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Recent Amendments in Audit Requirements for Financial Institutions in the UAE

March 1, 2025 Comments Off on Recent Amendments in Audit Requirements for Financial Institutions in the UAE

Let us discover the major trends and regulatory requirements shaping auditing in the UAE in 2025. The United Arab Emirates’ progress in economic development and transparency, requires the business to stay updated, ensure compliance and sustain competitiveness.

Jaxa Chartered Accountants is a top auditing firm in the UAE with who are qualified to uphold strict regulatory compliance and detect and prevent financial malpractices with the help of innovative technologies. Our certified auditors at JAXA, UAE, conduct detailed audit services, assisting financial institutions to eliminate risk and enhance corporate oversight. Partner with Jaxa for available unparalleled auditing solutions and specialized expertise in the UAE financial market.

Let us come and learn more about the latest trends and regulatory insight into the UAE business audit landscape in 2025.

UAE’s Financial Institution: Recent audit requirements

The UAE’s financial sector is subject to strict auditing and compliance regulations to ensure financial stability, transparency, and adherence to international standards.

UAE’s Central Bank’s  Financial Reporting and Auditing Regulations Update 2025

The UAE Central Bank has given updates for stricter audit requirements to improve audit quality and ensure compliance and financial transparency in financial institutions in the UAE.

Key Updates:

  • Financial institutions must conduct an external audit in accordance with the guidelines of IFRS and UAE’s Central Bank regulations.
  • With the Board Audit Committee’s recommendation and CBUAE’s approval, every year an external auditor must be appointed.
  • External audit firms in the UAE must be changed every six years through a selection process. External audit partners must rotate every 3 years.
  • Each year the committee must monitor audits, and assess auditor performance, ensuring adherence to revised UAE tax regulations.

Strengthened Anti-Money Laundering (AML) Regulations on Audits in UAE Financial Institutions

UAE’s Financial institutions such as banks must follow stricter AML regulations, requiring robust compliance measures and monitoring audits regularly to combat financial crime-impacting business audits. The UAE’s Ministry of Finance and Central Bank UAE has implemented stricter regulations for the financial industry in the UAE.

Audit implication:

Businesses in the UAE must adhere to strict UAE AML regulations such as Know Your Customer (KYC) protocols and Customer  Due Diligence (CDD) to monitor transactions and comply with UAE Central Bank and Financial Action Task Force(FATF) standards.

Ensuring VAT Audit compliance for UAE financial Institutions

Banks and other financial institutions in the UAE must adhere to the Federal Tax Authority for VAT audit ensuring audits are accurate, and compliant with UAE tax laws.

Key audit requirement

  • Maintain VAT records for 5 years to ensure compliance.
  • Financial institutions must file monthly or quarterly VAT returns based on taxable revenue. Failure to comply with VAT audits can result in hefty penalties.

The Rising Demand for ESG Audit on the UAE financial sector

With the UAE’s increasing focus on global sustainability trends, businesses, and financial institutions are increasing their trend in adopting UAE’s  Environmental, Social, and Governance(ESG) principles into business operations. The UAE’s commitment to ESG compliance is reshaping financial institutions with an aim for sustainable finance initiatives, corporate governance,e and transparency for a greener economy.

In the UAE, the demand for ESG audits is increasing to evaluate corporate responsibility, environmental impact, and governance.

Key considerations:

Regulatory support: UAE regulators provide incentives for ESG-compliant financial institutions to support eco-friendly banking initiatives.

Eco-Financing: Banks in the UAE invest in green projects while ensuring accountability through ESG audits.

ESG compliance: UAE’s ESG audit helps banks achieve sustainability goals while maintaining compliance and preventing financial exposure.

Revolutionizing auditing with AI in the UAE financial sector

AI and data analytics tools are streamlining the audit process in the UAE, making the system more effective and efficient, offering faster and more accurate results with better compliance, especially in the financial industry.

Many financial institutions in Dubai, UAE such as banks are leveraging AI-driven tools such as AI chatbots and virtual assistants, SAS analytics, FICO Falcon, Darktrace Kofax, Tableau, Haptik, Kasisto, Workfusion, and Xero to automate document processing, extract data, detect fraud, and streamline repetitive tasks by minimizing errors.

IFRS Standards and implication on UAE banks

As more sectors in UAE, especially banking sectors, adopt global reporting standards, the relevance of IFRS grows to a new height. Compliance with IFRS standards in the UAE is vital for banks aiming to attract global investors and promote transparency.

Auditors in the UAE play a crucial role in making financial institutions adopt IFRS standards and ensure financial reporting aligns with international standards, especially for those expanding into the global market or working with international partners.

Final Thoughts

As the regulatory framework develops and technology advances; the landscape of business audit in the United Arab Emirates is encountering a significant change by emphasizing accuracy, transparency, and efficiency. Keeping up to date is paramount for businesses to remain compliant and thrive in a competitive market.

Jaxa Chartered Accountantss is a renowned auditing firm in the UAE. As an FTA-approved tax agent, we bring years of experience providing high-quality auditing and taxation services in the UAE to our diverse clients. Our auditing services are tailored to the needs of each business requirement.

Partner with Jaxa for trusted auditing services and ensure excellence in accurate financial reporting requirements. Contact us now for more assistance.

Visit our website for more details. Schedule now for a free consultation