Accounting & Bookkeeping

FAQs - Accounting & Bookkeeping

• Why it is necessary to maintain accounting in the UAE?
  • 
    (i) Statutory Requirements
    
    a. Commercial Company Law The Commercial Company Law requires all the entities registered in UAE to maintain the books of accounts as per International Accounting Standards and appoint Auditor to do the Audit of Books of Accounts annually. The Law provides that each company shall maintain accounting records showing its transactions, provided that such records would accurately and at any time demonstrate the company’s financial standing. Such accounting records shall be maintained at the head office for at least 5 years from the end of the fiscal year-end date.
    
    b. UAE Value Added Tax The VAT regulations also require a UAE company to record the business transactions and maintain the books of accounts.
    
    (ii) Management Requirements
    Accounting plays an important role in running a business because it helps the entity track income and expenditures, ensures statutory compliance, and provides investors, management, and government with financial information which can be used in making business decisions.
• Can non maintenance of correct and timely books of accounts lead penalty?
  • Administrative penalties for not maintaining proper books of accounts with supporting documents are prescribed under Federal Law which ranges from AED 10,000 to AED 100,000.
• When to consider outsourcing of Accounting & Bookkeeping?
  • 
    1. When the company is a start-up or at small or medium scale, it is advisable to outsource the accounting.
    
    2. Where business needs to control the cost without compromising on information quality, outsourcing is a good choice. Model of outsourcing may include Data entry & Bookkeeping, outsourcing of supervision, outsourcing of Finance controlling etc.