New restrictions announced for auditors to practice in UAE

The UAE Ministry of Finance has made this clear. Federal Law No. 12 (2014) on the reorganization of the Accounts Auditors' profession will take effect from September 13 this year, top officials said in Abu Dhabi.

 The new regulations include adopting the 'Financial Reporting Ecosystem' model, The Financial Reporting Ecosystem 'connects many important areas and subfields of the profession.  Al-Nuaimi pointed out that in addition to auditing accounts, which include financial, administrative accounting, tax accounting, internal auditing, and judicial auditing, the expansion of the activities and areas of the financial reporting ecosystem will pave the way for the integration of other accounting activities in the future.

 “We are adding new segments.  So, it no longer registers and regulates external auditors, but we will add new jobs to the auditing system: internal, legal, and tax audits.  So, these are the new jobs that our system is going to witness as well.  We hope to add more auditing systems such as ESGs and others.

 The regulation makes the UAE one of the first countries in the world to adopt such a comprehensive model.  In addition, the UAE Fellowship Program will become a requirement for job training in the country.

 Non-Emirates will have different eligibility criteria for practicing auditing based on their years of experience.

From September, citizens who wish to practice auditing but do not have a bachelor's degree relevant to the practice will be required to complete 15 hours of accredited accounting courses and meet certain requirements, including certification, experience, and fellowship requirements.  Complies with the program and other conditions.

 Abdul Aziz Al Nuaimi, Assistant Undersecretary for Commerce at the Ministry of Finance, said the new measures would make it easier for auditors.

 “This regulation will ensure better accounting and financial services in line with the best practices followed globally and will help in dealing with financial irregularities.

 Al Nuaimi said the development of the UAE Fellowship Program will help lead Emiratization in various fields.  Developing a framework for the UAE Fellowship Certificate Program and developing the mechanisms for obtaining it in accordance with high global standards, in collaboration with the relevant authorities, and making it a prerequisite for job training within the country.

 Candidates are required to take one or more tests depending on the area in which he/she wants to practice. Tests will be on accounting and auditing standards, legislation and taxes.

 The Accounting Standards Test is a measure of a candidate's experience in using the International Financial Reporting Standards (IFRS), including all work guides provided by the International Financial Reporting Standards Foundation and the Board of International Accounting Standards.

The Auditing Standard Test seeks to measure a candidate's knowledge of Auditing on International Standards (ISA), including all work guides provided by the International Auditing and Assurance Standards Board.

 It aims to measure the candidate's knowledge of all legislation related to the accounting and auditing profession, including legislation and tax audits, work ethics and ethics, corporate system, tax system, and civil.  Criminal liability related to job training.

 "They do this to connect with what they need to set up their work."

 There will be a complete digital transformation of auditor licensing, regulation, inspection, enforcement, and periodic reporting procedures.

 Al-Nuaimi underlined that the sum total of one million dirhams worth of insurance coverage was canceled and replaced by a one percent system, based on the total annual fees of the office or company employed, if the subsequent cabinet decision is to be issued in detail.  Specific segments will be implemented when the regulation applies.

 "Percentage insurance is another way of allowing auditors to operate in the right environment," he noted.

 In line with the recent amendments to the Commercial Companies Act, the accounting and auditing companies have been repealing the item related to the National Participation Rate, which is estimated at 25 percent of their capital and increasing foreign investment opportunities in the economy of the country.

 In line with global standards, an auditor must have at least 5 years of practical experience after obtaining an educational qualification to practice in the UAE.

Non-Emirati nationals must have at least one year of experience in the UAE, even if they have been out of the country for more than 10 years.  If their experience outside the country is five to 10 years it is 2 years and if their experience outside the UAE is two to five years it is 3 years.

 "This regulation will take effect from September 13, 2022. It will serve as a qualitative addition to a number of tracks that support the UAE's strategy of consolidating the strength of the national economy, making it more flexible and increasing global competitiveness."