External Audit Process and its Importance for DMCC Companies


 

The Dubai Multi Commodity Centre (DMCC) is the fastest-growing free zone in the United Arab Emirates, having been established in 2002 by the Dubai government to serve as a financial and business center for the trading community. It is also known as the JLT free zone and is home to approximately 6500 businesses, including big multinational corporations, regional industry participants, small and medium-sized businesses, and start-ups. DMCC has been designated as a Trade Gateway because it facilitates global trade with a wide range of business opportunities, including valuable goods such as gold, diamonds, stones, and pearls.

External auditing assists the DMCC free zone organization in detecting potential inefficiencies, wrongdoings, and waste, as well as providing objective insight and reviewing IT, technology, systems, and procedures. However, DMCC Approved Auditors in Dubai must be carried out by certified and licensed auditors in a fair, transparent, and objective manner in order for shareholders, stakeholders, banks, and suppliers to make informed judgments about the company’s financial status. Furthermore, the appointed auditor must be registered with DMCCA as an Approved Auditor and be placed on the approved auditor registry (AAL).

Process of Auditing :

As the auditor has no personal ties to the organization, external auditing in Dubai, UAE assures that the audit report will be impartial and unbiased. On request, all DMCC members must furnish an income statement, a balance sheet, and other financial information to the best auditors in Dubai.

1. Developing an Audit Strategy/Plan: The auditing process in Dubai, UAE begins with gathering and collecting documents from DMCC organizations, which are then extensively analyzed to determine how the audit will be carried out. Workshops are also held to identify possible concerns in the future. Finally, a proper audit plan is being developed.

2. Understanding the Client: Auditors get full knowledge and background information about DMCC firms in order to determine the risk of financial statement deception, examine processes, perform observations, and then decide on the scope, timing, and type of additional audit activities.

3. Risk Management/Evaluation: This step enables auditors to detect the risk of significant error in the system/processes, including control and inherent risk. The information of DMCC firms is used by UAE auditors to indicate the amount of transaction account balances and potentially misstated speech.

4. Performing Control Tests: This ensures that all necessary controls are designed, maintained, and executed properly. Furthermore, it will ensure that all transactions, receipts, and invoices are appropriately documented.

5. Audit Completion: Following a thorough examination and analysis of the DMCC firm’s books of accounts, auditors in Dubai, UAE reached a final conclusion on the financial statement disclosure status. A meeting with top management is scheduled to examine the findings.

6. Audit Report: Finally, a standard report is written by a competent and experienced auditor of the best auditing firms in Dubai, detailing all financial strengths and weaknesses, as well as system and business procedures.

To secure the renewal of the trading license, DMCC members must upload the audit report in Dubai, UAE at the conclusion of the fiscal year, together with stamped audited financial statements and summary sheets, according to the relevant laws and regulations.

One of the most attractive features of the DMCC free zone. Other advantages include:

  • Giving foreign companies entire ownership
  • Personal and corporation tax rates are not applied.
  • There are no currency limitations and 100% capital repatriation.
  • Multiple stockholders are permitted.
  • Clustering of industries and infrastructure designed specifically for them.
  • At competitive rates, we have quality freehold, commercial, and residential property for sale or lease.

Importance of Audit for DMCC :

External audit services are provided by a Dubai audit firm to assist companies in developing accurate financial statements.

1. Observance of UAE laws and regulations

An external auditor assists the DMCC organization in identifying any flaws in the preparation of financial statements and making recommendations on how to fix them. Because the internal auditor may not give the needed information on time or may be prejudiced in doing so, an external auditor is essential to expose any violations of industry standards, regulations, or recommendations and to prevent legal action against the organization.

2. Preventing fraud is essential.

External auditors perform audits in order to look for any unusual transactions while reviewing accounting and financial data. Auditors encourage DMCC firm management to take the necessary steps to mitigate the business risk of probable fraud in the event of any misrepresentation. Risk, financial criminality, and material mismanagement are all investigated by Dubai auditors.

3. Credibility

The government, law enforcement authorities, investors, and financing businesses are better satisfied when the financial accounts are audited by external auditors. Because trained external auditors have no personal agenda, they are thought to be more dependable and trustworthy. To attract investors and improve the company, DMCC members use external auditors in Dubai, UAE.

4. Internal Audit Quality Assurance

The external auditor in Dubai, UAE, also served as a quality assurance officer for the DMCC enterprises’ internal auditors. Even if internal auditors have worked for the organization for a longer length of time, it would be a mistake to presume that internal auditing is sufficient and error-free. While reviewing financial, accounting, and bookkeeping records, the external auditor can not only point out faults but also provide recommendations for future control to prevent errors.

5. Long-term advantages

The long-term benefits of employing an external auditor include increased profitability for DMCC enterprises, streamlined company operations, and modifications to procedures and financial controls. It offers not only the firm but also investors trust in the transparency and reliability of financial data.

The External audit process and its Importance for DMCC Companies are as follows. Tgs Koya is a renowned accounting and auditing firms in Dubai, with a staff of DMCC-accredited auditors.

Comments

  1. Anonymous1 June 2022 at 04:17

    This comment has been removed by the author.

    ReplyDelete
  2. Anonymous1 June 2022 at 04:17

    I got more information about DMCC company formation while reading this article. Keep posting different articles like this.

    ReplyDelete

Post a Comment

Popular posts from this blog

What are the various techniques to ensure a successful annual audit?

Image
Auditing may be considered a difficult process by the business owners because it is one of the most important fundamental processes that must be conducted by qualified professionals and the   best Auditors in Dubai.   As per the timeline stated company performs the business in accordance with the required principles, laws, and regulations as stated. The  best audit firms in Dubai  must always keep the records of all the transactions from the beginning itself and it must be up to date. This is the most important thing that should be kept in mind before getting ready for an audit, because of this the auditors can be provided with more accurate records that will make it easy for auditors to verify. A minor step from business owners may reduce the workload for auditors and they may be able to give the audit report within a short span of time. An audit report is an important document that is used for various purposes such as communicating it to the investors, shareholders...
Read more

Glimpse at different types of accounting in Dubai

Image
  If an entrepreneur is running a business in Dubai then accounting functions can’t be ignored. Accounting is considered as a lifesaver for a business in both the situations if he is building an in-house accounting team or if an entrepreneur is outsourcing the process to   chartered accountant firms in Dubai. Following are the various types of accounting in Dubai : 1. Financial Accounting:  It is basically an accounting process that is mostly done by accountants. Financial Accounting is a process of keeping a track of a company’s financial transactions. All the financial reports are produced by the accountants by using specific procedures by local or globally accepted accounting standards. 2. Accounting Management:  Managers use accounting information in decision making and also assist in the management . They also use statistical tools and techniques to present data that help in decision-making. 3. Tax Accounting:  Tax Accounting refers to determining a company...
Read more

10 advantages of financial audit to the companies

Image
  For a company or business conducting an audit has become an important part of work. All over the world organizations conduct an audit of their business irrespective of their size or the type of industry. Best  Accounting and Auditing Firms in Dubai   helps entrepreneurs to conduct the best auditing services for their companies. To detect and prevent any wrong and illegal activity being conducted in the business is one of the main reasons for conducting an audit. This is the reason that conducting an audit is the best option for both businesses as well for the entrepreneurs. The process of auditing is very beneficial for some people who consider an audit just a waste of time and resources of the company. These types of people are not fully aware of the various advantages of performing an audit and the numerous benefits a business can avail of by conducting an audit. Key advantages that the process of  auditing can provide to a business : 1.It maintains the consisten...
Read more