kgrnaudit
Leading Audit & Accounting Firms in Dubai, UAE
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Penalties for Failure to Comply with ESR in UAE
Administrative fines were established for a number of Economic Substance Regulations violations by Cabinet Resolution No. 57 of 2020. (ESR). The revised resolution has increased the number of fines for violations committed by both Licensees and Exempted Licensees. Giving incorrect information, failing to submit an ESR report and notification, and failing the UAE's economic substance test are the three main violations.
The severity of the fine serves as a reminder to businesses to consult qualified ESR experts in the UAE before submitting notices and ESR Reports. Businesses should be cautioned by the following list of administrative fines under the Economic Substance Regulations:
Criminal penalties and fines for not informing
A Licensee or Exempted Licensee who fails to file an Economic substance regulations notification in the UAE is subject to pay an administrative penalty of AED 20,000, per Article 13 of Cabinet Resolution No. 57 of 2020 addressing economic substance requirements. If the National Assessing Authority concludes that the entity has committed the violation, it will inform the entity of the penalty.
Call +971 45 570 204 or send an email to [email protected] with any questions.
Penalties will apply if an economic substance report is not submitted.
In accordance with Article 14 of Cabinet Resolution No. 57 of 2020, entities that fail to submit the Economic Substance Regulations Report and any relevant information or documentation required to be submitted in accordance with the provisions of the Cabinet Resolution No. 57 of 2020 concerning Economic Substance Requirements will be subject to an administrative fine of AED 50,000.
According to Article 14 of Cabinet Resolution No. 57 of 2020, a corporation will be subject to an administrative fine of AED 400,000 if it violates the same law in the fiscal year that immediately follows the fiscal year in which the violation was initially committed. To avoid further financial loss in the form of penalties, it is preferable to seek the advice of the top ESR specialists in Dubai.
Penalties May Apply If You Fail the Economic Substance Test
To engage in a Relevant Activity, companies based in the UAE must pass the Economic Substance Test. But for the first year, failing the Economic Substance Test for each financial year will result in a punishment of AED 50,000, as stated in Article 14 of Cabinet Resolution No. 57 of 2020. A repeat of the same violation in the subsequent Financial Year, however, will result in an administrative punishment of AED 400,000, in accordance with Article 14 of Cabinet Resolution No. 57 of 2020.
Call +971 45 570 204 or send an email to [email protected] with any questions.
Financial penalty for providing misleading information
The Regulatory Authority should receive correct information and pertinent documentation from both Licensees and Exempted Licensees. Organizations that submit fraudulent information and fail to acknowledge the inaccuracy despite knowing about it will be penalised AED 50,000, according to Article 15 of Cabinet Resolution No. 57 of 2020. The National Assessing Authority will inform the entities of the fine as soon as it becomes aware of the violation.
Contents of the penalty notification
After the National Assessing Authority determines that a Licensee or Exempted Licensee has violated an ESR rule, a notice will be issued to the violators. The Authority will give violators the following information:
The Licensee or the Exempted Licensee breached the law in the applicable financial year, according to the National Assessing Authority.
the grounds for imposing the ESR administrative penalty
The financial penalty assessed administratively against the company
The administrative penalty's start date ( not less than 30 business days after the issue of notice)
The ability to contest an administrative penalty
According to Article 17 of the Cabinet Resolution 57 of 2020, a Licensee or an Exempted Licensee may challenge the administrative penalty imposed by the National Assessing Authority.
Call +971 45 570 204 or send an email to [email protected] with any questions.
The following justifications are permissible for the appeal:
The company has not broken the law.
The fine imposed is excessive given the offence
The Authority will be penalised more severely than what is allowed by the Resolution.
The National Assessing Authority will release a ruling outlining the procedure for submitting an appeal against Economic Substance Regulations fines in the UAE. The resolution will specify the steps for filing an appeal, as well as further measures for examining a penalty and deciding whether to file an appeal.
What Can KGRN Do to Help You Avoid ESR Sanctions?
Businesses that come under the licensee and exempt licensee categories should exercise caution because to the harsh administrative penalties connected to the UAE's Economic Substance Regulation. Failure to submit an ESR notification or report, failing the Economic Substance Test, and submitting false information are the principal violations that result in fines under ESR in the UAE.
Given the severity of the penalty, businesses should try to avoid penalties in the first place rather than submitting an appeal after they have been imposed. Consultation with leading ESR authorities in the UAE, like as KGRN Chartered Accountants, is your best bet for avoiding fines.
The highly qualified auditors and business setup specialists that KGRN hires are familiar with the ESR laws. In order to comply with the Economic Substance Regulation UAE and avoid fines and other sanctions, KGRN assists enterprises. In order to help enterprises, KGRN evaluates whether they can pass the UAE Economic Substance Test, provides recommendations if they can't, and helps them submit their annual ESR Notification and ESR Reports appropriately.
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UAE’s National ICV Program
Getting an In-Country Value (ICV) accreditation has become one of the most important prerequisites for running a successful business in the UAE. The ICV initiative was initially implemented in Abu Dhabi by the Abu Dhabi National Oil Company (ADNOC) in 2018 to support emiratization, GDP diversification, and strategic considerations. The Ministry of Industry and Advanced Technology (MoIAT) 2021 later directed the program's availability to the entire nation in 2021. The provider has the opportunity to obtain bids from governmental and semi-governmental organisations through the UAE's National ICV programme.
If the vendors obtain an ICV certificate in the UAE, they will be given a certain weighting when the tenders are evaluated. The most recent audited financial reports and other factors are utilised to determine how much each supplier contributed to an ICV certificate. Suppliers can get through the process' challenges by consulting with Dubai's ICV certification services.
Learn More: UAE’s National ICV Program
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DMCC Approved Auditors
DMCC
Dubai Multi Commodities Center is referred to as DMCC. One of the biggest and most well-known free zones in the UAE is this one. It is situated in Dubai's Jumeirah Lakes Towers neighbourhood. More than 14,000 enterprises call DMCC home. It does not only focus on activities involving commodities. Even if your company works in other industries, such as IT, consulting, investments, petroleum, engineering, events, and many more, you can still find a profitable business venture. This blog will teach you about DMCC-approved auditors and how they may help you audit your DMCC-based company.
To know more click: DMCC Approved Auditors
Are Audits Required for DMCC Companies?
When it comes to starting a business, DMCC offers a lot of benefits, including several licence kinds, adaptable office layouts, and straightforward business formation procedures. However, companies in the DMCC Free Zone are required to have registered and accredited auditors with the DMCC Authority audit their books of accounts.
Within 90 days of the end of the fiscal year, each DMCC Company must upload the audited financial statements and summary sheet to the DMCC portal. The authorities may occasionally extend the time limit.
In addition to the original documents, the DMCC Authority has the right to seek more paperwork at any moment during the procedure.
To know more click: DMCC Approved Auditors
What will happen if audits are not conducted on DMCC companies?
According to the DMCC Company Regulations, a company will be fined if it doesn't submit financial statements audited by DMCC approved auditors within 90 days of the fiscal year's end. Additionally, there is a chance that the trade licence for DMCC will not be renewed.
To know more click: DMCC Approved Auditors
KGRN’s DMCC approved auditors will assist you in identifying the risks associated with business operations. As a leading auditing firm, we provide the services of our experienced chartered accountants to help your company’s corporate governance practices improve and add value.
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how to conduct an audit of financial statements
Financial audits are a serious matter. Cash and its right use might represent the pivotal moment for your business, as everyone in business will attest. In the unlikely event that you are traded on an open market company, prudent money management can prevent you from going to jail.
Financial audits are a serious matter. Cash and its right use might represent the pivotal moment for your business, as everyone in business will attest. In the unlikely event that you are traded on an open market company, prudent money management can prevent you from going to jail.
Financial audits are therefore fundamental—and occasionally startling. Financial summary Audits: How to Make Your Next Audit Your Best is a companion article to this manual. By defining terms and outlining the many sorts of audits (including coordinated audits) along the way, it will guide you through the concept of a financial audit.
You will next learn the purpose of an audit and why it is important at that stage. Next, we discuss the auditing procedures used by inspectors and learn more about the examiners themselves. You'll learn how to read an audit report, interpret it, and prepare for one while also allocating time and resources. Discover advice from experts in the field as well as a free agenda to help you get preparing.
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How to prepare for an audit of your financial statements
How should you get ready for a financial statement audit?
Your annual audit can be made to be a simple process that accomplishes the intended task of assisting in the accuracy of your financial guarantee statements and the soundness of your financial disclosing frameworks through planning and communication. To get you started, consider the following advice:
1. Reconcile each and every significant account, including but not limited to financial, sales records, stock, creditor liabilities, and accrued expenses. By far, this is the most important step you can do in preparing for your financial summary audit. The majority of changes discovered during audit hands-on work are related to unprepared compromises. Additionally, it is crucial to make sure you have assistance for any significant helpful items.
2. Reconcile value account modifications, such as new value understandings and modifications to existing understandings. This agreement will ensure that all changes to the value accounts throughout the fiscal year are accurately recorded and shown in the financial reports.
3. Compile new understandings or perhaps modifications to earlier agreements made during the year, such as those relating to working, paying rent, obligations, and so forth. These understandings will be used to draw up the commentary to your financial reports and will be audited by your auditor during practical job audit systems.
4. Update PP&E plans - Even if your bookkeeper calculates your degradation, compiling a list of the benefits you've bought and sold over the course of the year will make it easier. Make sure your PP&E synopsis includes dates, amounts, and precise descriptions of all benefits acquired and sold throughout the fiscal year.
5. Verify that you are pursuing strategic financial management in accordance with the new IRS regulations.
6. Compile and organise a list of all associated gathering trades, such as contracts, purchases, leases, and so on. Your auditor will evaluate these interactions as part of practical audit firms in Dubai techniques, and they will be utilised to establish any crucial references inside your financial reports.
7. Identify and share with the audit group any significant changes to business tasks and/or bookkeeping practises from the previous year audit (if relevant). It will ensure the audit goes smoothly if you can proactively address any such modifications ahead of time. Additionally, if you enter into a significant exchange during the year (such as purchasing a business, taking on a new obligation, signing a new lease, changing a bookkeeping rule, receiving new bookkeeping declarations, etc.), inform your auditor right away. Proactively working through an exchange after it occurs requires accurate month-to-month reporting.
8. Before beginning any hands-on work, complete everything on the auditor's preparedness agenda. The list of general requirements that auditors most frequently have for the audit of financial statements for small to medium sized businesses follows. If at all possible, the data should be submitted online in an Excel design. Depending on the industry in which you work, your auditor may also ask for different things.
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Reasons For Auditing Financial Statements
Audit of financial statements
An independent auditor's evaluation of a component's financial reporting and joint exposures is known as a financial statement audit. The auditor's report, which attests to the decency of the financial statement's opening and related revelations, is the result of this examination. When the financial reports are delivered to the intended beneficiaries, the evaluation report must accompany them.
Reasons for conducting a financial summary audit
The purpose of a financial summary audit is to lend credibility to the organization's comprehensive financial situation and operations. All freely held securities are required to file yearly reports with the Securities and Exchange Commission that have been audited.
Financial lenders also routinely demand an audit of the financial statements of every component to which they advance reserves. Before extending exchange credit, providers may also demand reviewed financial information (however typically just when the measure of mentioned credit is significant).
As the complexity of the two primary accounting systems, Generally Accepted Accounting Principles and International Financial Reporting Standards, has increased and because there have been numerous disclosures of false reporting by important businesses, audits have become more and more basic.
1. Preparation and risk analysis
includes risk consulting in Dubai to improve business understanding. Using this information to assess whether there are any potential hazards that could have an impact on the financial statement.
2. Testing internal controls
includes assessing the effectiveness of a component's set of controls, with an emphasis on areas like legal permission, advantage protection, and obligation isolation. To determine the amount of control sufficiency, this may involve a number of tests conducted on an examination of exchanges. The evaluators are allowed to scale back a major percentage of their subsequent audit systems when there is a high level of sufficiency.
The evaluators must use other methodologies to examine the financial statement if the controls are ineffective (i.e., there is a high risk of a material error). A variety of risk assessment surveys are available that can support the testing of internal controls.
3. Practical techniques
includes a large display of tactics, some of which have been tested:
• Evaluation. To identify anomalies, conduct a proportional correlation with documented, determined, and industry outcomes.
• Cash. Verify restrictions on bank adjustments, audit bank compromises that rely on nearby finances, and provide bank affirmations.
• Marketable safeguards. Verify safeguards, evaluate follow-up transactions, and evaluate showcase value.
• Receivables from clients. Confirm account adjustments, investigate resulting assortments, and evaluate cutoff and year-end bargains.
• Counting. Follow accumulated stock expenses to the general record, observe the physical stock check, confirm inventories held at various locations, test sending and getting cutoff strategies, examine paid provider solicitations, test the calculation of apportioned overhead, audit current creation costs, and get confirmation of inventories held at various locations.
• Fixed assets. Watch the resources, check the records of purchases and transfers, the rent audits, the evaluation reports, the fraud investigation audit in Dubai, and the depreciation and amortization calculations.
• Payables account. Verify the accounts and run the year-end cutoff.
• Accrued expenses Examine the resulting payments; compare the adjustments to those from prior years; compute the accumulations.
• Debt. Verify with lending experts, check lease agreements, and check references in minutes for top managerial employees.
• Income. Examine the reports that support your choice of offers, check the subsequent exchanges, recalculate the level of finish, and check the background history of offers returns and compensations.
• Charges. Analyze cost-supporting reports, check subsequent exchanges, and confirm unusual occurrences with service providers.
Motives Behind Financial Statement Audits
Out of the several different types of evaluations of financial statements, an audit is the most expensive. An arrangement is the most cost-effective option, followed by an audit. Numerous businesses try to minimize an audit or accumulation because of the cost involved, but this is only an option if the recipients of the report find it suitable. In addition to the yearly audit, privately held substances are required to have their quarterly financial reports audited.
For publicly traded companies, audits become increasingly expensive because auditors must adhere to the tighter audit standards set by the Public Company Accounting Oversight Board (PCAOB), who will then pass along their increased costs to their clients.
The governing body has a duty to confirm an annual audit of the useful financial statement. The board is responsible for safeguarding, monitoring, and valuing the beneficial financial-related assets because it serves as the trustee of the approved advantages. The audit is a crucial component of this trustee job, and the cost should be seen as a regular operating expense.
The board's trustee responsibilities should not be taken lightly. Chiefs may be put in danger if a senior management team is negligent in organising and monitoring the operations of its agreeable. A finished, two-passage accounting framework is the first step in fulfilling this commitment. The second is monthly feasibility reports in Dubai, and the third is an annual examination of the accounting records and supporting archive.
Learn More: https://kgrnaudit.com/reasons-for-auditing-financial-statements/
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Importance Of Auditing Financial Statements
What Is a Financial Audit?
A financial audit is led to assess whether “financial statements “(the data being confirmed) are expressed as per determined criteria. Ordinarily, the criteria are worldwide bookkeeping measures, even though auditors (KGRN auditors) may direct audits of budget summaries arranged utilizing the importance of auditing financial statements premise or some different premise of bookkeeping properly for the association.
In giving a conclusion whether fiscal summaries are genuinely expressed as per bookkeeping measures, the auditor accumulates proof to decide if the announcements contain material mistakes or different errors
Auditing
Importance of auditing financial statements is a method for assessing the adequacy of an organization’s interior controls. Keeping up a powerful arrangement of inside controls is essential for accomplishing an organization’s business destinations, acquiring dependable financial related giving an account of its activities, averting misrepresentation and misappropriation of its benefits, and limiting its expense of capital.
Both inner and autonomous auditors add to an organization’s audit firms in Dubai framework in various yet significant manners.
Learn More: https://kgrnaudit.com/importance-of-auditing-financial-statements/
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Advantages Of Financial Audit
An audit determines to create financial reports that are trustworthy and external users can have faith in on as a reasonable illustration of the business’s performance and condition. Advantages of financial audit have three steps.
Planning and risk evaluation
Testing of internal controls
Substantive procedures
5) What takes place in a financial audit?
There are steps you can proceed in a advantages of financial audit
Implement good performs year-round
Analysis your financial data
Get your bookkeeping together
6) Why is audit important?
Auditing is an independent inspection of financial reports of an individual, whether profit focused on or not, regardless of its size or legal form, when such an analysis is conducted with an opinion to conveying estimation thereon.
7) Why are audits needed?
Here are the topmost 5 motive to conduct an audit
To assure the actual process of a business.
To analysis compliance with a multitude of organizational guidelines.
To introduce the logic of self-confidence in the organization that the business is operative well and you are ready to encounter potential challenges.
To preserve/improve the administration’s status in the community.
To make a “due diligence in Dubai” analysis for shareholders or potential investors.
8) Why is an audit helpful?
Delivers Independent Awareness
Increases Proficiency of Actions
Estimates Risks and Defends Assets
Evaluates Controls
Safeguard Agreement with Laws and Guidelines
9) What are the benefits of CAAT?
Independently contact the files stored on a computer system without dependency on the customer
Test the consistency of customer software, i.e. the IT application
Increase the correctness of audit investigations; and
Execute audit tests more efficiently, which in the long-term will result in a more cost-effective audit
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Outsourcing Accounting Services in Dubai
A company’s performance is directly related to its ability to manage its accounting. A substantial number of businesses are located in Dubai because of its economic importance, and each one requires the upkeep of an accounting book and the recording of financial transactions to function properly. Accounting outsourcing in Dubai is the most effective means of ensuring that the books of accounts are accurate and free of errors. We at KGRN provide accounting outsourcing services in Dubai, UAE, to aid you in promptly detecting financial indicators and performance, enabling you to make the best decisions for your company at the best possible moment. You will get skilled accounting services completed with the greatest level of secrecy and security in the shortest period of time if you choose KGRN as your bookkeeping partner in the United Arab Emirates.
Outsourcing Accounting Services in Dubai is an option.
For many years, the United Arab Emirates has served as a commercial hub for investors due to its varied nature and government tolerance of foreign investment. With the advancement of business, the need of maintaining adequate books of account has evolved into a legal obligation for every company in the United Arab Emirates.
Accounting is the process of gathering, analysing, and documenting financial information about an organisation. Accounting is rapidly developing as a consequence of its response to the different needs of a company. Accounting is becoming more complex. It is the cornerstone of any business venture. In order to outsource accounting services in Dubai, whether you are a startup or an established business, you must choose a reputable accounting firm that provides excellent services at an accessible price, according to your needs.
KGRN is the final word in Dubai when it comes to accounting outsourcing. Accuracy and conviction are the hallmarks of the Accounting Outsourcing Services in Dubai provided by KGRN to the business sector.
Accounting and documentation protect the interests of any company against legal danger and liability.
The following are some of the several types of accounting that a company may be required to perform depending on its nature:a. Financial accounting (also known as financial reporting):
It is the process of putting together a financial statement for distribution to other parties. It illustrates a firm’s previous performance and current position, allowing customers and suppliers to place their faith in the organisation.
b. Management accounting or management information systems reporting:
In this instance, the information is used for internal reasons in order to ensure effective control inside the organisation and the attainment of the company’s strategic objectives. It supports management in making informed choices in a timely manner.
d. Tax Accounting (sometimes known as taxation accounting):
According to state tax regulations, this accounting is performed in order to estimate a company’s tax liability and avoid any penalties or fees that may be incurred as a result of inaccurate tax filing. Transparency in accordance to FTA requirements will be achieved by the timely submission of input and output tax returns.
d. Project Accounting (also known as project costing):
This approach is generally used by construction businesses to track the financial development of a project via the use of periodic financial reports and to determine the profitability of a particular project. Budgeting is the most important tool used in this reporting process.
What are the Benefits of Using an Outsourced Accounting Service?
Small and medium-sized businesses, as well as established companies, may benefit from the services of an outsourced accounting department, which offers them with a full accounting department expertise (SME). The accounting department is responsible for the day-to-day coding of transactions, accounts receivable and payable, payroll, financial reporting management, and a variety of other services as required by the company. It is possible to obtain high levels of accuracy in financial accounting and reporting, identify loopholes and fraud, reconcile account statements, save processing time, receive professional assistance, avoid tax penalties, maintain current accounting status, and more by outsourcing accounting services in Dubai.
Accounting Services Provided by KGRN
Under the UAE Commercial Firm Law 2015 and the UAE VAT Law, companies are required to maintain adequate books of account for a minimum period of five years after they are established. Accounting operations inside a well-established corporation or a small and medium-sized enterprise (SME) may be difficult to manage while competing with rivals and complying with national legislation.
It can be difficult for a company to manage the accounting operations of their enterprises within the corporation in order to keep up with the country’s growing economy, comply with regulatory standards, and compete with other firms. This is especially true for small and medium-sized enterprises (SMEs). The result is that an increasing number of businesses are turning to accounting outsourcing services in Dubai as a cost-effective alternative. KGRN is at the top of the list of accounting outsourcing firms in Dubai, offering expertise and cutting-edge technology, highly qualified and result-oriented reporting, as well as a competitive procedure.
Learn More: https://kgrnaudit.com/outsourcing-accounting-services-in-dubai/
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Internal Audit Services in Dubai
The Purposes of Internal Auditing
Our primary goal is to supply the company with tools that will enable it to increase the efficiency of its operational processes. We discover issues and flaws and attempt to correct or remove them as quickly as possible.
We look into whether or not all of the company’s acts are in compliance with the law. Our services also include financial reporting and asset protection for the company.
We provide management with confidence in our Internal Audit Services and External Audit Services by ensuring that internal controls are appropriate and functioning effectively, and that the organisation is strong enough to meet the changing demands of the external business and regulatory environments.
Among the primary goals of internal auditing are the following:
Services in the field of internal auditing
It is unquestionably necessary in today’s environment to have an internal auditing programme in place. As a consequence of new technological advancements and innovation, the world is continually evolving. Every company strives to be better than it was yesterday. In today’s workplace, the use of technology, automation, and new procedures, among other things, is crucial.
When the operations of your firm are efficient, you may be able to increase revenues while still meeting the aims and objectives of your organisation. In order to improve operational efficiency, our internal audit service will assist you in analysing your company’s operations, identifying control gaps, and putting appropriate measures in place.
We provide you with specialised internal auditor resources, cutting-edge methods, and customised technology in order to guarantee your success.
Our initial objective is to get acquainted with your company. Then, with the help of our Dubai services, we build a plan that is in line with the goals of your organisation.
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How to Obtain an ICV Certificate in the United Arab Emirates?
How to Get an ICAO (International Civil Aviation Organization) Certificate in the United Arab Emirates The ADNOC's Unified ICV Program is a commendable initiative that ought to be supported. Economic incentives are related to contributing to in-country value (ICV), which motivates local suppliers to put getting an ICV certificate ahead of other business objectives in order to maximise their earnings. According to the program's website, the program's overall goal is to encourage small firms in doing business with large organisations like ADNOC while simultaneously fostering economic growth in the United Arab Emirates. The project also gives "participating enterprises" the opportunity to localise their business operations and support the construction of the UAE's economic infrastructure by establishing local subsidiaries.
Local vendors could gain a competitive advantage over their rivals by submitting bids to ADNOC. ICV Certification is a crucial aspect of the hiring process if you're using the ADNOC bidding technique. This reasoning claims that bidders who possess ICV Certification will therefore have a competitive advantage over those who do not.
Getting an ICV Certificate is more crucial as more political parties join the ICV programme. If you're interested in finding out more about how to receive one of these certifications, consider using the following procedure.
Push Digits Chartered Accountants, with a specific emphasis on ICV certification consulting services and other associated services, has developed from its modest beginnings to become one of the most reputable audit organisations in Dubai. Our aim is to provide you a complete and in-depth understanding of the crucial elements you can use to raise your ICV score. When our professionals work closely with your team from the beginning to the end of the certification procedure, it becomes much simpler to complete.
Below are instructions on how to get an ICV certification.
The application process will be simple for individuals who desire to apply. But before you begin the procedure, there are a few things you need to be aware of.
Guidelines
One of the first things to realise is that only ICV certifying organisations that have been approved by the UAE government may grant ICV Certification in the United Arab Emirates.
For each business licence the supplier currently holds, an ICV Certificate is required when the supplier submits an application for certification. Each business licence will be treated legally as if it were a distinct legal entity from the others. An organisation will be given one consolidated certificate that covers all of the organization's activities whenever it has numerous branches that all work under the same licence.
It is the candidate's duty to completely fill out the online-accessible ICV Certification Templates.
The figures in the template, unless otherwise specified, shall be derived from the most recent audited financial statements in accordance with International Financial Reporting Standards (IFRS). These financial accounts should, at the time of compilation, not be older than two years. Companies that are less than ten months old and whose financial statements have not yet been audited may instead rely on information from their Management Accounts to fulfil their financial reporting requirements in order to continue operating. It is very important to keep in mind that management accounts should not be older than nine months. However, they must first undergo an audit by a licenced auditing firm in order to be put into operation.
The Certificate shall, unless otherwise specified, be valid for a period of fourteen (14) months from the date of issuance (from the date of issuance of audited financial statements). An updated certification application must be submitted by businesses by the end of the month. It is also possible to employ the same financial statements that were previously used. On the other hand, receiving a revised certificate does not revoke the validity of the initial certificate.
It is prohibited for a business to switch certifying bodies once it has contracted with an Empaneled Certifying Body to confirm the certification of its products or services for the term of the certification (unless they have an adequate reason).
Every expense and revenue a company records throughout a fiscal year must be disclosed in the company's federal filings.
Regardless of the currency chosen, the ICV Template mandates that all statistics be presented in UAE dirhams (AED). Only when they are specifically mentioned in the law that permits them may exceptions be made.
It might be possible to use purchases made throughout the year in place of consumption information if a corporation is unable to provide consumption figures (specified by invoice and vendor).
The ICV Template's computations and underlying presumptions must adhere to all relevant laws and standards.
Each and every figure provided by the source must be accompanied by supporting documentation in order for the data to be properly analysed. Any ICV Certificate Template that is currently being evaluated by the Certifying Body may be subject to a quality review upon request from an authorised representative of one of the participating organisations throughout the verification process. Any time during the procedure is appropriate for doing this. The certifying authority and supplier will, upon request, furnish the representative with whatever information they deem essential.
Fines will be imposed if it is determined that a corporation's submission was tampered with or that the company was negligent. One effect of this choice could be a restriction on doing business with ADNOC.
You will be permitted to start submitting proposals to the organisations taking part in the competition after you have received certification. Depending on how much of a competitive advantage you have over the other bidders, your ICV score will have a greater or lesser impact on the bidding process.
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Know About Corporate Tax
The Ministry of Finance (MOF) of the United Arab Emirates (UAE) has announced the adoption of a federal corporation tax across the country (dubbed the “UAE Corporate Tax”). For the purposes of this definition, “Corporate Tax” may be defined as a kind of direct tax applied on the net income or profit of a corporation or other commercial organization. It is sometimes referred to by other terms, such as company profit tax or corporate income tax, depending on the context. The newly established corporation tax in the UAE will be implemented in 2023, with the fiscal year beginning on June 1st of that year. The corporation tax code is still in the process of being finalized in its entirety. Nonetheless, in this post, we will go over some of the most critical aspects of the newly proposed business tax legislation in further depth.
What is the extent of the application of the corporation tax?
Except for natural resource exploitation, which will continue to be taxed independently in each emirate, the United Arab Emirates corporate tax will apply to all business and commercial operations carried out inside the country’s borders. A firm’s accounting net profit after certain items (deductibles) have been subtracted is described as taxable income under the UAE corporation tax legislation. Corporate tax is levied on taxable income. If taxable income exceeds Aed 375,000, commercial operations, which include all forms of business activities carried out in the UAE under a trade license or permission, as well as income received under freelancer license agreements, would fall within the scope of the UAE corporate tax regime’s application.
The following are the most important provisions of the newly passed federal company legislation in the United Arab Emirates:
The corporate tax must be paid on taxable income in excess of Aed 375,000, whichever is higher. This will result in a zero percent corporate tax rate for taxable income up to Aed 375,000 in the first year of application.
Corporate income in excess of AED 375,000 is subject to two distinct rates of taxation. In the first, a 9 percent tax is levied on taxable income above AED 375,000, while in the second, a special tax rate is applied to big international corporations that satisfy certain requirements.
During the fiscal year beginning on July 1, 2023, and concluding on June 30, 2024, which will be its first year of operation, the new tax system will go into effect for the first time.
However, if a company’s fiscal year begins on 1 January 2023 and ends on 31 December 2023, it will be liable to UAE corporation tax beginning on 1 January 2024, unless the company is exempt from the tax.
A new entity, the Federal Tax Authority (FTA), was founded in 2016 and will be responsible for administering, collecting, and enforcing the UAE’s corporate tax laws, which will be supervised by the Ministry of Finance. The FTA will be governed by the Ministry of Finance.
The Ministry of Finance will also continue to serve as the competent authority for the purposes of an international tax treaty or another international tax arrangement, including when tax information is transferred, in accordance with existing legislation.
The following exemptions are available under the UAE Corporate Tax system:
Employees in both the public and commercial sectors, regardless of where they work, are exempt from paying taxes on their individual earnings and employment income.
For as long as they are acting in their own personal capacity, individuals who invest in real estate or who get capital gains from personal stock or bond investments in the form of dividends are not subject to tax on the income generated by their assets.
Those businesses that are founded and registered in the United Arab Emirates’ free zones will be subject to the country’s corporate tax system, but only to the degree that their operations take place inside the country’s borders. The corporation tax exemption provided to such business entities for operations carried out outside the UAE would be recognized under both the new and existing corporate tax systems, the UAE government said today.
Introducing a new corporation tax system in the United Arab Emirates for the first time would allow the country to adopt international best practices in the formation of a leading global center of investment and business while also accelerating the government’s strategic development objectives. The new modifications also underline the country’s commitment to fulfilling international standards for tax transparency and limiting the use of abusive tax practices in the country’s financial sector.
If you want to complete company tax forms in Dubai. KGRN is a one-stop-shop for all of your business requirements, providing one-on-one assistance from a subject matter expert. The KGRN staff can assist you in filling out your company’s tax papers.
Learn More: https://kgrnaudit.com/know-about-corporate-tax-on-business-profits/
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Public Accounting Firm vs Private Accounting Firm
One of the most favorable uses of a business degree is in accounting, which offers access to a large variety of employment prospects. In general, accounting is concerned with the documentation and evaluation of business transactions in all of their forms. Accountants supply financial data to businesses so that executives may make wise and economical company decisions. Experts in accounting also contribute to the moral and effective operation of a business.
Public accounting and private accounting are the two divisions of accounting professions.
Auditing, tax preparation, advisory services, and consulting are just a few of the many services offered by public accountants.
According to market capitalization, the Big Four accounting firms (KGRN) are the biggest accounting firms in the world.
While pursuing your goal of becoming a certified public accountant, you will have the chance to work with a variety of clients in public accounting (CPA).
Private accounting professionals are interested in the internal workings of businesses, governmental entities, and other organizations with a government-related focus.
Private accountants are essential to an organization's success since they offer firms specific services. As a result, after leaving government service, a sizable portion of public accountants find employment in the private sector.
Earning an online accounting degree can be your best option if you're interested in a career in accounting, a crucial and rapidly changing field. Students that enroll in accounting degree programs, like those Concordia universities, St. Paul offers, will be more equipped to compete for accounting-related jobs. To assist you in determining whether a job in public or private accounting is a good fit for your abilities and interests, we've put up a comprehensive reference on working in both fields.
Public sector accountants competing with private sector accountants
Evaluation of accounting systems, data collection, and test-taking are all part of public accountants' training to determine whether or not a company is running efficiently. Financial statement accounting standards must also be understood by a public accountant because they are a necessity for the profession. On the other hand, private accountants are trained and qualified to carry out a variety of accounting tasks for their clients, such as accounts payable and billing. Private accountants' expertise could be restricted to the current project.
Public accountants may have extensive experience in many different sectors, depending on their clients. A private accountant is more likely to be familiar with information unique to that industry.
The CPA certification is required for public accounting but not for private accounting. On the other hand, there are various credentials that can be used in private accounting.
A public accountant will either serve as an auditor and audit manager before becoming an audit partner or in tax accounting before becoming a partner in the company, which is the clear-cut professional path.
Audit partners are in charge of managing audit relationships and pursuing new business, whilst tax accountants are responsible for tax returns and other types of tax record keeping.
Career paths in private accounting are more likely to diverge than those in public accounting. They can begin in any of a variety of professions and advance to the role of assistant controller. Private practice accountants can eventually rise to roles like controllers or chief financial officers (CFOs). CFOs are in charge of investor communications in addition to all internal accounting responsibilities, as well as treasury and risk management.
Public accountants may work in a challenging setting where they are required to travel frequently, put in a lot of overtime, and adhere to tight deadlines. The majority of independent accountants work from offices where their schedules are predictable and they are not required to travel. Due to these reasons, private accounting is frequently thought of as a more reliable option in terms of daily employment chances.
To flourish in either type of accounting, one must have strong interpersonal skills. A public accountant needs to be competent in a variety of tasks, including interviewing clients and resolving computer system issues. They frequently have to offer constructive comments on the work of their clients as part of their responsibilities. They must be able to work successfully in group situations needing participation from the community because they are private accountants who collaborate with a range of departments within their organizations.
Since it can be difficult to evaluate and critique the work of other accountants, working in public accounting is not for everyone. Because professionals generate business transactions and evaluate their success, private accounting careers offer higher levels of job satisfaction than public accounting careers.
In public accounting or auditing, the great majority of accountants start their professional careers. It is a less appealing long-term career option due to the demand for an assessment function. However, it does give you the opportunity to gain a wide range of experience throughout your early years in a job role. A long-term employment option that is growing in popularity is private accounting. Private accounting and public accounting are generally at odds with one another. The core job responsibilities, skill requirements, and educational prerequisites are the same for both professions.
There are obvious differences amongst students when they enter the industry and start using their newly gained knowledge and skills. Public accounting offers specialization and the possibility for quick advancement within the industry in exchange for what some may regard to be higher stress. Compared to government accounting, private sector accounting is more dependable and flexible. During the course of their careers, accountants are likely to work in both the public and private sectors.
Learn More: https://kgrnaudit.com/public-accounting-firm-vs-private-accounting-firm/
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ICV Certification Process
The ADNOC Unified ICV Program has done a fantastic job. Economic incentives are related to contributing to in-country value (ICV), which motivates local suppliers to put getting an ICV certificate ahead of other business objectives in order to maximize their earnings.
The program's objective is to encourage economic development in the United Arab Emirates while facilitating trade between small enterprises and major corporations like ADNOC.
The project also gives "participating enterprises" the opportunity to localize their business operations and support the construction of the UAE's economic infrastructure by establishing local subsidiaries.
Local suppliers have the chance to outbid their rivals by submitting bids to ADNOC. ICV Certification is a crucial part of the selection process when it comes to the ADNOC bidding technique.
As a result, bidders with ICV Certification will have an edge over those without the certification in the bidding process.
Learn More: https://kgrnaudit.com/icv-certification-process//
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Accounting Earnings and Taxable Profits
In this post, you'll discover how to compare accounting earnings with taxable profits. The contrast between accounting earnings and taxable profits was brought to light by the company tax, which under certain circumstances primarily applies to taxable profits. Accounting profits are calculated using the accrual basis of accounting, as opposed to taxable profits, which are computed using both the accrual and cash bases of accounting.
Accounting profits are calculated in accordance with IFRS or Generally Accepted Accounting Principles (GAAP), whereas taxable earnings are estimated in accordance with the applicable corporate tax laws and regulations.
Profit discrepancies come from inconsistencies between the base specified in corporate tax legislation and the standards used to calculate profits under IFRS and GAAP. The variations in the guidelines and procedures for calculating profits lead to the following profit discrepancies:
Long-term differences
In the near term, differentiation
Permanent disparities, as their name suggests, are inequalities that continue across time, having an impact on a certain period or periods of time, but have no bearing on subsequent periods or periods of time. The actions that will have a long-term impact are approved by one administration but rejected by the following one. The same thing might happen in a circumstance where it is recognized in line with IFRS and GAAP but not under corporation tax law, and vice versa. This includes things like dividends, capital gains, fines, and penalties, to name a few.
Dividends and capital gains are regarded as accounting income, although they are not taxed, according to a news release issued by the United Arab Emirates Ministry of Finance. Therefore, during the time that dividends and/or capital gains are included in accounting income, accounting profits would be higher than taxable profits.
On the other hand, fines and penalties frequently have a lasting impact. Even though the Law may not always recognize fines and penalties as proper expenditures, they are recorded as costs in order to determine accounting profits. Accounting earnings for the relevant period would be lower than taxable profits for the same period in the same year as a result of these differences in accounting rules.
As the name suggests, temporary inequalities are distinctions that exist for a brief period of time before dissipating. This suggests that some transactions may result in inconsistencies in one period, which will be eliminated by subsequent transactions in following periods. Although both administrations are aware of the factors that lead to momentary instability, they have different strategies for dealing with these elements. Depreciation is an illustration of an accounting expense.
Corporate tax regulations frequently provide depreciation, albeit the rate and/or method can vary from administration to administration. Tax authorities frequently use straight-line depreciation, and the International Financial Reporting Standards (IFRS) require this method or a reduced balance method.
However, from the perspective of tax authorities, both strategies would produce roughly the same amount of depreciation over time, independent of the pattern of consumption. These realities may cause a divergence in consumption patterns between those required by IFRS and those seen in practice.
The following categories may also apply to temporary deviations:
Disparities that are deductible immediately
Taxable short-term inconsistencies
Companies would be required to pay more tax in a given period if the applicable law increased taxable earnings in that period; this obligation would change in succeeding periods/periods if the relevant legislation decreased taxable profits in that period. This is caused by the deductibility of temporary changes, to put it simply.
Such differences between the two scenarios would result in the creation of a deferred tax asset in the company's books. These kinds of goods include things that result in deductible transitory differences, such as deferred income, warranties, bad debt provisions, and other things.
Deferred income will not change because advances in the UAE are not subject to corporation tax; nevertheless, additional costs like warranties, bad debt provisions, and other comparable items will generate deductible temporary differences.
When it comes to bad debt provisions, for instance, businesses list them as a cost, but tax authorities frequently view them as an expense until the liabilities are eliminated from the books. Similar to this, corporations frequently incorporate warranty clauses in their contracts, but when the money is really spent, the tax authorities view them as reasonable costs.
Companies with taxable transitory disparities pay less tax now than they otherwise would, but they will have to pay more in subsequent periods/periods. Disparities that lessen taxable gains for the current time are known as taxable temporary discrepancies by laypeople.
Tax liability is delayed for a while as a result of taxable transitory adjustments. This is a reference to a commitment that has been put off for any reason in the future. A common example of this type of arrangement is paying in advance.
Prepayments are recorded as an asset and amortized over time by corporations in accordance with the applicable International Financial Reporting Standards. As a result, even though tax authorities frequently accept the entire amount as an expense when the payments are made, a portion of prepayments is recorded as an expenditure in the accounting record each year.
It's crucial to remember that the information above is based on best practices from around the world. Once the UAE government has put the Corporate Law into effect, we will have a full understanding of the factors that could lead to both permanent and temporary deviations, and we will keep you updated as things develop.
You can launch your business in the United Arab Emirates with no taxes due. Consult a professional in the field for advice.
Learn More: https://kgrnaudit.com/how-to-make-a-comparison-between-accounting-earnings-and-taxable-profits/
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Benefits of Cloud Accounting Services
Cloud Computing Benefits Accounting: The pandemic, combined with technological advancements, has altered the commercial landscape dramatically. The accounting department of every company serves as the organization's beating heart. Restricting oneself to a single physical space, on the other hand, is no longer an option. Accepting client payments, processing supplier payments, and keeping track of payroll all necessitate adaptation. Accounting cloud services are the wave of the future, providing accounting firms with the flexibility they require to succeed in the long run. This is your one-stop-shop for everything you need to know about the advantages of cloud accounting for your company!
What exactly is Cloud Accounting, and how does it work?
Let's define cloud accounting before we go over the various advantages. Accounting software stored on local hard disks is only accessible from those locations when using traditional desktop accounting software. Accountants can use cloud computing services to manage their finances because they are hosted on remote computers and accessible via the internet.
You can connect from any location on the planet.
Working from home is more popular now than it has ever been. Your accounting team will have access to all data and apps whether they're working from home or on a business trip halfway around the world. Several businesses, for instance, were forced to close their doors during COVID-19, forcing employees to work from home. Businesses that had previously used cloud accounting services were eligible for this option. Employees were able to send and receive messages, create invoices, and perform other accounting tasks with ease. Pivoting was difficult, if not impossible at times, for those who still used desktop accounting software.
The ability to run a business from a distance appears to be a growing trend that will likely continue in the near future. If you want to stay one step ahead of the competition, you must have remote access to all elements of your business, including accounting.
Enhance your communication skills.
One of the most important aspects of long-term success is effective communication with customers and employees. Client communication via phone and email is no longer as popular as it once was. Businesses can interact with their customers and among themselves in new and different ways thanks to cloud accounting services. A cloud-based accounting system's communication channels include client account portals, online dashboards, and chat rooms, to name a few.
By merging online calendars, email, and data, team members can simply stay on the same page, avoiding redundancies and human errors.
As a result, both money and time will be saved.
Maintaining a traditional accounting software system can quickly deplete the time and resources of your information technology (IT) personnel. Not to mention the significant software investment required at the outset. You might be able to save money on IT infrastructure, software, and hardware expenditures if you use cloud accounting. Pay a minimal monthly or yearly subscription cost for the service, and the cloud accounting software supplier will take care of the rest. It's simple to set up and will save both time and money for your firm.
The highest level of security
Customer contact information, bank account details, credit card numbers, and other sensitive information are all contained in your accounting data. Accounting software is one of the last places you want to be hacked, despite the fact that a breach of any part of your business is bad news. Cloud-based accounting software incorporates features like military-grade encryption, regularly scheduled backups, and automated saving to protect data security. You'll also always be using the most up-to-date version of the program, which includes any future updates.
Collaboration is a simple method that everyone may carry out.
Collaboration with colleagues has never been easier thanks to cloud-based accounting applications. Using integrated email, chat boards, and other communication tools, all authorized users have access to the same information and may safely communicate data. Regardless of how many kilometers between you and your employees, you can easily have expense claims approved, problems resolved and much more done from a single central location.
Reducing the amount of carbon dioxide released into the environment is a good idea.
Making your organization paperless is good for the environment because it minimizes your carbon footprint. This means that if you follow the methods mentioned below, you will save money:
When you use cloud accounting, all of your data is stored and backed up in the cloud.
The platform's adaptability is a significant consideration.
Do you prefer a PC to a Mac, even if one of your coworkers does? Is it Chrome or Internet Explorer for you, and Chrome or Internet Explorer for your coworker? It makes no difference what device or internet browser you use for cloud accounting. Individuals are allowed to use whatever browser and operating system they like because the majority of browsers and operating systems are supported.
Do you prefer a Mac or a PC for your computer? As a primary browser, do you prefer Chrome, Internet Explorer, or Firefox? What is it about them that you find appealing? In the world of cloud accounting, it makes no difference. Web browsers are commonly used to access cloud accounting software, which is compatible with all major platforms.
You can find cutting-edge accounting cloud services on the internet.
There are a million things to consider when it comes to running a business; accounting software should not be one of them. KGRN, which offers hassle-free, performance-driven cloud-based accounting solutions to help you streamline your accounting procedures, is familiar with your company's requirements. Accounting's future is on the cloud. Now is the best time to set up your no-obligation consultation!
With over 35 years of experience in SME technology support and installation, as well as 6 years of prior experience in Corporate IT and Voice, I am well-versed in the world of technology. I've seen a lot of changes in my life. I only have one thing in common with him: I've spent my entire professional life working on Business-Wise Technology applications. We aim to be five years ahead of the latest technological developments for our customers, ensuring that they are on pace to fulfill their present and future needs.
Consider collaborating with KGRN as a technology partner.
Learn More:
Accounting and Bookkeeping services in Dubai
Bookkeeping services Dubai
ICV certificate
ICV certification
ADNOC ICV Certification Agencies
Internal Audit Firms in Dubai
ESR UAE
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Bookkeeping and Accounting Firms in Dubai
Several small to medium-sized businesses, including bookkeeping and accounting firms in Dubai, are beginning to re-appropriate for some non-core functions.
In Dubai, look for organizations that provide outsourced bookkeeping and accounting services.
It is contingent on the current stage of your firm, whether you have internal bookkeepers and accountants on staff and the goals of your organization.
If CEOs attempt to change their business' financials while also running the business, it can cause complications as the company grows if they don't have authentic accounting and bookkeeping services in Dubai professionals in place. Using outsourced bookkeeping and accounting services in Dubai is one approach for a CEO to acquire precise budget data.
Before deciding on a bookkeeping and accounting firm in Dubai, consider the following factors.
If you're thinking about using a dispersed accounting or bookkeeping service, you should do more research. When looking for an outsourced accounting service in Dubai, there are a few things to consider:
Is a CPA in charge?
If the bookkeeping and accounting organizations in Dubai are governed by a CPA, they must adhere to a code of ethics and always do what is best for their customers, not for themselves. There is also mandatory, ongoing training that allows them to stay current with bookkeeping best practices.
Is it true that the reps work full-time?
When it comes to choosing bookkeeping and accounting businesses in Dubai, the turnover rate reveals a lot about the company. When a company invests in full-time reps, the employees will put their money back into the company.
Are there several levels of approval?
The majority of outsourced services have varying levels of reps attempting to set a record. They provide a team that includes a clerk, bookkeeper, controller, and chief financial officer that can address your company's needs. Internal controls at various levels help to eliminate extortion.
Learn More: https://kgrnaudit.com/bookkeeping-and-accounting-firms-in-dubai/
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