February 21, 2024Dated: | ByMarketing Marketing | Audit | Start the Audit Process for my DMCC Company The Dubai Multi Commodities Centre (DMCC) Free Zone is a free trade zone in the United Arab Emirates (UAE). By obtaining a trade license for this trade zone, you can enjoy many broad advantages, which include 100% foreign ownership, attractive facilities and infrastructure, effective location, exemption from import duties, and more. However, several rules, like Compliance Audit in DMCC, must be fulfilled to enjoy these benefits. Corporations registered in the DMCC Free Zones in Dubai must prepare and submit an audit report through the necessary documents with the help of certified auditors in the UAE. The audit regulations for DMCC businesses are set out in the DMCCA Company Regulations and the UAE Commercial Companies Law. In this article, we will provide you with crucial information about the Auditing Guidelines for DMCC. In addition, we will offer you an in-depth guide for starting this process in your corporation. What is the Audit Process for a business in DMCC? A business in DMCC Free Zones must maintain all its financial records for the past 5 years. It is also advisable that these documents of the businesses are audited periodically which will prevent any sudden surprises at the end of the financial year when the documents are submitted to the DMCC authority. Here, one thing you must check is that the financial audit is conducted by an approved auditor who is licensed by the Ministry of Economy and approved by the DMCC authority. There are many benefits of having the business audited because it assists the business management in understanding the present financial condition of the company. It additionally helps to maintain the financial records of the business which come in handy at the time of filing the taxes Audit and its Requirements in DMCC Freezone in UAE As per the regulations for DMCC Free Zone Company Audit, companies must undergo annual audits of their financial statements. The DMCC (Dubai Multi Commodities Centre) free zone authority adds a series of regulations set for entrepreneurs, and submitting audited financial statements is an inevitable requirement for businesses in the DMCC region. Once submitting audit statements, the DMCC authority will review the financial statements and audit reports to ensure that they comply with the relevant standards and regulations. It is essential to note that DMCC mandates that the audited financial statements be delivered within 90 days at the end of the fiscal year. If the audit report and financial statements are accepted, the DMCC authority will issue a certificate of compliance to the business. This certificate confirms that your company has completed annual audits and is in compliance with the Regulatory Audit for DMCC Companies. Documents required for DMCC audits To submit an annual audit, you must follow some Audit Requirements. Gathering some documents is one of the necessary requirements that you must fulfill. Here is the list of documents required for audits in the DMCC: The license of the Company Passport copies of Shareholders Updated trade license VAT and Excise tax registration details Bank confirmation Trial Balance Management Accounts (if prepared such as balance sheet and income statement) Depreciation and fixed assets schedule Accounting ledgers of major accounting heads List of customers and suppliers Articles of Association (AoA) Documents of invoices, bills, etc. Lease Agreement / Tenancy Contract Share Certificates Bank statements Memorandum of Association (MoA) Various factors may affect the completion of the list of required documents. Therefore, it is possible that the list may not be fully complete. We recommend you consult Flyingcolour Tax to obtain the complete list of documents for audits in DMCC. Complete Auditing Methods for DMCC Free Zone Firms Regarding Compliance Audit in DMCC, specific guidelines are being laid out for the businesses or corporation officials to work in cooperation with DMCC-approved auditors. Below is the list of steps involving these guidelines to audit businesses in DMCC: 1. Prepare for company audits DMCC makes it mandatory that all the directors of the DMCC free zone companies have to obtain the preparation of accounts for every financial year. It should comply with the IFRS [International Financial Reporting Standards] and specify the profit or loss developed during the given period. Every company should provide authorities with a copy of the audited documents and the auditor’s report with the registrar within five business days of the relevant general meeting, along with additional information requested by the registrar and a DMCC summary report. 2. Maintenance of accounts All the companies have to hold account records along with supporting documents that represent the transactions with accuracy depicting the financial position of the organization at that specific point in time. 3. Disclose the account information with shareholders of the company. The authorities at the DMCC have mandated to copy audited financial statements and the auditors’ reports. If the company forgot to provide these documents to shareholders, then they have the power to request the audited documents. At this point, the business must share the relevant documents within the time of five days. 4. Appointment of auditors At this stage, businesses have to appoint a third-party auditor, like Flyingcolour Tax, who may examine and report the accounts in compliance with the Compliance Audit in DMCC. Here company must remember one thing: a company is only allowed to appoint an auditor based on its accounts and at the general meeting. The auditor has to be registered and approved by the DMCC. 5. Auditors report to the company. The auditor’s report of the business should mention that the company’s accounts have been audited in compliance with the IFRS. In addition, the report has to reflect the profit or loss of the company for the financial year. Moreover, the report has to state that the company has been involved in the activities permitted per its license or any other compliance issued by the DMCC authority. The audited financial statements along with the DMCC Summary Sheet have to be uploaded on the Company’s DMCC Portal after which a Service Request (SR) will be generated. This SR has to be submitted along with the audited financial statements to the DMCC authorities. Why you should consult FlyingColour Tax? Flyingcolour Tax provides companies with excellent auditing services. We can conduct a deep auditing within your company. Furthermore, our experts aim to ensure your business compliance with the regulation of DMCC Audits. To learn more about Start the Audit Process for my DMCC Company, book a free consultation with one of Flyingcolour team advisors, simply call +971 50 5585305 or send WhatsApp messages to +971 4 4542366. you can also drop an email to info (at) flyingcolour (dot) com. This article was published on 21-02-2024. The information provided in the article is based on the policies and rules applicable at the time of writing it. Talk to one of our consultants for any recent updates or changes.