The UAE has a number of free zones across Dubai, Abu Dhabi, Sharjah, Fujairah, Ajman, Ras al-Khaimah and Umm al-Quwain. Free zones may be broadly categorized as seaport free zones, airport free zones, and mainland free zones.Audit in Free Zones
Each free zone has its own authority and its own rules, which are applicable to investors looking to set up firm in those zones.
i) Allows 100 percent foreign national ownership of the firm with no requirement of the local sponsor or local service agent.
ii) Waiver of corporate taxes (time-bound and renewable for further periods).
iii) Exemption from personal taxes as well as import and export taxes.
iv) 100 percent repatriation of revenue and profits.
v) Documentation is less and more suited to foreign investors.
vi) Long-term leasing options (up to 25 years) available at great terms to investors.
vii)Recruitment and workforce processes are simplified, faster and cheaper.
viii) Easy availability of legal, housing, immigration, labor, and other facilities.
ix) Incorporation is faster than when done outside free zones
x) 100 percent free transfer of funds
Annual financials of the companies registered under Free zones are advised to be audited each year and submitted at the time of its trade license renewal. But for some forms of entities in the free zone, an audit of accounts is mandatory like the free zone companies (FZCO) and free zone establishments (FZE). For a branch of the local and foreign company, audit report may not be necessary for most free zones.
While the standard reporting period is one calendar year, a company may nominate a different reporting period the first reporting period will commence from the date of incorporation and must not be less than six months and no more than eighteen months.
Annual Financial Audit: BMS Auditing Chartered Accountant
A financial audit is an independent, objective evaluation of an organization’s financial reports and financial reporting processes. The primary purpose of financial audits is to give regulators, investors, directors, and manager’s reasonable assurance that financial statements are accurate and complete.
BMS is equipped with sound professionals to do the audit procedures adequately to provide you with the best possible service.
Our commitment to delivering high-quality assurance services is at the heart of what we do. And because we understand that, to achieve your potential, you need a tailored service as much as a consistent methodology, we work to give you the benefit of our deep sector knowledge, our full subject matter knowledge and the latest insights from our work worldwide.
Stages of Audit:
Phase I: Plan and Design an Audit Approach:
What are auditors will understand?
i) The relevant industry, regulatory, and other external factors including the applicable financial
ii) The nature of the entity
iii) The entity’s selection and application of accounting policies
iv) The entity’s objectives and strategies, and the related business risks that may result in material misstatement of the financial statements
v) The measurement and review of the entity’s financial performance
vi) Internal control relevant to the audit
Phase II: Perform Test of Controls and Substantive Test of Transactions:
Here the auditor verifies the internal control of the organization and based on that decides whether the
organization needs a comprehensive audit or substantive audit.
i) Test of Control: if the auditor plans to reduce the determined control risk, then the auditor should perform the test of control, to assess the operating effectiveness of internal controls (e.g. authorization of transactions, account reconciliations, segregation of duties) including IT General Controls. If internal controls are assessed as effective, this will reduce (but not entirely eliminate) the amount of ‘substantive’ work the auditor needs to do (see below).
ii) Substantive test of transactions: evaluate the client’s recording of transactions by verifying the monetary amounts of transactions, a process called substantive tests of transactions. For example, the auditor might use computer software to compare the unit selling price on duplicate sales invoices with an electronic file of approved prices as a test of the accuracy objective for sales transactions. Like the test of control in the preceding paragraph, this test satisfies the accuracy transaction-related audit objective for sales. For the sake of efficiency, auditors often perform tests of controls and substantive tests of transactions at the same time.
iii) Assess the Likelihood of Misstatement in Financial Statement.
Phase III: Perform Analytical Procedures and Tests of Details of Balances
i) where internal controls are strong, auditors typically rely more on Substantive Analytical Procedures (the comparison of sets of financial information, and financial with non-financial information, to see if the numbers ‘make sense’ and that unexpected movement can be explained)
ii) where internal controls are weak, auditors typically rely more on Substantive Tests of Detail of Balance (selecting a sample of items from the major account balances, and finding hard evidence (e.g. invoices, bank statements) for those items)
Phase IV: Complete the Audit and Issue an Audit Report
After performing various tests, our auditor finally completes the audit and finally issues an audit report.
Our Auditor performs the various functions of Audit with due diligence and has his own set of responsibilities like:
i) Gives a true and fair view about whether the financial report complies with the accounting standards
ii) Conduct their audit in accordance with auditing standards
iii) Give the directors and auditor’s independence declaration and meet independence requirements
iv) Report certainly suspected contraventions
At BMS we have a team of qualified Chartered Accountants who are well versed and expert in the
Financial Statement Audits and will give the organization an exact and true picture of the Financials. We adapt our audit services to fit your unique needs, but what doesn’t change is the exceptional service quality we deliver to all our clients. Whether you’re already at the top or you’re on your way up.
At BMS Auditing, our Financial Statements audit lends credibility to our clients’ financial statements, as our auditors offer more to an assignment than merely ticking boxes. Through our global network, they have access to the knowledge of industry developments and international trends, which provides them with intrinsic awareness of the global marketplace and required local standards.
List of Free Zones
Here are some of the free zones where you can start and BMS is always at your service to conduct a timely and effective audit for you.
||Dubai Design District
||Dubai Industrial City
||Dubai Maritime City Authority
||Dubai Media City
|| Masdar City
||Free Zones in Fujairah
|| Ajman Free Zone Authority