H.E. Sultan Al Mansoori: Most Auditing Companies Within UAE Are Run by National Offices

Auditing Financial Statements According to Internationally Unified Auditing Standards Promotes Investment and Confidence in Economic Institutions

Abdullah Al Turifi: 98.8% is the Percentage of Governance Disclosure at Listed Companies Concerned with Cabinet Resolution

The 8thInternal Auditors forum opened yesterday in Dubai under the patronage of H.E. Eng. Sultan bin Saeed Al Mansoori, Minister of Economy and Board Chairman of the Securities and Commodities Authority (SCA).

Sessions of the three-day forum covered a number of important finance- and accounting-related themes and topics, especially in relation to aspects of securing the future of the internal audit profession; measuring the effectiveness of internal audit strategies; audit, compliance, and risk; and the impacts of economic and political risk on the audit profession.

At the beginning of the opening speech, which was delivered by H.E. Abdullah Al Turifi, CEO of SCA, on behalf of Al Mansoori, the audience held a minute's silence and recited Al Fatiha for the souls of the UAE martyrs who gave their lives for their homeland.

In his speech, Al Mansoori noted that the Ministry of Economy is assigned with regulating the internal audit profession within the UAE being responsible for implementing and enforcing Law No. (12) of 2014 concerning the Audit Profession, in addition to licensing audit practitioners. He explained that according to the new companies law issued in 2015, SCA is responsible for the accreditation controls of auditors in public joint-stock companies.

Al Mansoori reiterated that the UAE has to continue its support to the audit profession and professionals in general, pointing out that it is common for international auditing offices across the globe to have the increased confidence of users of the audit report compared to local offices because they provide high-quality services. Given that the UAE pursues an open economy policy, it presented all auditing companies with the opportunity of competing and providing services according to the approved controls and professional standards. This has increased the number of auditing companies and offices within the UAE, especially those run by national companies, according to the recent statistics released by the Ministry of Economy. This came as a reflection of the accelerated economic growth and activity and an implementation of the principle of professional competition, which eventually promotes performance and contributes to development and prosperity.

Al Turifi revealed that the internal audit profession is an integral part of a sound corporate governance system in any institution and the international standard governance rules emphasize its importance. He explained that Articles (8) and (9) of Cabinet Resolution No. (518) of 2009 concerning Governance Rules and Corporate Discipline Standards emphasized the importance of the role of auditing in public joint-stock companies, auditing committees, and internal auditors. As a supervisory authority regulating financial markets, SCA follows up on the implementation of such rules on the part of public joint-stock companies and the disclosure of governance practices in annually-issued reports. Al Turifi indicated that the percentage of disclosure of governance reports on the part of companies concerned with implementation amounted to 98.8 percent in 2015, according to statistics released by SCA, who follows up on the disclosure process by public joint-stock companies in this regard.

In his speech, Al Mansoori noted that the swift development of the auditing field enabled it to secure a distinct status on the international level due to the urgent need for it as a reflection of the economic expansion and the increased importance of local and foreign investment. Development in the auditing field came as a response for the urgent need for auditing and its development was in line with the economic development.

He added that the recent international changes, such as globalization, international trade liberalization, multinational companies, and information technology, dictated the need for unifying auditing standards. Hence the importance of unifying auditing controls to serve as a means for many countries across the world to improve the profession locally and achieve consistency to gain a relative push to achieve their expansion goals, in addition to saving time and effort to active economic institutions all over the world.

Al Mansoori said that a quick review of the international auditing standards shows how they constitute an applicable, consistent framework at the international professional levels and that they are general and comprehensive being issued by an international body whose membership includes most countries around the world. They are also based on the details of fieldwork procedures to minimize points of disagreement and remain objective.

He indicated that scientific studies show that international auditing standards improve society's understanding of the objective of the auditing profession and provide auditors with a comprehensive reference that achieves the highest performance levels. Such standards contribute to minimizing points of disagreement among countries and enable the less developed countries to take advantage of their developed counterparts in the field of auditing and constantly improve it. Consequently, issuing international auditing standards has positive developmental aspects I would like to applaud here.

Al Mansoori pointed out that the confidence of parties using financial statements prepared in accordance with international standards is higher since they are audited according to international standards, which encourages the expansion of the international investment field. Auditing financial statements professionally according to internationally unified standards makes the developed countries and the relevant economic bodies trust the correctness of the results of financial statements of companies in developing countries, engage into further investment activities, and be economically open to these countries.

At the same time, the internal audit profession has an important corporate status due to its impact on financial and administrative performance control in public joint-stock companies. The role of internal auditing lies in designing and developing the internal audit system, measuring and evaluating the efficiency of utilizing available resources, supporting the corporate governance system, and contributing to risk evaluation and management. This magnifies the investment value of corporate shareholders and protect the rights of all corporate stakeholders. Therefore, the internal audit process should be carried out in a strategic fashion to achieve its objectives.

The forum saw an active participation by a large number of auditors from the GCC states, in addition to Arab and foreign countries, in addition to keynote addresses delivered by Abdulqader Obaid Ali, President of the UAE Internal Auditors Association, and Ayman El Saheb, Chief Audit Executive at the UAE Higher Colleges of Technology (HCT).

The three-day forum held in Dubai included a number of events, workshops, and discussion sessions, dealing with the involvement of internal audit in compliance, the revolutionizing of the internal audit function to boost business momentum, turning risks into results, and outperforming peers financially.