The DIFC was established in 2004 as an international financial centre to enable the financial businesses to enter and expand into the emerging markets in the region. The DIFC was launched in accordance with UAE Federal Decree No. 35 of 2004 as part of the Dubai government's goal to diversify the emirate's economic resources and attract more investments. The DIFC is an independent jurisdiction within the UAE having its own legal and regulatory framework. The DIFC hosts a wide array of financial and non-financial companies focusing on sectors such as:
What makes the DIFC stand apart from other free zones is its set of a unique legal framework governing civil and commercial laws. The DIFC is an autonomous entity with an independent judicial system that is consistent with the English Common law. THE DIFC Courts are exclusively responsible for all civil and commercial matters related to the companies registered in the DIFC.
The DIFC is one of the two finance-based free zones which makes setting up a business in the free zone a very lucrative option, especially for a finance-based company. The various benefits of setting up a company in DIFC are:
The companies in the free zone are supervised and regulated via several regulatory authorities.
The Dubai International Financial Centre (DIFC), a globally recognized financial free zone in Dubai, has mandated that the companies operating within the free zone are required to get their books of accounts audited by registered and approved auditors in DIFC. Companies operating within DIFC should maintain their book of accounts and exhibit an accurate picture of the financial position. Auditors in Dubai international finance centre ensure proper maintenance of account books and ensure that company's balance sheet are prepared in accordance with the IFRS standards.
As per the DIFC free zone, book of accounts should be kept at the registered office of the company and must be open during the inspection. Failing to comply with these rules, may result in hefty fines.
A DIFC registered entity that is required to have its accounts examined and reported on by an auditor must appoint an auditor registered with the DIFC Registrar of Companies.
Recognised Auditors are registered by the Dubai Financial Services Authority (DFSA) and may be appointed for the purpose of examining and reporting upon accounts of regulated DIFC entities.
Submitting the external audit report is mandatory for the companies in the DIFC to get their trade license renewed. It is also crucial to remember that the companies will not be able to get their business license renewed if they conduct the audit by the external auditing firms that are not registered with the DIFC Authority. The audit process assures the authorities that the companies are not conducting any financial anomalies and are complying with the laws and regulations. In the DIFC, the companies in the financial and other regulated sectors are being regulated by the Dubai Financial Services Authority (DFSA). The other non-regulated companies are regulated by the DIFC Authority.
It is mandatory that the companies operating within the DIFC are required to submit their audit report to the DIFC Authority within four months of the end of their respective financial year. The companies that fail to submit the audit report along with audited financial statements would have to face consequences like the non-renewal of their trade license. Appointing the best auditing firms in Dubai, UAE (that are listed with the DIFC Authority) will save the companies from such regulatory actions.
The companies working within the DIFC are required to maintain the proper book of accounts that give an accurate image of the company's financial position. The proper maintenance of the books of accounts is essential for the shareholders to guarantee that the company's balance sheet and profit and loss accounts are prepared with compliance with International Financial Reporting Standards (IFRS).
Registered and approved auditing firms in DIFC are subject to uphold the highest business standards themselves as well. The authorities require all companies to maintain accounting records in accordance with the IFRS laws. The exceptions are only for the international companies following other IAS or GAAP rules.
The DFSA provides comprehensive guidelines on accounting and auditing reporting. All private firms are required to adhere to the rules on accounts books, financial statements, regulatory returns, and conduct of audit from one of the approved auditing firms in DIFC.
Since it is mandatory for the companies to get their books of accounts audited by registered audited firms in DIFC, Excellence can assist the companies in DIFC with auditing. With the help of Excellence's highly qualified audit professionals, by regularly performing an audit, you can ensure compliance with any and all relevant laws and regulations. It can also help provide you with peace of mind that you are prepared for you next audit.
In order to conduct the audit and assurance, the auditors ask the companies to furnish the documents corresponding to the relevant year, which facilitates the auditor's job to draw an opinion on the financial position by analyzing the financial statements at the year-end to comply with regulations. The companies are required to present the following documents:
Memorandum of Association (MoA)
Articles of Association (AOA)
Latest Trade License
Trial Balance, Balance Sheet, Profit & Loss Statement
Registration Details for VAT and Excise Tax (If Applicable)
Books of Accounts
Audit schedules (Fixed Assets Register, Ageing of Accounts receivable & payable with provision for bad debts, accruals, etc.)
Details of closing stock and work-in-progress at the year-end
Details of fixed asset additions and disposals during the year with proper supporting
Copies of bills and invoices