Legislation Details
- Full Title: Federal Decree by Law on Regulating the Auditing and Accounting Professions
- Law Type: Federal Decree-Law
- Law Number: [41] of 2023
- Issued Date: 28 Sep 2023
- Effective Date: 29 Mar 2024
- Official Gazette: No. 760
- Sector: Labour, Residency and Professions
- Status: Active
- Number of Articles: 82
- Chapters/Parts: 6
- Amendments: 0
Summary
This Federal Decree-Law regulates the auditing and accounting professions in the United Arab Emirates. Its primary objectives are to enhance the efficiency and integrity of auditing and accounting services, foster increased confidence in the business community and investors, and establish accountability mechanisms for professionals who engage in harmful practices. The law applies to chartered accountants and accounting firms practicing within the UAE, as well as those in free zones who wish to operate outside the free zones. (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 1-3) The law is significant for businesses and individuals in the UAE, as it sets clear standards and requirements for the auditing and accounting professions. It ensures that only licensed professionals can provide these services, and it empowers the Ministry of Economy to monitor and discipline professionals who violate the law. This helps to maintain the integrity of financial information and strengthen investor confidence in the UAE's business environment. (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 1-5)
What is the scope and purpose of this law?
The scope of this Federal Decree-Law is to regulate the auditing and accounting professions within the United Arab Emirates. It applies to chartered accountants and accounting firms practicing the profession in the UAE, as well as those in free zones who wish to operate outside the free zones. The law does not apply to government audit tasks conducted by government oversight and accounting bodies. (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 3) The primary objectives of this law are to: 1) regulate the accounting and auditing profession and its practice within the UAE; 2) enhance the efficiency of services and tasks associated with the profession, fostering increased confidence among the business community and investors; and 3) govern the accountability mechanisms for professionals in the event they are substantiated to have engaged in or contributed to practices harmful to the business community. (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 2)
What are the key definitions under this law?
The key definitions under this Federal Decree-Law include:
- State: United Arab Emirates
- Ministry: Ministry of Economy
- Minister: Minister of Economy
- Authority: Securities and Commodities Authority
- Competent Authority: The concerned local authority in each Emirate
- Profession: Auditing and Accounting Professions
- Chartered Accountant: The natural person duly licensed to practice the profession and provide the professional services stipulated in Article 4
- Licensing Office: An establishment duly licensed to practice the profession
- Final License: A certificate granted by the Ministry to a natural or legal person meeting the licensing conditions
- Economic License: A license granted by the competent authority for economic licensing, authorizing the accounting firm to engage in the licensed activity
- Profession Standards: Professional standards adopted by the Ministry for practicing the profession
- Other Confirmation Services: Services a chartered accountant or accounting firm is licensed to perform concerning financial statements
- Professional Compliance Committee: The committee formed pursuant to Article 22
(Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 1)
What are the main obligations and requirements?
The main obligations and requirements under this Federal Decree-Law include: 1. No natural or legal person may practice the profession or provide any related work or services within the UAE unless they have obtained the required licenses. (Art. 6) 2. Chartered accountants must practice the profession either separately through their own firm or by working for an accounting firm or branch of a foreign accounting firm licensed in the UAE. (Art. 6) 3. Accounting firms must practice the profession in one of the legal forms specified in the law, such as a professional company consisting of two or more chartered accountants. (Art. 6) 4. Chartered accountants must submit a written pledge to the Ministry asserting they will perform their work with honesty and integrity, uphold the laws of the UAE, preserve the integrity of the profession, and adhere to its established standards and ethics. (Art. 7) 5. Chartered accountants and accounting firms must notify the Ministry and competent authority of any amendments or changes to their professional license data within 30 days. (Art. 9) (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 6-7, 9)
What licensing, registration, or approval requirements exist?
This Federal Decree-Law establishes the following licensing and registration requirements: 1. Individuals aspiring to practice the profession in the UAE must obtain a professional license from the Ministry of Economy. The executive regulations specify the types of professional licenses, conditions, prerequisites, and duration. (Art. 8) 2. Accounting firms must obtain an economic license from the competent authority for economic licensing in each emirate before practicing their activity. The authority must verify the Ministry's approval before issuing, amending, or revoking the economic license. (Art. 14) 3. Accounting firms providing auditing and review services for public joint-stock companies and public investment funds must obtain accreditation from the Securities and Commodities Authority. (Art. 15) (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 8, 14-15)
What rights and protections does this law provide?
This Federal Decree-Law does not explicitly outline any specific rights or protections granted to individuals or businesses. The law is focused on regulating the auditing and accounting professions, establishing licensing and practice requirements, and defining accountability mechanisms for professionals. It does not appear to provide any direct rights or protections beyond the regulatory framework for the profession. (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023)
Which authorities or bodies are responsible for enforcement?
The key authorities and bodies responsible for enforcement under this Federal Decree-Law are: 1. The Ministry of Economy: The Ministry is responsible for regulating the profession, granting professional licenses, establishing and approving profession standards, monitoring and inspecting professionals and accounting firms, and referring violations to the Professional Compliance Committee. (Art. 5) 2. The Professional Compliance Committee: This committee is formed pursuant to Article 22 and is responsible for reviewing violations attributed to professionals and determining appropriate disciplinary decisions. 3. The Securities and Commodities Authority: The Authority is responsible for accrediting accounting firms that provide auditing and review services for public joint-stock companies and public investment funds. (Art. 15) 4. The competent local authorities in each emirate: These authorities are responsible for issuing, amending, and revoking the economic licenses of accounting firms. (Art. 14) (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 5, 14-15, 22)
What are the penalties for non-compliance?
This Federal Decree-Law does not specify any penalties for non-compliance. The law states that the Executive Regulations will determine the "disciplinary penalties" to be imposed on professionals, but the source text does not provide any details on the actual penalties. (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 20)
What fees, charges, or financial provisions are specified?
The Federal Decree-Law does not specify any fees, charges, or other financial provisions related to the regulation of the auditing and accounting professions. The law states that the "Fees" will be determined by the Executive Regulations, but the source text does not provide any details on the specific fees or financial requirements. (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 37)
What exemptions or exceptions apply?
The only exemption specified in this Federal Decree-Law is that the provisions of the law do not apply to government audit tasks conducted by government oversight and accounting bodies, including their employees, when exercising powers thereof over government agencies, companies, and institutions subject to the oversight of those bodies in accordance with their respective establishment laws. (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 3)
How are disputes resolved under this law?
The Federal Decree-Law does not provide any details on dispute resolution mechanisms. The law states that professionals can file a "grievance against disciplinary penalties" imposed by the Professional Compliance Committee, but it does not specify the procedures for this grievance process. (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 23)
What are the key deadlines and time limits?
The key deadlines and time limits specified in this Federal Decree-Law include: 1. Chartered accountants and accounting firms must notify the Ministry and competent authority of any amendments or changes to their professional license data within 30 days. (Art. 9) 2. Chartered accountants encountering circumstances that impede the practice of the profession must submit a request to temporarily suspend their professional license within 30 days. (Art. 10) 3. A person whose professional license has been revoked may apply for a new license after a period of at least one year from the date of revocation, or five years if the license was revoked by the Professional Compliance Committee. (Art. 12) (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 9-10, 12)
How does this law interact with other UAE legislation?
This Federal Decree-Law on Regulating the Auditing and Accounting Professions repeals Federal Law No. (12) of 2014 Regulating the Auditors Profession, as amended. (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 39) The law also references the following related legislation: - The Constitution of the United Arab Emirates - Federal Law No. (1) of 1972 Concerning the Jurisdictions of Ministries and Powers of Ministers, as amended (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Preamble)
When did this law come into effect?
This Federal Decree-Law on Regulating the Auditing and Accounting Professions was issued on 28 September 2023 and will come into effect on 29 March 2024. (Federal Decree by Law on Regulating the Auditing and Accounting Professions, 2023, Art. 40)
Source Documents
This article analyses Federal Decree by Law on Regulating the Auditing and Accounting Professions for legal research and educational purposes. For the purpose of interpretation and application, reference must be made to the original Arabic text. In case of conflict, the Arabic text prevails. This does not constitute legal advice.