A guide to audit and assurance in the UAE

Businesses operating in the UAE should assess whether they are required to have their financial statements audited. Audit requirements can depend on the applicable legislation, legal form, jurisdiction, licensing authority and regulatory status of the entity.

Certain businesses may be required to appoint an independent auditor and submit audited financial statements to the relevant authority or other stakeholders. Other entities may have specific reporting or audit obligations arising from their regulatory framework, contractual arrangements or group reporting requirements.

Key considerations include:

• Determining whether an audit is mandatory
• Understanding the applicable statutory and regulatory requirements
• Identifying the relevant financial reporting framework
• Appointing an eligible independent auditor
• Preparing financial statements and supporting records
• Meeting applicable reporting and submission deadlines
• Understanding the requirements of shareholders and other stakeholders

Organisations should evaluate their specific circumstances to determine the audit requirements that apply to them.

The audit requirements applicable to a UAE business may vary depending on where it is incorporated and the rules governing its operations.

Mainland companies should consider the relevant UAE legislation, licensing requirements and any applicable regulatory obligations. Businesses established in free zones should assess the rules of the relevant free zone authority and any additional requirements arising from their activities or regulatory status. 

Key considerations may include:

• Audit requirements applicable to the entity
• Eligibility and appointment of auditors
• Preparation and submission of audited financial statements
• Applicable accounting and reporting standards
• Financial reporting deadlines
• Requirements specific to the relevant licensing authority
• Additional obligations arising from regulated activities

Businesses should not assume that audit requirements are identical across all mainland and free zone jurisdictions. Understanding the applicable framework can help them plan their reporting activities and avoid delays.

Businesses operating in regulated sectors or financial jurisdictions may be subject to additional audit requirements, including specific auditor eligibility criteria, reporting obligations and regulatory deadlines.

Depending on the jurisdiction and the nature of the regulated activity, entities may need to appoint auditors approved or recognised by the relevant authority.

Key considerations may include:

• Eligibility and approval of the appointed auditor
• Regulatory reporting requirements
• Submission of audited financial statements
• Compliance with applicable reporting deadlines
• Requirements relating to financial disclosures
• Additional obligations arising from the entity's activities

It is important to understand the requirements of their relevant regulator and confirm whether specific auditor approval or registration is required.

Financial statements provide information about a business's financial position, performance and cash flows. They also form a key part of the external audit process. Preparing complete and accurate financial statements can help businesses meet reporting obligations and provide stakeholders with a clearer understanding of their financial performance.

Key considerations include:

• Preparing financial statements
• Applying the relevant financial reporting framework
• Maintaining supporting accounting records
• Reconciling balances and reviewing transactions
• Preparing schedules and supporting documentation
• Assessing significant accounting judgements
• Reviewing financial disclosures
• Meeting applicable reporting deadlines

Businesses should establish appropriate reporting processes throughout the financial year rather than treating financial statement preparation as a year-end activity.

Effective audit preparation involves more than gathering documents at the end of the financial year. Businesses should maintain accurate accounting records, establish clear processes and ensure that supporting information is available when required.

Preparation may include:

• Finalising accounting records
• Reconciling bank accounts and ledger balances
• Preparing supporting schedules
• Maintaining invoices, contracts and other relevant documentation
• Reviewing significant transactions and balances
• Documenting key accounting judgements
• Identifying outstanding issues before the audit begins
• Coordinating responsibilities between finance teams and management

Early preparation can help improve the efficiency of the audit process, reduce avoidable delays and support the timely completion of financial reporting.

Appropriate internal controls help businesses protect assets, maintain reliable financial records and support compliance with applicable requirements.

An audit may also highlight areas where processes, documentation or controls require further attention. Businesses should consider how their financial reporting processes and control environment support the accuracy and completeness of the information presented.

Areas for consideration may include:

• Segregation of duties
• Approval and authorisation procedures
• Bank and account reconciliations
• Revenue and expenditure controls
• Access to financial systems
• Documentation of key processes
• Monitoring of significant financial risks
• Follow-up on identified control weaknesses

Maintaining appropriate controls throughout the year can support more reliable reporting and help businesses manage financial and operational risks.

Businesses may need to prepare financial statements in accordance with International Financial Reporting Standards (IFRS) or another applicable financial reporting framework, depending on their circumstances and regulatory requirements.

Applying the relevant standards requires businesses to consider how transactions are recognised, measured, presented and disclosed in their financial statements.

Key areas may include:

• Revenue recognition
• Leases
• Financial instruments
• Property, plant and equipment
• Impairment of assets
• Provisions and contingencies
• Business combinations
• Related-party transactions
• Financial statement presentation and disclosures

Businesses should assess the accounting requirements relevant to their activities and seek appropriate advice when transactions involve complex accounting judgements.

In addition to statutory audits, businesses may require other independent assurance or related services depending on their objectives, stakeholder expectations and regulatory requirements.

These engagements may address specific financial information, processes or reporting requirements rather than the full set of financial statements.

Depending on the engagement and applicable professional standards, services may include:

• Review engagements
• Assurance over specific financial information
• Agreed-upon procedures engagements
• Reporting for particular regulatory or contractual purposes
• Other assurance engagements tailored to defined requirements

The appropriate engagement depends on the purpose of the work, the intended users of the report and the level of assurance or other reporting required.

Audit and assurance requirements can evolve as a business develops. Changes in ownership, operations, legal structure or regulatory status may affect its reporting obligations and audit requirements.

Businesses should consider audit implications when:

• Establishing a new business
• Selecting a mainland or free zone structure
• Entering a regulated jurisdiction
• Expanding operations
• Preparing for year-end reporting
• Undertaking significant transactions
• Restructuring the business
• Preparing consolidated financial statements
• Responding to changes in regulatory requirements
• Planning for future growth

Considering audit requirements early can help businesses establish appropriate reporting processes and prepare for their ongoing responsibilities.

Our audit and assurance team supports businesses with independent audit and assurance services, helping them understand applicable reporting requirements and address the financial reporting considerations relevant to their circumstances.

Our services can include:

• Statutory audit: Independent audits of financial statements in accordance with applicable professional standards and reporting requirements.
• Regulatory audit support: Audit services for eligible entities subject to specific regulatory and jurisdictional requirements.
• Financial reporting: Support in understanding applicable reporting standards and addressing financial reporting considerations.
• Assurance services: Independent assurance and related engagements tailored to defined business, stakeholder or regulatory requirements.
• Audit readiness: Practical guidance on audit preparation, documentation and the financial reporting process.

Through our multidisciplinary approach, our audit and assurance team can also work alongside corporate services, tax advisory, accounting and outsourcing, risk consulting and business advisory specialists to provide coordinated support across the business lifecycle.