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Enhancing Audit Quality through
effective application of Auditing Standards
SAIF Zone – Background Information
Sharjah Airport International Free Zone (SAIF Zone) is one of several free zones within the United Arab Emirates offering business-friendly environments for international businesses. SAIF was established in 1995 and today hosts over 5,500 companies operating in industries such as manufacturing, trading, IT, media and many others. SAIF Zone delivers a wide range of resources and supportive regulations making it an attractive option for new business formation and for branches of international companies wanting access to Middle East and other world markets.
Like most UAE free zones, Sharjah Airport Free Zone is self-governing. This means businesses within SAIF Zone only have to deal with local regulations and local agencies. These administrative agencies are, by design, focused on making the regulatory environment as business-friendly as possible. There are few restrictions on business activities within the free zone.
Setting up a business in SAIF is straight-forward with very minimal red-tape and interaction with a limited number of government agencies. There are several organizations offering business services for new startups to make the process even easier and quicker. Once the business is operational, the license must be renewed on an annual basis. The renewal process is relatively easy, requiring some paperwork and a renewal fee. An External Audit of a Company’s financial reports is required in most of the Free Zones in UAE, including SAIF Zone, for license renewal of the Company. The External Audit must be performed by a UAE based Audit Firm approved by SAIF Zone.
External Audit – Defining the Process
During the process of external audit, an independent audit firm investigates the company’s financial records and business operation to determine if the Financial Statements of the company are accurate, complete and with no hidden or obscured information. Under international auditing standards the auditors must be completely independent from the company being audited and have no stake in the result of the audit. The result of an external audit will be an audit report following an established format. The primary information in the audit report is a simple statement of the auditor’s conclusion. There can be a favorable result indicating no problems were found in the audit process. An unfavorable result indicates the company’s Financial Statements contain errors or omissions that make the statements less than trustworthy. International auditing standards limit the information and opinions provided by the auditors in their report. The report is limited to the auditor’s opinion of the company’s Financial Statements.
Approved Audit Firms
As part of license renewal of a Company registered in SAIF Zone, an external audit is required to be performed. The Audit Firm must be approved by SAIF Zone for providing the external audit service to Companies registered there. The company being audited contracts with the Audit Firm and pays an audit fee for this process. The Audit Firm then performs the required investigations and presents the report to the management of the company being audited. After a discussion of the report with the management, it is then finalized and issued representing true and fair view of the Company’s Financial Statements.
To make the audit process more transparent and unbiased, the UAE laws pertaining to audit were revised in 2014, making the requirements much stricter for registered Auditors. Ongoing Professional Development is required for an Audit Firm to remain certified. Every four years, the Companies should change their appointment of Audit Firm to maintain independence. Audit Firms must be managed and staffed by certified and qualified Auditors.
Value Addition from an External Audit Process
Businesses reap significant benefits from external audits in addition to license renewal process. Establishing public trust in a company’s Financial Statements makes getting financial support from banks and other investors much easier. With presence of trustworthy audit reports of a Company, investors have confidence that their investments are safe. This can lead to more favorable loan conditions for the company. A favorable external audit report helps regulatory agencies determine if a company is operating within regulations and reduces the possibility of regulatory investigation into a company’s operations. The general public can use a company’s external audit reports as part of assurance that it is being a good corporate citizen and protector of the local environment. Company’s employees will feel more secure in their jobs when the Audit Report presents unbiased true and fair view of the Company’s financial condition. In larger organizations, an external audit report gives the owners confidence in the management team and helps the top management feel motivated to work towards achieving the Company’s key objectives. In fact, regular external audits are a valuable tool for any company even when the audits are not a regulatory requirement.
Our Audit Services
As part of a Group of Firms in UAE, Push Digits is a qualified professional company to help you meet your external audit requirement through our approved Audit Firm NUF Chartered Accountants, whether it is required by SAIF Zone, any other UAE Free Zone, bankers, lenders or investors. Farhan Aqil, an experienced and qualified Chartered Accountant, is Managing Partner at Push Digits and an Audit Partner at NUF Chartered Accountants. Through his commitment of quality work and his team’s capabilities, we make sure that every Audit we perform is of an excellent quality. Our clients always achieve the best quality External Audit service from our team and we are proud to uphold the highest standards of Audit and Accounting Profession.