Financial Audit Services in ADGM

  • Home
  • Financial Audit Services in ADGM

Financial Audit Services in ADGM: Expert Compliance & Assurance

A financial audit in the Abu Dhabi Global Market (ADGM) is an independent examination of an entity’s financial statements by an ADGM Registered Auditor. Ensuring compliance with the Abu Dhabi Global Market (ADGM)’s financial audit and accounting requirements is mandatory for entities operating within ADGM jurisdiction. A financial audit is a critical process for any organization, regardless of size or industry. By providing assurance about the accuracy and reliability of financial information, audits play a vital role in maintaining financial integrity, enhancing stakeholder confidence, and supporting sound business decision-making.

 As an ADGM-approved auditor, we provide comprehensive audit services tailored to meet the unique needs of businesses in this dynamic environment.

Get a free consultation today!

What is a Financial Audit in ADGM?

A financial audit is an independent examination of an organization’s financial statements by a qualified professional, typically a Certified Public Accountant (CPA) or a Chartered Accountant (CA). Audits in ADGM are conducted under the International Standards on Auditing (ISA) and must adhere to International Financial Reporting Standards (IFRS).The primary goal of the audit is to ensure that the financial statements provide a true and fair view of the business operations and financial condition.

Key Objectives of a Financial Audit:

  • Accuracy and Reliability: The primary objective is to verify that the financial statements accurately represent the true and fair view of the organization’s financial condition. This includes ensuring that all transactions are recorded correctly and that the accounting principles applied are appropriate and consistently applied.
  • Compliance with UAE Regulations: The UAE has specific laws and regulations governing financial reporting. Audits ensure compliance with these regulations, such as the UAE Commercial Companies Law, and minimize the risk of penalties and legal repercussions.
  • Risk Mitigation: Audits help identify and assess potential risks, such as fraud, errors, and irregularities, within the organization’s financial reporting processes. This proactive approach allows management to address these issues promptly and mitigate potential losses.
  • Enhanced Credibility and Trust: A clean audit opinion enhances the credibility and trustworthiness of the organization’s financial statements in the eyes of stakeholders, including investors, lenders, creditors, and regulatory bodies.
  • Improved Decision-Making: Financial audits provide valuable insights into the organization’s financial health. These insights can inform strategic decision-making processes, such as capital budgeting, investment planning, and risk management.

The Audit Process:

A typical financial audit involves several key stages:

  1. Pre-Audit Consultation: Understanding the business and financial reporting requirements, identifying potential areas of risk or non-compliance.
  2. Planning and Risk Assessment: The auditor meets the management team of the entity to discuss the scope of the audit, identifying potential risks, and developing an audit plan.
  3. Testing and Procedures: The auditor will then conduct a series of tests to examine the entity’s financial statements and internal controls, and to gather evidence, including:
    • Inspection: Examining documents and records.
    • Observation: Observing the company’s internal control procedures.
    • Inquiry: Discussing matters with company personnel.
    • Confirmation: Verifying information with third parties (e.g., banks, customers).
    • Recalculation: Checking the mathematical accuracy of accounting records.
    • Analytical Procedures: Analyzing financial data to identify unusual trends or fluctuations.
  4. Reporting: The auditor will then prepare a report that summarizes the findings of the audit. This report will typically include an opinion on whether the entity’s financial statements are fairly presented in accordance with ADGM’s regulatory requirements.The opinion could be:
    • Unqualified Opinion: The financial statements are presented fairly, in all material respects, in accordance with the applicable accounting framework.  
    • Qualified Opinion: The financial statements are presented fairly, except for a specific matter.
    • Adverse Opinion: The financial statements are not presented fairly.
    • Disclaimer of Opinion: The auditor is unable to express an opinion on the financial statements.
  5. Post-Audit Support: Provide insights to enhance your financial processes and prepare for future audits.

Who Needs Financial Audits in ADGM?

In ADGM, a Company is generally required to have its annual accounts audited, unless it qualifies for an audit exemption. However, even if exempt, companies must still file their financial statements with the ADGM Registration Authority (RA).

Audit Exemption Conditions:

  • Small Company: Meets the criteria for a small company under ADGM regulations.
  • Subsidiary Company: Part of a small group of companies worldwide.
  • Dormant Company: No significant transactions or activities during the year.

Obligation to Maintain Accounting Records and File Annual Accounts

All ADGM-Registered Entities Must:

  1. Maintain Accounting Records: Keep accurate accounting records for a minimum of 10 years.
  2. File Annual Accounts: Submit financial statements to the ADGM Registration Authority (RA) for each financial year ending on their designated Accounting Reference Date (ARD).

Regulatory Framework for Financial Audits in ADGM

The regulatory oversight of financial audits in ADGM is primarily managed by the Financial Services Regulatory Authority (FSRA), the independent regulator responsible for supervising financial services activities within the jurisdiction. The FSRA establishes and enforces rules to ensure the integrity and stability of the financial market.

Key Regulatory Components:

  1. Companies Regulations: Governing the incorporation, operation, and dissolution of companies within ADGM.
  2. Audit Regulations: Outlining the requirements and standards for financial audits.
  3. Financial Reporting Standards: Mandating the use of International Financial Reporting Standards (IFRS) for financial statements.
  4. Licensing Requirements: Specifying the criteria for audit firms to operate within ADGM.

Audit Requirements for ADGM Entities

Entities operating within ADGM, including companies, financial institutions, and other regulated entities, are subject to rigorous audit requirements to ensure compliance and financial transparency.

Mandatory Audit Requirements:

  1. Annual Financial Statements: Entities must prepare and submit annual financial statements in accordance with IFRS.
  2. Independent Audit: An external, independent audit must be conducted by a registered audit firm.
  3. Audit Report Submission: The audit report must be submitted to the FSRA and, where applicable, to shareholders and stakeholders.
  4. Filing Deadlines: Specific timelines are established for the submission of audited financial statements post fiscal year-end.

Filing Deadlines

The deadline for filing annual accounts is determined by the company’s Accounting Reference Date (ARD):
  • First Annual Accounts:
    • If the financial year is 12 months or less, accounts must be filed within 9 months of the ARD.
    • If the financial year exceeds 12 months, accounts are due within 9 months of the first anniversary of incorporation.
  • Subsequent Annual Accounts:
    • For private companies and LLPs, accounts should be filed within 9 months of the ARD.
    • For public companies, the filing period is 6 months.
Extensions may be granted by the Registrar for special reasons, but applications must be submitted prior to the original filing deadline.

Choosing the Right Auditor in ADGM

Selecting an appropriate auditor is pivotal for compliance and financial integrity. Engaging a competent auditor not only ensures compliance but also enhances stakeholder confidence in your financial disclosures.

Key Selection Criteria:

  • ADGM Recognition: Ensure the auditor is registered with the ADGM Registration Authority (RA).
  • Industry Expertise: Must understand your sector’s unique challenges and regulatory requirements.
  • Proven Track Record: Choose firms with demonstrated success in ADGM audits.
  • Reputation & Reliability: Prioritize auditors with strong client testimonials and timely delivery history.

Contact Us Today

Schedule a consultation with our ADGM-approved audit team to discuss your specific needs and learn how we help businesses thrive through compliant financial practices.

Guaranteed On-Time Filing – Book Your Stress-Free ADGM Audit