Benefits of Internal Audit in UAE

Who are JAFZA approved auditors? What is their importance?

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Free Zones in Dubai are those economic areas where trading and other economic activities take place at a very subsidised tax and customs rates. There are more than 37 free zones in Dubai, and Jebel Ali Free Zone Authority (JAFZA) is the oldest and biggest free zone in the country. JAFZA was established for business operations that would boost Dubai’s economy to a global level by attracting more and more Foreign Direct Investments. More than 6000 companies with global bases have been established in the JAFZA and at least 32 per cent of the total Foreign Direct Investments in the UAE flow from JAFZA into the country.

 

Who are JAFZA approved auditors?

With so much of economic importance attached to JAFZA, it is certain that the Government has made regulations related to the free zones in order to prevent any compromises with the integrity of the people in the Dubai in particular and the country in general. One such regulation is the need for annual auditing of the companies working in JAFZA.  According to the regulation, all companies that are working in JAFZA are required to produce a financial report including all financial transactions and statements that have been audited by an auditor from the list of approved auditors in the Dubai.

In simple terms, JAFZA approved auditors in Dubai are those auditors that have been approved by the JAFZA Authority to conduct external auditing for companies that are engaged in business in the special economic area. These approved auditors are supposed to audit financial statements of the companies for the respective financial year and produce it to the authority. Those companies who fail to produce these reports are not eligible for renewing their professional business licence and therefore, not allowed to function in the free zone anymore.

Why are JAFZA approved auditors so important?

Approved auditors in Dubai are of crucial importance to the companies operating in JAFZA as they are the ones that help them in renewing their professional license. If companies do not submit an annual financial report audited by an approved auditor, then the professional license to carry on with their businesses will be sacked, and they will not be allowed to work any further. The auditors are the unsung heroes of these free zones who make sure that no improper business practices are being carried out that could compromise the economic prosperity of the country.

The approved auditors in Dubai have to make a detailed report of the appointed companies under them and have to make sure that all the statements on the annual report reflect the actual image and conditions of the company concerned, and there are no errors in the statements and description of the finances of a company. The auditors have to seek the signatures of the managers/ directors/ CEOs of the companies on the balance sheets and the declaration part of the report to make its official documentation and then submit it to the free zone authority.

The approved auditors in Dubai have eyes for catching minute details which help in checking any malpractices like money laundering, poor working conditions, fraudulent and scam business practices, and the illegal manufacturing of products and services. The approved auditors should include their opinion about the financial and working conditions of the companies in the annual audit report. Approved auditors in Dubai also have the task of going through the business policies and principles that are followed by companies based in JAFZA, and if companies have implemented business policies that are far from the rules and regulations established by the authorities, then they must bring it to notice and mention it in the audit report.

Companies that want to seek the advantages of a free zone like JAFZA must get their financial statements audited by approved auditors as it can open a room of opportunities – a good audit score can make a company quite popular in the business world; it opens the door to investment, global and domestic; it helps companies in analysing their business practices and overall financial budget; most importantly, it helps a company in understanding financial stability and various sources of revenues. Approved auditors help the authority by identifying invalid businesses violating rules and regulations, malpractices like child labour, poor working condition, low wage, etc., and any scam or fraudulent activities that have been going on.

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