Companies registered with Sharjah Media City Free Zone must maintain proper accounting records, prepare financial accounts for each financial year and arrange for those accounts to be examined by an auditor approved by the Authority.
VAT Accounting UAE helps SHAMS companies prepare for their audit by reviewing bookkeeping records, reconciling financial information, preparing audit schedules and coordinating with an auditor eligible to conduct the statutory audit.
Our support is suitable for media companies, consultancies, e-commerce businesses, creative agencies, technology companies, holding structures and other businesses registered in SHAMS.
Need support preparing for your SHAMS audit?
Call +971 52 406 3000 or email info@vataccountinguae.com.
What Is a SHAMS Approved Auditor?
The Sharjah Media City Free Zone Companies and Licensing Regulations define an auditor as a person or corporate entity approved by the Authority that conducts an audit.
An approved auditor independently examines the company’s accounts and supporting evidence before reporting on the financial statements. The auditor must remain independent of the company and comply with the applicable professional, regulatory and ethical requirements.
Before engaging an audit firm, a SHAMS company should confirm that the auditor is accepted by the Authority and eligible to audit the company’s accounts.
VAT Accounting UAE provides accounting, audit preparation and coordination support. The independent audit procedures and final audit opinion must be completed by the appointed SHAMS-approved auditor.
SHAMS Annual Accounts and Audit Requirements
Under SHAMS’ 2024 Companies and Licensing Regulations, the directors must arrange for accounts to be prepared for each financial year.
The accounts must:
- Follow applicable accounting principles or standards
- Present a true and fair view of the company’s financial affairs
- Show the company’s profit or loss
- Comply with the SHAMS Companies Regulations
- Satisfy additional requirements issued by the Authority
The company’s accounts must be approved by the directors and examined and reported on by an auditor. Once the accounts have been approved and examined, the manager must sign them.
The directors must also present the approved accounts and the auditor’s report before a General Meeting for each financial year.
SHAMS Financial Year
The first financial year of a SHAMS company starts on its incorporation date. It must last for at least six months but cannot exceed 18 months.
After the first financial year, the regulations provide for a 12-month financial year running from 1 January to 31 December.
Companies should confirm their first reporting period immediately after incorporation. This helps management plan its bookkeeping, Corporate Tax period, external audit and other annual compliance requirements.
Appointment of a SHAMS Auditor
A company may appoint or remove an auditor through an Ordinary Resolution.
The company must notify SHAMS of the appointment, resignation or removal of its auditor in accordance with the Companies and Licensing Regulations.
The appointment should be completed early enough to give the auditor sufficient time to understand the business, review the records and perform the required audit procedures.
Changing an auditor shortly before the reporting deadline can delay the audit, particularly when accounting records or previous working papers are incomplete.
Accounting Records Required by SHAMS
A SHAMS company must maintain accounting records that:
- Show and explain its transactions
- Disclose its financial position with reasonable accuracy
- Enable the directors to ensure that the accounts comply with the regulations
Reliable records should be maintained throughout the year rather than reconstructed when the external audit begins.
The required information can include:
- Trade licence and incorporation documents
- Memorandum of Association
- Shareholder and ownership records
- Trial balance and general ledger
- Bank statements and reconciliations
- Sales invoices and customer agreements
- Supplier invoices and expense records
- Accounts receivable schedules
- Accounts payable schedules
- Fixed-asset and depreciation records
- Inventory information
- Loan and financing agreements
- Payroll information
- Related-party transaction records
- VAT returns and reconciliation reports
- Corporate Tax records
- Previous audited financial statements
The auditor may request additional documents depending on the company’s activities, transaction volume and assessed audit risks.
Our SHAMS Audit Preparation Services
VAT Accounting UAE helps companies identify and resolve accounting issues before the approved auditor begins the statutory audit.
Our services can include:
- Audit-readiness assessment
- Bookkeeping review and correction
- Trial-balance review
- Bank reconciliation
- Receivable and payable reconciliation
- Fixed-asset schedule preparation
- Inventory-record review
- VAT reconciliation
- Corporate Tax accounting support
- Related-party balance review
- Financial-statement preparation support
- Audit-document organisation
- Approved-auditor coordination
- Assistance with accounting-related audit queries
Audit preparation does not replace the independent external audit. The final report and audit opinion must be issued by the appointed auditor approved by SHAMS.
Our SHAMS Audit Process
1. Review the Company’s Details
We review the company’s licence, legal structure, activities, incorporation date, financial year and current accounting status.
2. Confirm the Auditor Appointment
The company appoints an eligible auditor through an Ordinary Resolution and notifies SHAMS as required.
3. Review the Accounting Records
The trial balance, ledgers, bank statements, invoices and supporting documents are examined for completeness and consistency.
4. Prepare Financial Statements and Schedules
Relevant financial statements and supporting schedules are prepared for the external auditor’s review.
5. Complete the Independent Audit
The approved auditor performs the audit procedures, tests relevant information, obtains evidence and raises questions about material transactions or balances.
6. Approve and Sign the Accounts
The directors approve the accounts. After they have been examined by the auditor, the manager signs the accounts.
7. Present the Accounts and Auditor’s Report
The directors present the approved accounts and the auditor’s report before the company’s General Meeting for the relevant financial year.
SHAMS Audit and UAE Corporate Tax
Audited financial statements can also be important for UAE Corporate Tax. Accounting income generally forms the starting point for calculating taxable income, subject to the applicable tax adjustments.
A SHAMS company seeking Qualifying Free Zone Person treatment must separately evaluate all Corporate Tax conditions. These can include adequate substance, Qualifying Income, transfer pricing compliance and audited financial statements.
Completing a statutory audit does not automatically entitle a company to the 0% Corporate Tax rate. Its activities, income and compliance with every applicable condition must be assessed separately.
Coordinating the audit and Corporate Tax return can help reduce inconsistencies between the financial statements and the information submitted to the FTA.
Why Choose VAT Accounting UAE?
VAT Accounting UAE combines bookkeeping, financial reporting, VAT and Corporate Tax support. This allows us to identify accounting issues that may affect several compliance obligations.
We provide structured preparation, clear communication and confidential document handling based on the company’s activities and financial information.
Our objective is to help management prepare reliable accounts and supporting records before the appointed auditor begins the independent audit.
Frequently Asked Questions
Do SHAMS companies require audited accounts?
SHAMS’ Companies and Licensing Regulations require a company’s accounts to be approved by its directors and examined and reported on by an auditor.
Who can audit a SHAMS company?
The SHAMS regulations define an auditor as a person or corporate entity approved by the Authority that conducts an audit.
How is a SHAMS auditor appointed?
An auditor may be appointed by an Ordinary Resolution. The company must notify the Authority of the auditor’s appointment, resignation or removal.
What is the financial year for a SHAMS company?
The first financial year must be between six and 18 months. After the first financial year, the regulations provide for a 12-month financial year from 1 January to 31 December.
What documents are needed for a SHAMS audit?
Common documents include the trial balance, general ledger, bank statements, invoices, contracts, fixed-asset schedules, receivable and payable records, VAT returns and Corporate Tax information.
How can VAT Accounting UAE help with a SHAMS audit?
VAT Accounting UAE can review bookkeeping records, prepare financial statements and audit schedules, organise supporting documents and coordinate with an auditor approved by SHAMS. The audit opinion must be issued by the appointed approved auditor.
Prepare for Your SHAMS Audit
Contact VAT Accounting UAE for bookkeeping reviews, financial-statement preparation, audit schedules, supporting-document organisation and approved-auditor coordination.
Phone: +971 52 406 3000
Email: info@vataccountinguae.com
Address: Office No. 520, Al Nasr Plaza, Oud Metha Road, next to Oud Metha Metro Station, Dubai, United Arab Emirates