New regulations for auditors practicing in the UAE have been announced by the UAE Ministry of Economy.
Top officials said during a media briefing in Abu Dhabi that the regulation of Federal Law No (12) of 2014 regarding the Reorganisation of Accounts Auditors Profession will be implemented on September 13 this year. The new regulations include the implementation of the ‘financial reporting ecosystem’ model, making the UAE one of the first countries in the world to do so. In addition, the UAE Fellowship Program will become a requirement for practicing in the country. For non-Emiratis to practice auditing, there will be different eligibility criteria based on their years of experience.
Abdulaziz Al Nuaimi, assistant undersecretary for Commercial Affairs at the Ministry of Economy, noted the new measures will make life easier for auditors to practice in the country.
“The regulation will ensure the provision of the best accounting and financial services in accordance with the best practices followed globally, and will help the country’s authorities in dealing with financial malpractices.”
The ‘financial reporting ecosystem’ will link many of the profession’s core and sub-areas. Al Nuaimi pointed out the expansion of the activities and areas of the financial reporting ecosystem besides auditing accounts to include financial and administrative accounting, tax accounting, internal auditing, and judicial auditing and paving the way for adding other accounting activities in the future.
“We are adding new segments. So, no longer it’s going to be only registering and regulating external auditors but we will be adding new occupations into the auditing system: internal, legal, and tax audits. So, these are the new occupations that our system is also going to certify. We expect to add more auditing systems like ESGs and others.”
UAE Fellowship Programme
The development of the UAE Fellowship Programme, Al Nuaimi said, will help drive Emiratisation in various fields. Development of a framework for the UAE fellowship certificate program and the mechanisms for earning it according to the highest global standards, in cooperation with the relevant authorities, and making it a prerequisite for practicing the profession within the country.
Applicants are required to take one or more tests, depending on the field he/she wishes to practice. Tests will be on accounting and auditing standards, and legislation and taxation.
The accounting standards test aims to gauge the candidate’s familiarity with International Financial Reporting Standards (IFRS), including all work guides issued by the International Financial Reporting Standards Foundation and the International Accounting Standards Board.
The auditing standards test seeks to measure a candidate’s knowledge of International Standards on Auditing (ISA), including all work guides issued by the International Auditing and Assurance Standards Board.
The legislation and taxation test aims to measure the candidate’s extent of knowledge of all issued legislation related to the practice of the accounting and auditing profession, including the rules of conduct and ethics of the profession, the corporate system, the tax system, and civil and criminal liability related to the practice of the profession.
“These are done to associate their work with what’s needed for them to set up.”
Encouragement for citizens
From September, citizens who wish to practice auditing but do not have a relevant bachelor’s degree to practice can do so by fulfilling specific conditions, which include the requirement to complete 15 hours of accredited accounting courses and the requirements of the certificate, experience, fellowship program and meeting other conditions.
There will be a complete digital transformation of auditor licensing, control, inspection, enforcement, and periodic reporting procedures.
Al Nuaimi underlined cancellation of the lump sum of insurance coverage at a value of Dh1 million and replacing it with a percentage system, based on the total annual fees of the office or company practicing the profession, provided that a subsequent cabinet decision is issued to detail the specific segments and will be implemented when the regulation is applied.
“Percentage insurance system is another way to allow auditors to work in the right environment,” he noted.
Then there is the cancellation of the item related to the national participation rate, estimated at 25 percent of the capital of accounting and auditing companies, in line with the recent amendments to the Commercial Companies Law, as well as to increase foreign investment opportunities in the country’s economy.
Five years of experience
In line with the global standards, an auditor must have a minimum practical experience of 5 years after obtaining the educational qualification to practice in the UAE.
Non-Emiratis must have at least a year’s experience in the UAE even if they have more than 10 years outside the country. It’s 2 years if their experience outside the country is between five to 10 years and 3 years of experience outside the UAE is between two to five years.
“The regulation will be implemented starting from September 13, 2022. It will serve as a qualitative addition in a number of tracks that support the UAE strategy to consolidate the strength of the national economy, making it more flexible and enhancing its global competitiveness.”
