Audit and Assurance

Is Financial Audit Compulsory in RAKEZ?

February 7, 2020 Comments Off on Is Financial Audit Compulsory in RAKEZ?

In recent years, the United Arab Emirates has now considered a breeding ground for businesses from all over the world and has taken up various measures to attract entrepreneurs and people in business from all around the world. The United Arab Emirates is now considered the gateway to the Middle East.

As soon as we think of the UAE, we all picture numerous oil fields, but the government of the UAE has understood the fact that it cannot solely rely on the revenue from the hydrocarbon sector. This is why the UAE government has implemented new laws that will enhance the business environment of the country and ultimately help the economy of the country.

These steps include the implementation of Value Added Tax (VAT), the establishment of various free zones in the country, providing better opportunities, services, and infrastructure to foreign companies, etc. These steps not only allow the incorporation of a company easily but also help the country to attract a number of foreigners to the UAE which in turn helps the economy of the country.

As the government has made the laws more comfortable for foreigners to come into the country and set up a business, there is also a considerable increase in the demand for financial services such as Accounting Services and Audit Services, Tax related services, etc. The recent implementation of Value Added Tax has also helped the government tap into a new source of revenue.

The Ras Al Khaimah Economic Zone

Ras Al Khaimah Economic Zone or RAKEZ is one of the economic zones present in the country which aims to provide world-class services and infrastructure to businesses and help them to grow and reach their maximum potential.

RAKEZ was established in the year 2017 when the decision was taken to consolidate the Ras Al Khaimah Free Trade Zone (RAK FTZ) and the Ras Al Khaimah Investment Authority (RAKIA). This economic zone covers almost 33 million square meters and is considered as one of the largest economic zones in the region. The economic zone caters to the needs of numerous companies, and more than 14,500 companies are situated here.

Need for Auditing in RAKEZ

In recent years, there has been a massive influx of businesses coming into the country for setting up and conducting business, and with the increase in the businesses, there has been a substantial increase in the need for financial services such as Auditing and Accounting. These services not only help a company to understand the current financial standing of the company but also help in planning for the future.

Auditing is an essential process that will allow the management of a company to understand the various bottlenecks of the company and also provide a possible solution for such problems. There are multiple benefits of conducting an audit, such as:

  • Identification of the issues in a company
  • Managing taxes of a company in a better way
  • Discovering any fraudulent activities in the company
  • Preparing a plan
  •  Ease during the winding up of the Business
  • Boost the morale of the management
  • Attract new potential investors

With so many benefits it is very beneficial to avail Auditing services from a reputed and approved auditor in the Ras AL Khaimah Economic Zone (RAKEZ).

Recent Notifications relating to Audit

Recently there have been changes made by the governing authority at Ras Al Khaimah Economic Zone (RAKEZ). These changes made it important for businesses to avail of Auditing services from a professional and reputed source.

According to the recent changes in RAKEZ, all the companies which are licensed by RAKEZ must submit audited financial statements of the company on an annual basis. This will be applicable to both industrial as well as non-industrial clients. These audited company statements must be submitted have to be submitted every year from now on. These documents must be submitted to the customer service representative which is present in the customer representative centres in the economic zone.

If any company fails to provide copies of the audited financial statements of the company, they may face a fine of AED 2,500. In some case, the non-submission may even result in the suspension of all the services provided by the economic zone.

The only exception to this amendment is the auditing of a branch company in RAKEZ. This means that the above-mentioned rule will not be applicable to any branch company in RAKEZ which avail the services of a group auditor. Even though the above rule is not applicable to some of the businesses, it is recommended that the business should get itself audited on a regular basis to understand the financial standing of the company.

It is because of these benefits that it is essential to avail the services of a reputed auditor. Every economic zone has a list of approved auditors. This list contains the names and details of all the auditors which are approved by the management of the free zone. It is possible only by an approved auditor to perform the various audit functions of a company in the free zone.

If you are looking for any such services for your company, you should definitely have a look at the services provided by JAXA Chartered Accountants. JAXA also offers many other financial services such as Accounting Services, TAX and VAT related services and many more. For more details on the services provided by JAXA, Contact Us. We will be happy to help.