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Enhancing Audit Quality through effective application of Auditing Standards

Dubai Silicon Oasis Authority (DSOA)
Dubai Silicon Oasis Authority (DSOA) is a strategic initiative launched by the government of Dubai in 2004. The free zone was established to provide a platform to promote and facilitate industries based around modern technology. It is situated in the Dubai city with close proximity to important destinations like Port of Jebel Ali, Port Rashid and the Dubai International Airport. It is one of the fastest growing free zones in the UAEandalsoconsidered to be a premier centre for electronic development and innovation in the Middle East as well as globally.

Dubai Silicon Oasis (DSO) is considered to be the only technology park providing both a living and working integrated community in the region. The technology park possesses an advanced utility infrastructure featuring advanced electricity, telecommunications and road networks.

Who is responsible for regulating the DSOA Free Zone?
Companies operating in the DSOA are required to comply with specific rules and regulations established by the free zone authorityin order to continue operating as a licensed business entity within the DSOA.  The authority in the DSOA is responsible for ensuring that the business environment within the DSO free zone is well regulated and controlled.  The free zoneauthority is also responsible for Business structures and formations, renewal of business licenses as well as recording and reporting of financial activities of business entities within the DSOA.The business entities within the free zone are required to comply with some additional requirements when conducting business operations in the mainland outside the free zone.

Typesof businesses in DSOA
A business entitywhich desires to conduct its business activities within the DSO free zone should first register itselfwith the DSOA and obtain a valid business license with regards to the activities it wants to engage in within the DSO free zone. A business entity can establish its legal presence within the DSO by opting for any of the following business structures:

Free Zone Establishment (FZE):It is a legal business entity that can be incorporated by only a single shareholder. The minimum capital required for establishing a FZE within the DSO free zone is AED 1,000,000.

Free Zone Company (FZCO):In order to establish a FZCO in DSO, minimum AED 500,000 is required in capital with one share representing at least AED 100,000 or more. Minimum two shareholders are required to establish a FZCO in the DSO free zone.

Branch of a Company:Any international or local company can establish its branch in the DSO free zone. The branch will only be allowed to conduct business activities that are identical with the activities in which its parent company deals in.

Types of Licensein DSOA

Service License – permits the holding entity to offer specific services mentioned on the license within the DSO free zone.

Trade License – allows the holder to engage in activities related to import, export,storing and distributing specific items mentioned on the license.

Industrial License –permits the license holder to be involved in specific manufacturing activities.

Benefits for Setting up Business Operations in DSO Free Zone

  • No personal and corporate taxes
  • 100% foreign owned enterprise
  • 100% repatriation of capital and profits
  • Low cost of business operations
  • No import and export duties
  • Virtual workplace and warehouse facilities
  • Dedicated business support services
  • State-of-the-art IT infrastructure and facilities
  • Secure and properly controlled environment
  • Access to regional pool of qualified and experienced professionals

External Audit Requirement in DSO Free Zone
Business entities operating within the DSO are required by the DSOA to submit to them their annual financial statements audited by a DSO approved audit firm within four months of the end of their financial year. External Audit is an important requirement for companies operating in the DSO with regards to renewing their business license if they wish to continue as a licensed business entity in the DSO free zone.

Licensed Financial Service Providers & External Auditors in the DSO (Dubai Silicon Oasis) UAE
If your company is in search of an External Auditor then look no further as our Group Audit Firm Nadeem andUmendra Chartered Accountants is approved to perform External Audit of companies operating in the DSO free Zone. Our Audit Firm, Nadeem andUmendra Chartered Accountants and our professionally qualified Auditors work with 100% dedication to provide assurance to the shareholders and stakeholders that the company is conducting its operations efficiently and in compliance with applicable laws and regulations.

Our audit process is streamlined and designed in a manner that displays compliance with all applicable auditing and accounting standards. Our Audit Firm, Nadeem andUmendra Chartered accountants is a licensed service provider in the UAE and is registered to provide External Audit reports in the DSO free zone.

What is External Audit?
External Audit is a process in which an independent auditor evaluates and analyzes the audited company’s financial statements and other business activities and gives an opinion in the Audit report on whether the financial reports of the company give a true and clear picture of its financial standing. The Audit report also provides information regarding company’s other business operations and status of compliance with the free zone rules and regulations.

Auditor Responsibilities
Following are the responsibilities of an Auditor when conducting an External Audit of a client company:

  • One of the basic responsibilities of an auditor is to be independent and also seen to be as independent.
  • The auditor and the audit firm must not have any kind of personal interest in the outcome of the External Audit Assignment.
  • The auditors must possess technical knowledge and skills required to perform External Audit.
  • The auditors must conduct external audit in accordance with the guidance provided by the International Standards on Auditing (ISA).
  • The auditors must have complete knowledge and understanding of the International Financial Reporting Standards (IFRS) along with the nature and type of audited company’s business operations.

Reasons for External Audit Requirement in DSO Free Zone
The main reason for the External Audit requirement is to provide the free zone authority with assurance that businesses are conducting their business operations in compliance with the rules and regulations applicable in the DSO free zone. The Audit report from a DSO approved audit firm also helps in providing the authoritywith information as to whether the financial reports are prepared in accordance with the International Financial Reporting Standards (IFRS) and other applicable regulations.

It is duty of the Dubai Silicon Oasis Authority tosecure the business environment and protect the citizens of the DSO free zone as well as the mainland UAE from inappropriate and illegal business practicesand the External Audit requirement works perfectly well to fulfill this obligation of the DSOA.

Approved Auditors in DSO Free Zone
Audit firms with a valid audit license from the UAE government and that are also registered with the DSOA can provide External Audit services to companies operating within the DSO free zone. The DSO free zone maintains a list of DSO approved auditorsand the name of audit firms mentioned on the list are allowed by the regulating authority in the DSO to perform External Audit of business entities operating within the DSO free zone.

In 2014, specific laws and regulations in the UAE were revisedand as a result, requirements for registered DSO Auditorsbecame much morestrict and rigid.To continue as a licensed service providerin the UAE, Audit Firms must provide proof of providing their employees with opportunities to participate in professional development and training programs. Companies operating in the free zones and the mainland UAE must rotate their auditors every four years to ensure independence of the External Auditors. The Audit firms in the DSO free zone and the mainland UAE must consist of certified and qualified Auditors.

Benefits Associated with External Audit Services in DSO Free Zone
One of the key benefits of conducting an External Audit for a company in the DSO is that it helps in the process for renewing business license which is necessary for companies if they want to continue as a licensed business entity in the DSO free zone. The Audit report provides the company’s shareholders, stakeholders and the free zone authority with assurance that thecompany is managed properly and its business operations are being conducted in compliance with the rules and regulations applicable within the DSO free zone.

An independent External Audit report from an approved audit firm in DSOalsoprovides information to the company’s shareholders and stakeholders as to whether the entity has adopted any kind of inappropriate practice or involved in any kind of illegal activity. An Audit report with favorable details and information not only provides the senior management with sense of security with regards to their jobs but also gives them boost to work even harder for the long-term success of the company and also improves the prospects of the company obtaining loan approval from banks.

How can we help you in Complying with the Requirement of External Audit in the DSOA?
Arqaam Global is a licensed service provider in UAE and is in a strategic partnership with a recognized and reputed Audit Firm of the UAE, Nadeem and Umendra Chartered Accountants which is listed on the DSO approved auditorslist and is also approved to perform Audit of Companies registered in other free zones.Nadeem andUmendra Chartered Accountants is also registered with all the leading banks and financial institutions in the UAE.

In Addition to providing Audit services through our Audit FirmNadeem and Umendra Chartered Accountants, we also provide accounting, business advisory, business consultancy, company liquidation, financial consultancy and tax consultancy services. Our aim is to provide high quality services that also add value to our clients’ overall business operations. To meet this objective, we and our strategic partnerNadeem and Umendra Chartered Accountants have a team of qualified professionals having extensive experience of working in various industries.

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