Country by Country Financial Reporting and Auditing Framework
United Arab Emirates – Horwath Mak (prepared September 2013)
Preparation and Filing of Statutory Financial Statements
Joint stock companies, limited liability companies and partnerships limited by shares registered in United
Arab Emirates are required to prepare annual financial statements and file these with Ministry of Economy
and Commerce, U.A.E and the Concerned Authority.
Joint stock companies, limited liability companies and partnerships limited by shares are required to prepare
their financial statements and get them audited within 3 months from the end of the financial year. They are
also required to file the financial statements within 10 days of the approval to the above mentioned
authorities.
All companies and partnerships are required to prepare full financial statements including the Balance
sheet , profit and loss account and other explanatory notes as required by the law.
All the entities in UAE follow International Financial Reporting Standards (IFRS) to prepare the financial
statements which fulfills the minimum requirements of the law and is also acceptable internationally to
financial statement users like the regulatory authorities and financial institutions etc.
Financial Reporting Framework
Free zone (FZ) companies in the UAE are normally required to prepare their financial statements in
accordance with International Financial Reporting Standards (IFRS).
All other companies/partnerships limited by shares in the UAE, subject to any other requirements which may
be otherwise specified, have the option to prepare their financial statements in accordance with any generally
accepted framework but majority of the entities do follow International Financial Reporting standards (IFRS).
Subsidiary companies of listed companies which are registered in other jurisdictions have an option to
prepare their financial statements in accordance with the framework followed by the parent company.
Audit Requirements for Companies Registered in United Arab Emirates.
In the UAE the following form of companies must have an audit if at any time in the financial year if it’s been:
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Joint stock companies
Limited liability companies
Partnerships limited by shares
Any other business which is required by any other law.
The law is silent about the audit of the small businesses. Normally small companies get themselves audited
when they are required to do so by any regulatory body or financial institution or to meet any other special
requirement.
Country by Country Financial Reporting and Auditing Framework
United Arab Emirates – Horwath Mak (prepared September 2013)
Auditor’s Appointment, Rotation and Joint Audits
Auditors in the UAE are appointed for a fixed period of one year and can continue as the auditor of the
company after the first year subject to approval of the shareholders in the general assembly meeting. The
UAE does not currently have any rules relating to mandatory rotation of audit firm but there are guidelines
within the ethical standards regarding partner rotation.
Auditing Standards
Horwath Mak, the UAE member firm of Crowe Horwath International is required to undertake its audit and
express an opinion on the financial statements in accordance with applicable laws of the country and
International Standards on Auditing issued by IFAC. Those standards require us to comply with the code of
ethics issued by IFAC.
Ethical Framework
There are no ethical standards specifically issued for UAE. All the firms here normally follow ethical standard
issued by the IFAC. Some of the free zones have adopted the IFAC codes and made them mandatory for the
auditors in the Dubai International Financial Center.
In addition to that, all the practicing partners in Horwath Mak are members of different professional bodies
including ICAEW, ACCA and other professional bodies which have their own ethical requirements for the
members to follow.
Audit Regulation
Horwath Mak is subject to the following external and internal monitoring processes with regard to their audit
practice:
External Monitoring
Free Zones in UAE have rigorous processes of monitoring and streamlining the auditing practice. They
monitor the practice of audit firms and review their work on an annual basis. Based on the quality review, they
conduct meetings with the practitioners and ensured the compliance of the relevant laws and ISAs in the
audit.
Main users of the financial statements of the companies in the main land are the shareholders and financial
institutions. These financial institutions have their monitoring processes to rate the firm, based on their
criteria.
Internal Monitoring
We have established annual monitoring procedures known as Quality Assurance Reviews (QAR), led by the
QAR Partner and, run by the Horwath Mak UAE head office. The QARs are conducted under carefully
defined procedures and address all our service lines and Practice Assurance, which exceeds what is
required by regulations.
Country by Country Financial Reporting and Auditing Framework
United Arab Emirates – Horwath Mak (prepared September 2013)