External Audit

For most mainland LLCs and the great majority of free zone entities, yes. Mainland companies registered under the UAE Commercial Companies Law generally must prepare audited financial statements, and most free zone authorities (JAFZA, DMCC, RAKEZ, IFZA, Meydan, ADGM, DIFC, RAK ICC, Ajman, and others) require an annual audit by an approved auditor as a condition of licence renewal. A small number of free zone categories or dormant-entity exceptions exist, but these should be confirmed in writing with the specific authority rather than assumed.

Many UAE free zone authorities maintain an approved auditor panel and will only accept audited financial statements from a firm on that list. This is separate from the firm's general UAE audit licence — an otherwise properly licensed firm can still be rejected at renewal if it is not on that specific free zone's current panel.

An external audit covers the complete set of financial statements as a whole and is designed for general reliance by shareholders, the licensing authority, and the tax authority. A special purpose audit is scoped narrowly to one defined account, figure, or question — like a net worth certificate — for one named recipient, under ISA 800/805 rather than the full ISA suite applied to complete financial statements.

Audited financial statements are the primary evidentiary basis most Taxable Persons rely on for their Corporate Tax return filed with the Federal Tax Authority. Corporate Tax under Federal Decree-Law No. 47 of 2022 applies at 0% on taxable income up to AED 375,000 and 9% above that threshold, with Qualifying Free Zone Persons potentially eligible for 0% on qualifying income subject to conditions — audited statements are standard supporting evidence for that qualifying-income analysis.

A straightforward single-entity company with clean, complete records typically takes four to six weeks from engagement letter to signed opinion. Multi-entity groups, businesses with material inventory or related-party complexity, or a first-year audit with weak opening records generally take six to ten weeks.

Fieldwork covers vouching of transactions to supporting documents, recalculation of balances, external confirmation of bank and material third-party balances, analytical review comparing figures against expectations and prior periods, physical observation of inventory counts where inventory is material, and review of related-party transactions, contracts, and disclosures — all scaled to the risk areas identified during planning.

An unmodified (clean) opinion means the financial statements present a true and fair view with no material issues. A qualified opinion flags one or more specific matters that are material but not pervasive. An adverse opinion states the statements are materially misstated as a whole. A disclaimer of opinion means the auditor could not obtain sufficient evidence to form any opinion at all.

Consequences depend on the specific free zone or DED category but can include late renewal penalties, a temporary hold on licence activities, or difficulty renewing related visas tied to the licence. This is why PNPC plans the audit calendar backward from the actual renewal date rather than treating the financial year end as the only relevant deadline.

Yes. PNPC operates from Chennai, Bangalore, Hyderabad, and Dubai, and for cross-border groups we coordinate the UAE statutory audit with any equivalent Indian audit requirement, keeping accounting policies, related-party disclosures, and reporting dates consistent across both jurisdictions rather than run as unrelated engagements by separate advisors.

A first-year (inaugural) audit needs particular attention to opening balances — since there is no prior audited year to rely on — and to establishing accounting policies and a documented basis of preparation that all future audits and Corporate Tax filings will build on.

We obtain a professional clearance letter from your outgoing auditor, verify opening balances rigorously against the prior audited financial statements, and plan the new engagement's timeline against your actual renewal date from the outset, so switching firms does not itself cause a delay.

Yes. Alongside the audited financial statements and auditor's report, we issue a separate management letter setting out control observations and process recommendations identified during the audit that fall outside the financial statements themselves — segregation of duties gaps, system access weaknesses, or documentation practices worth tightening.

We verify the entity's VAT registration status and Tax Registration Number with the Federal Tax Authority via EmaraTax and cross-check VAT return filings against reported revenue during fieldwork — VAT is charged at the UAE's standard rate of 5% unless a specific zero-rating or exemption applies, and mandatory registration applies above AED 375,000 in taxable supplies (voluntary registration from AED 187,500).

Full compliance with the IESBA International Code of Ethics for Professional Accountants applies to every statutory audit engagement, including independence in fact and appearance. We assess independence before accepting any appointment and decline engagements where an existing relationship or conflict of interest would compromise that independence.

We request a related-party transaction schedule covering intercompany balances, director or shareholder loans, and management fees, then test these against underlying agreements and evidence of arm's-length terms, since related-party balances are both a UAE Corporate Tax transfer-pricing consideration and a routine audit disclosure requirement under IFRS.

Yes — we review the fixed asset register, test additions and disposals during the year against supporting invoices and disposal documentation, and verify depreciation policies are applied consistently with the entity's stated accounting policy and IFRS requirements.

Where inventory is material to the balance sheet, we attend and observe the physical inventory count (or a cycle count, depending on the entity's own count methodology) as part of the audit evidence for existence and condition, in addition to testing valuation under IAS 2.

We review lease agreements for office space, warehouses, vehicles, and equipment to confirm right-of-use assets and lease liabilities are recognised and measured correctly under IFRS 16, including the discount rate applied and the treatment of any lease modifications during the year.

Incomplete bank statements, an unreconciled trial balance, missing supporting invoices for material transactions, and an outdated fixed asset register are the most common causes of delay. Bank balance confirmations, which the auditor must obtain directly rather than accept from client copies, are also frequently the longest lead-time item.

In most cases yes, provided records are reasonably complete and third-party confirmations can be obtained quickly — we prioritise time-sensitive renewal-driven audits and are transparent upfront about what is genuinely achievable given the evidence available, rather than accepting an unrealistic deadline and discovering the problem later.

Yes — we plan the audit to complete well ahead of the Corporate Tax return deadline, which generally falls within nine months of the financial year end under Federal Decree-Law No. 47 of 2022, so the return is filed on final audited figures rather than provisional numbers that later need reconciling with the auditor.

Cost depends on the entity's size, transaction volume, complexity (inventory, related parties, multiple revenue streams, group structure), and the state of the underlying accounting records. PNPC agrees a fixed fee in writing after the scoping call, once these factors are understood, rather than quoting from a generic price list.

We discuss every proposed adjustment with management, seek supporting evidence for management's position, and document the resolution — where management provides credible evidence, the adjustment is revised; where it does not, the adjustment stands and is reflected in the final financial statements or, if material and unresolved, in a qualified opinion.

Yes. We retain the full working paper file — planning documentation, evidence obtained, and the basis for the opinion — per professional record-retention standards. Given the UAE Corporate Tax record-retention requirement under Federal Decree-Law No. 47 of 2022, which requires Taxable Persons to keep relevant records for at least seven years after the end of the relevant tax period, we align our own retention practice to that same window for audit files that support a Corporate Tax position.

PNPC Global has run statutory audit engagements since 1986 across India and the UAE, combining deep technical grounding in IFRS and ISA-based audit methodology with practical experience across trading, services, manufacturing, and holding structures common in the UAE market, plus panel presence with major free zone authorities.

Free zone authorities periodically update their approved auditor lists and submission formats. If a change occurs between engagement acceptance and report issuance, PNPC reconfirms panel status and adjusts the final report format before submission so the change does not cause a rejection.

Yes — the audited financial statements prepared for licence renewal are generally the same set relied on for the Corporate Tax return, provided the financial year end aligns with the tax period. We prepare one set of statements designed to satisfy both purposes rather than producing separate versions.

Each licensed entity generally needs its own audit scoped to its own trade licence and financial statements, even where they share common ownership or management. We scope multi-entity engagements together for efficiency and consistency but issue separate opinions per legal entity, unless formal consolidation is required.

We review payroll records and WPS reports as part of testing payroll-related liabilities and expense completeness, but a full WPS compliance review is a distinct MOHRE-facing exercise, not a substitute for or a component of the audit opinion itself.

We retain the working paper file supporting the figures used in the return and can assist in responding to a Federal Tax Authority query with reference to the audit evidence already gathered, since the return was built on the audited figures in the first place.

Where a UAE subsidiary's financial statements feed into a parent's group audit conducted by another firm, we coordinate as the component auditor — sharing our audit approach, materiality, and key findings with the group auditor under the group audit standards, while still issuing our own UAE statutory opinion.

We issue a fresh engagement letter each year confirming scope, reporting framework, materiality basis, and timeline, even for long-standing clients, because entity circumstances, applicable standards, or fee terms can change year to year.

The audit is planned against your entity's actual financial year end as registered with the licensing authority, whatever that is — many UAE entities use a non-calendar year end aligned to their group's reporting date or their original incorporation date.

Yes. A holding company's audit focuses on the carrying value of investments, any impairment considerations, intercompany balances and guarantees, and — where required — consolidation of subsidiary results, rather than trading transactions, but it is still a full statutory audit, not a lighter-touch exercise.

We treat the engagement as effectively a first-year audit with additional opening-balance risk, applying extended procedures to establish confidence in the opening position before relying on it — this typically requires closer cooperation from management and more time than a standard recurring audit.

Where a Golden Visa or investor-category visa application requires audited financial statements as evidence of a qualifying investment or business activity, we issue the statutory audit in the standard format required, and can advise on any additional certification the specific visa category needs — though the visa application itself sits with immigration authorities, not the audit engagement.

We review the terms of any government grant or subsidy received, confirm its accounting treatment and disclosure are consistent with the applicable IFRS requirements, and check any conditions attached to the grant that could affect recognition timing.

No — where PNPC or an affiliated team has prepared the underlying bookkeeping, we manage this through appropriate safeguards or, where independence would genuinely be compromised, decline the audit engagement and refer the client to an unrelated firm, consistent with IESBA independence requirements.

A UAE branch of a foreign company is generally still subject to its own UAE audit and licence renewal requirements as a registered establishment, even though it is not a separately incorporated legal entity — the audit scope covers the branch's UAE-recorded transactions and balances.

We do not backdate an audit report. Where a genuinely new matter comes to light after the report date, we follow the applicable ISA subsequent-events procedures (ISA 560) to determine whether the report needs to be reissued with a revised date and appropriate disclosure, rather than simply altering the original date.