Which Companies Require Auditing Services?
There are a number of benefits of Auditing a company, and because of these benefits, every company should be audited. The conducting of an audit of the company will help the management to understand the present condition of the company and will also help in ensuring that the company is following the set path as expected by the management.
This is what should happen in theory. In practical, every country has its own set of rules and regulations regarding the Audit of a company, and not all companies need to be audited according to their rules and regulations.
The United Arab Emirates also has a set of rules for the jurisdiction which needs to be followed by all the companies which have been set up in the country.
Audit in Mainland Companies
According to the Commercial Companies Law, all the companies which have been established and registered in the Mainland United Arab Emirates need to conduct a yearly Audit of their company. for such companies, it is mandatory to maintain financial records for at least five years. The auditing of a company in the mainland is necessary, but not all companies need to submit the audit report to the concerned authorities.
Audit in a Free Zone Company
According to the Commercial Companies Law, the companies which have been established and registered in the free zone do not necessarily need a yearly financial audit with a few exceptions. There is some form of companies which have to conduct a mandatory yearly audit in the Fee Zone and submit the audit report to the concerned authorities of the free zone. These types of companies include Free Zone Companies (FZCO) and Free Zone Establishments (FZE)
In order to understand the above statements, we need to be able to differentiate between a mainland company and a Free zone company.
