Audit Services in ADGM

ADGM Audit Services in Abu Dhabi

Audit Services in ADGM are crucial for businesses seeking regulatory compliance and financial transparency in Abu Dhabi Global Market’s business-friendly ecosystem. This global financial center, rooted in English common law, demands robust IFRS-aligned audits. 

Abu Dhabi Global Market (ADGM) is an internationally recognized financial center and free zone strategically located on Al Maryah Island in Abu Dhabi, UAE. Established in 2013 and fully operational by 2015, ADGM has quickly become a hub for financial innovation, global investments, and regulatory excellence. Offering a business-friendly ecosystem, ADGM caters to startups, multinational corporations, and investment firms seeking to expand their operations in the UAE and beyond.

      Registration Authority (RA): Ensures an efficient, business-friendly registration process aligned with international standards.

  •       Financial Services Regulatory Authority (FSRA): Provides a top-tier regulatory environment, emphasizing fairness, efficiency, and responsiveness.
  •       ADGM Courts: Administers independent courts of the First Instance and Appeal, applying English common law.
  •       ADGM Authority: The authority combines strategic and support functions to enhance ADGM’s community and its services.

Who Needs an Audit in ADGM?

According to the ADGM Companies Regulations 2020 (CR 2020), annual financial accounts must be audited for most companies, unless the company qualifies for an exemption. ADGM provides a business-friendly and internationally recognized environment for various entities to operate with the necessary commercial licenses within its jurisdiction.

Entities That Require Audits:

  • Startups and SMEs
  • Special Purpose Vehicles (SPVs)
  • Retail businesses
  • Subsidiaries and branches of multinational corporations

By understanding the specific requirements of each entity type, RNG Auditors LLP delivers customized audit services that help businesses operate smoothly within ADGM.

Looking for reliable audit services in Abu Dhabi? Our certified professionals offer detailed audits tailored to your needs.
Contact us for a consultation and experience the expertise of trusted industry professionals.

Why is Audit Important?

1. Regulatory Compliance

Meet the requirements of ADGM Companies Regulations 2020 (CR 2020) and maintain adherence to IFRS.

2. Stakeholder Confidence

Transparent and accurate audits build trust among investors, partners, and other stakeholders, enhancing your business’s credibility.

3. Risk Mitigation

Identify and address potential financial and operational risks early, preventing them from escalating into significant issues. Identify vulnerabilities and prevent financial discrepancies.

4. Operational Efficiency

Gain valuable insights into your financial processes, enabling you to streamline operations and improve overall performance.

All ADGM-registered entities, unless exempted, must prepare annual financial statements audited by ADGM-registered auditors in compliance with ADGM’s regulatory standards and IFRS.

Schedule a Consultation

Would you like to schedule a consultation with our experts at RNG Auditors LLP? Contact us today to learn how we can support your audit and compliance needs.

Key Considerations for ADGM Compliance

Special Purpose Vehicles (SPVs)

  • Group Accounts Preparation: SPVs holding control over subsidiaries not qualifying for small company exemptions must prepare consolidated group accounts in accordance with IFRS 10: Consolidated Financial Statements.
  • Audit Requirements: Engage an ADGM-approved auditor to conduct thorough group audits.
  • Reference: See Section 389 of Companies Regulations 2020 for detailed guidelines.

Consolidation Exemptions

  • Eligibility: Entities may claim exemption from preparing consolidated financial statements if their ultimate or intermediate parent is listed on a recognized stock exchange.
  • Criteria: Must meet the exemption criteria outlined in Section 390 of Companies Regulations 2020.

Ineligible Groups

  • Requirement: Entities part of an ineligible group (e.g., financial institutions, public interest entities or PIEs) must audit and file their accounts with the RA, even if they meet the small company thresholds.
  • Guidance: Refer to Section 371 of Companies Regulations 2020 for compliance details.

Standalone Exemptions for Subsidiaries

  • Exemption Criteria: A subsidiary is exempt from auditing its individual accounts if its parent entity is established under ADGM law and meets the conditions outlined in Section 452A of Companies Regulations 2020.

Migrated Entities

  • Continuity of Operations: When a company migrates into ADGM, it retains its existing financial year and continues operations without creating a new entity, ensuring seamless regulatory compliance.

Our ADGM Audit Services

Statutory Audits

A statutory audit is an independent assessment of a company’s financial statements conducted by an approved auditor. Its purpose is to:

  • Ensure financial statements align with applicable financial reporting standards, such as IFRS.
  • Provide a true and fair view of the company’s financial health and performance.

Our audits ensure compliance with ADGM’s legal and regulatory requirements, providing stakeholders with a transparent and accurate view of your financial health.

  • Compliance with IFRS Standards
  • Detailed Financial Analysis
  • Transparent Reporting

Internal Audits

Evaluating internal controls, risk management processes, and operational efficiency. Our internal audit services identify areas for improvement, ensuring your business operates optimally.

  • Risk Assessment
  • Control Evaluation
  • Operational Efficiency Reviews

Compliance Audits

Verifying adherence to ADGM’s regulatory framework. We assist in ensuring your business meets all financial, operational, and legal obligations, safeguarding against potential compliance issues.

  • Regulatory Compliance Checks
  • Policy and Procedure Reviews
  • Corrective Action Recommendations

Special Purpose Audits

Tailored audits for specific business objectives such as mergers, acquisitions, or financial restructuring. Our specialized audit services provide comprehensive financial oversight tailored to your unique needs.

  • Due Diligence Audits
  • Merger and Acquisition Audits
  • Financial Restructuring Audits

Financial Reporting and Advisory

Preparing and filing accurate financial reports with the ADGM Registration Authority (RA). Our experts ensure your reports comply with ADGM’s reporting standards, providing actionable insights for financial improvement.

  • Financial Statement Preparation
  • Regulatory Reporting
  • Advisory Services for Financial Strategy

From statutory audits and internal audits to specialized services like forensic audits and due diligence, RNG Auditors LLP offers a comprehensive suite of audit services in Abu Dhabi. Contact us today to discuss your audit needs and experience the difference of working with a leading audit firm in the region.

Benefits of Hiring ADGM Registered Auditors

✔ Compliance Assurance

Ensures adherence to ADGM’s stringent regulatory requirements, minimizing the risk of non-compliance and associated penalties.

✔ Financial Transparency

Promotes accurate and transparent financial reporting, enhancing stakeholder trust and confidence.

✔ Professional Expertise

Leverages the knowledge and experience of auditors well-versed in ADGM’s legal and regulatory landscape.

✔ Market Confidence

High-quality audit practices strengthen your business’s reputation, fostering greater investor and market confidence.

✔ Strategic Insights

Provides valuable recommendations to optimize financial performance and operational efficiency.

✔ Cost Efficiency

Prevents costly errors and penalties through meticulous audit processes and compliance checks.

✔ Enhanced Decision-Making

Detailed financial analysis and reporting empower informed strategic decisions, driving business growth.

Data Point

Companies that undergo regular audits report a higher rate of stakeholder trust and increase in operational efficiency.

The ADGM Audit Process

1. Initial Consultation and Assessment

Understanding Your Business: We begin by reviewing your business operations, financial records, and specific audit requirements.

Audit Strategy Planning: Identify key audit areas and develop a customized audit strategy tailored to your business needs.

2. Detailed Financial Review

Examination of Financial Statements: Scrutinize your balance sheets, income statements, cash flow statements, and equity changes, along with notes to accounts.

Transaction Analysis: Review financial transactions and supporting documentation to ensure accuracy and compliance.

Internal Controls Assessment: Evaluate your internal controls and risk management processes to identify potential areas of improvement.

3. Reporting and Compliance Assurance

Audit Findings Compilation: Compile comprehensive audit findings, highlighting discrepancies, compliance issues, and areas for enhancement.

Recommendations: Provide actionable recommendations to address identified issues and improve financial practices.

Final Report Submission: Issuance of an Auditor’s report, which is required to be submitted to ADGM by the Company along with the Directors’ report, Financial statements, and Notes to Financial statements.

Regulatory Requirements in ADGM

1. Statutory Audits

ADGM mandates statutory audits for most entities unless exempted under specific conditions, such as being a small standalone company or dormant company. RNG Auditors LLP ensures your financial statements are audited to the highest standards.

2. Audit Exemptions

Entities eligible for exemption must meet criteria defined under CR 2020, including turnover thresholds and group size. Our experts help determine your eligibility and file compliant statements.

3. Maintaining Records

All ADGM entities are required to maintain accounting records for a minimum of 10 years, ensuring transparency and regulatory compliance.

4. Filing Deadlines

Annual accounts must be filed within six months for public companies and nine months for private companies of the Accounting Reference Period. If the relevant accounting reference period is the company’s first and is a period of more than twelve months:

  • Public companies: six months from the first anniversary of the incorporation of the company or three months after the end of the accounting reference period.
  • Private companies: nine months from the first anniversary of the incorporation of the company or three months after the end of the accounting reference period.

Choosing the Right Audit Firm for Your ADGM Entity

Criteria for Selection

ADGM Registration: Ensure the auditor is registered and authorized by the ADGM RA, demonstrating their legitimacy and compliance with regulatory standards.

Experience and Expertise: Look for firms with a proven track record in auditing within ADGM, possessing deep knowledge of local regulations and industry practices.

Comprehensive Services: Choose firms that offer a wide range of audit and advisory services tailored to your business needs, from statutory audits to specialized financial reviews.

Client Support: Prioritize firms that provide excellent client support, clear communication, and a collaborative approach throughout the audit process.

Questions to Ask Potential Auditors

What is your experience with audits in ADGM? Understand their familiarity with ADGM’s regulatory environment and their success in handling similar audits.

How do you ensure compliance with ADGM’s audit regulations? Assess their methodologies and strategies for maintaining compliance and addressing regulatory changes.

Can you provide references from other ADGM-registered clients? Gain insights into their reliability and the quality of their audit services through client testimonials.

What is your approach to handling audit discrepancies or compliance issues? Evaluate their problem-solving capabilities and commitment to addressing and resolving audit findings effectively.

What Are ADGM Economic Substance Regulations (ESR)?

ADGM Economic Substance Regulations (ESR) require any ADGM licensee conducting one or more “Relevant Activities” (such as banking, finance, or holding-company operations) and earning income from those activities to demonstrate adequate economic presence in the UAE. Entities must meet the Economic Substance Test by maintaining sufficient staff, expenditures, and physical operations within ADGM to avoid penalties.

Which Businesses Must Comply with ESR?

ESR-Compliant Activities

  • Banking
  • Insurance
  • Investment Fund Management
  • Lease-Finance
  • Headquarters
  • Shipping
  • Holding Company
  • Intellectual Property
  • Distribution and Service Centre

Filing Obligations

Any ADGM-registered entity conducting these activities may need to file annual ESR notifications and reports to ensure compliance with Economic Substance Regulations (ESR).

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