Types of Due Diligence in UAE:

Below are the most common types of due diligence audit in the UAE:

Financial due diligence

Financial Due Diligence is a detailed review of existing accounting practices, transaction data, cash flow, historical trade results, or a company’s balance sheet. It helps verify the financial risk and prediction of the firm. Further, it also includes the funding requirements of a business.

Commercial Due Diligence

Commercial due diligence will uniquely evaluate the different commercial factors. These include analysis of competitors, target market research, service reviews, feedback, and information the customer wants to know.

Operational Due Diligence

The operational due diligence includes the evaluation of non-financial factors of an organization. Dubai auditors conduct this Audit to evaluate business processes, internal procedures, performance testing of the management, and HR procedures.

Legal Due Diligence

It helps examine any legal risk or threat included with the organization. Further, it evaluates legal clashes with local entities, competitors, or employees.

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Benefits of Due Diligence in UAE

  •  Firstly, due diligence is considered essential for every business deal. It is between two different businesses or between a company and a client.
  • Secondly, it assists in identifying the real significance of the target company. While it saves the organization from making the wrong investment, so helps in facing losses. It overviews the financial and operational details of the firm. Hence, delivering the idea to the customers regarding the company’s economic growth.
  • Moreover, there are many compliance requirements linked with it. However, it is also essential to remain compliant with any anti-bribery laws. In addition, it is also significant to assure anti-money laundering compliances and counter-terrorist funding.
  • Furthermore, it facilitates customers’ reliability and has delivered accurate information. Hence, it confirms that it does not exploit a business by getting used for criminal acts.
  • In general, it helps in evaluating the sustainability of a transaction. Hence, acknowledging the skills and expertise of employees of the target market considers the technological framework of the organization. In other words, it is creating teamwork between the companies to get the primary goal.
  • Last but not least, it is a risk management tool for companies to enter a business transaction. Moreover, it promotes an informed decision and avoids damage in the future
Benefits of Due Diligence in UAE
Benefits of Due Diligence in UAE

How do we assist?

  • Firstly, A E Y Auditing is a fully operationalized audit firm in UAE. We uniquely provide all types of due diligence services to assist you in making the right decision. It further facilitates acquiring an organization in the UAE without facing post-transaction trouble.
  • Secondly, we encourage our clients to identify hidden risks and highlight the main complexities. Hence, deliver valuable information on the transaction.
  • Thirdly, we have an approach for each entity transaction. It will notably increase value and provide a quality work product on time.
  • Moreover, our expert team has valuable and significant experience. So, we advise clients on a full breadth of complexities, from minor negotiating points to significant deal-breakers.

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FAQs Of Auditing

The general requirement of a business in the UAE is to maintain its records for not less than (5) years. The Commercial Company Law makes it mandatory for all companies in the mainland.

According to UAE Commercial Company Law, every company needs to have auditors to audit their book of accounts. Under Federal Law no. 2 of 2015, Article 27, a licensed auditor is mandatory. Ministry of Economy in the UAE must approve it.

Dubai Financial Services Authority registers well-known auditors. Therefore, it may appoint them to examine and report accounts of regulated DIFC entities.

However, if your company is usually free from an audit, you need an audit if your shareholders ask so. The shareholders must own at least 10% of the shares. Shares can be particularly on an individual or group level. 

If you are an entrepreneur in Dubai, it is essential to get an audit. It’s significant because it assures that your company records are reliable and in order. Auditors in Dubai, while conducting audits, examine internal controls of a company. All of the sudden, they also inspect the existing system, coupled with the financial statement.

Yes! IFRS standards are mandatory by the UAE Commercial Company Law No 2 of 2015. Listing rules of NASDAQ Dubai, Dubai Financial Market PJSC, Abu Dhabi Securities Exchange, and especially Dubai Financial Services also demand it.

(5) years.

You can notably become an FCCA once you have a continuous membership of 5 years with ACCA. Further, you must meet CPD requirements of paying annual subscriptions every year.

Once you file the return, the IRS usually starts these audits within a year. Within particularly six months, they lead to completion. However, expect a delay if you do not deliver the complete information. In fact, we also expected the delay if the auditor finds issues and wants to expand in other years or areas.

The mandatory documents by management are as below:

  • Firstly, accounting reports with trial balance, balance sheet, ledgers, income statement, and relevant schedules
  • Secondly, copies of vouchers, invoices, receipts, and bills
  • Thirdly, a list of bank accounts used for transactions and forgeries of bank statements
  • Moreover, maintained reports of all the payroll functions of a business.
  • Further, copies of legal documents of the business
  • Verifications from clients, suppliers, associated entities, etc.
  • Above all, evaluate related parties and transaction examinations with related parties.
  • Firstly, it helps accomplish business objectives. It will fix company weakness in all ways.
  • Secondly, auditors in Dubai significantly facilitate identifying loopholes and risks in the financial report of your company.
  • Thirdly, it boosts credit rating and valuation. You open doors for foreign investors and get the best financial position by calling an audit service.
  • Moreover, it reveals the overall picture of your business. You can further focus more on your company’s strengths, weaknesses, opportunities, and threats once you have a clear vision.
  • Firstly, we follow our services’ highest professional ethics and quality level.
  • Secondly, our company has a fast-growing team of qualified & dedicated professionals.
  • Thirdly, you get new opinions to look at your business through Business Analysis, Creative Insight & Industry Benchmarking.
  • We act as a Sounding board for crucial financial decisions and significantly provide dependable strategic leadership through our experience and knowledge.
  • A E Y Auditing LLC is a UAE-registered auditing firm providing cost-effective value-added solutions to meet all your business needs.

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