year to ensure compliance with legislation. The following documents must be presented by the companies:
- Credit/debit confirmation for all financial activities
- Bank statements
- Bills and invoices copies
- Association Memorandum (MoA)
- By laws of the Association (AOA)
- The most recent trade license
What are the best practices for preparing and maintaining accounting records for auditing?
Companies must keep accounting records, as well as supporting papers, that is sufficient to justify transactions. The financial status of the company must be disclosed with acceptable accuracy in the records. The accounting records must be compliant with IFRS and FTA, and they must present a realistic picture of the profit and loss and financial situation for the year.
DAFZA Auditing Services
All enterprises operating in the Dubai Airport Free Zone must select an auditor from the approved list of auditors maintained by the Dubai Airport Free Zone Authority (DAFZA). Intellect Chartered Accountants (ICA) is a leading auditing and accounting business in the United Arab Emirates. ICA is registered with the Dubai Airport Free Zone Authority. ICA’s qualified Chartered Accountants examine and report on the financial statements of both FZE and FZCO enterprises operating in the DAFZ. ICA auditors also provide a true and fair judgment on a company’s financial situation, ensuring that the company’s accounts are free of substantial misstatements and conform to local and international requirements such as IFRS, AML, and Combating Financing of Terrorism (CFT).
ICA offers Financial Advisory Services, Tax Consulting Services, Management Consulting Services, VAT Registration, VAT Deregistration, Internal/External Audit for Companies, Business Valuation Services, etc. in UAE.
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