Why audits overrun
Audits rarely overrun because something is wrong. They overrun because the evidence exists somewhere in the business and not in a form anybody can hand over.
The auditor asks for a breakdown of a balance. Somebody rebuilds it from the ledger. It does not agree to the accounts, so somebody investigates. Two weeks later the difference turns out to be a reclassification made in month four that nobody documented. Multiply that across a dozen balances and the audit takes six weeks instead of two, costs proportionately more, and produces a management letter full of findings that are really findings about the preparation rather than about the business.
The preparation is what removes that, and it is almost entirely mechanical.
When this applies to you
Free zone companies, most of which require audited financial statements for licence renewal. Companies subject to statutory audit under their constitutional documents or a shareholder agreement. Businesses claiming Qualifying Free Zone Person status, for which audited statements are a condition.
Also businesses being audited for the first time, where nobody internally has been through the process and the auditor’s requests arrive without context. And businesses that had a difficult audit last year and would rather not repeat it.
How the engagement runs
The work breaks into stages, and each one has to close before the next starts:
- Close the year properly. All reconciliations complete, cut-off tested, accruals and prepayments recognised, before the auditor arrives rather than during the fieldwork.
- Build a lead schedule for every significant balance, agreeing to the trial balance and supported by the underlying detail.
- Document the judgements — revenue recognition, provisions, impairment, going concern — with the reasoning recorded, not reconstructed under questioning.
- Identify related party transactions and balances and prepare the disclosure, which is one of the most common sources of late audit findings.
- Assemble supporting documentation: contracts, agreements, confirmations, legal correspondence, board minutes.
- Prepare the draft financial statements with complete notes, rather than leaving the auditor to draft them.
- Anticipate the questions. Unusual transactions, large journals, significant estimates — explained before they are asked about.
- Manage the fieldwork, responding to requests as a single point of contact rather than through whoever happens to be available.
- Deal with the management letter, and act on it rather than filing it.
The audit file, as an auditor actually wants it
There is a difference between having the information and having it in the order it will be asked for. The second takes a fraction longer to build and saves considerably more:
- A lead schedule per balance, agreeing to the trial balance, with the movement explained
- Bank confirmations requested early, since they depend on third parties and are a common cause of delay
- Receivables and payables listings with ageing, and a basis for any impairment provision
- Fixed asset register with additions, disposals and depreciation reconciled to the accounts
- Revenue support: contracts, and for milestone billing the basis of recognition
- Related party listing with the nature and value of each transaction
- A journals listing for the year, with anything unusual explained in advance
- Board minutes, loan agreements and legal correspondence
Requesting bank confirmations early is the single highest-return item on that list, because it is the one item whose timing is entirely outside your control.
Which auditor, and what we can and cannot do
Most free zones require the auditor to be on their approved list, and those lists differ by zone. Whether any given firm can sign your audit is therefore a zone-by-zone question rather than a general one.
We will tell you plainly whether we are able to act as auditor for your specific zone. Where we are not, we prepare the business and work alongside the firm that is — which is a perfectly normal arrangement and is often the better one, since preparation and audit sitting with different firms removes any question of independence.
What we will not do is imply we can sign an audit we cannot. Ask us the question directly and you will get a direct answer.
What we see go wrong most often
Where businesses get caught:
- Starting when the auditor arrives. Preparation done during fieldwork is the definition of an overrunning audit.
- Balances with no supporting schedule, rebuilt under time pressure and frequently not agreeing.
- Judgements reconstructed rather than documented, which reads very differently to a reviewer.
- Related party transactions identified at year end, when the detail needed to describe them has to be recovered from memory.
- Bank confirmations requested late, holding up an otherwise complete audit for weeks.
- Leaving the auditor to draft the financial statements, which costs more and gives you less control over the presentation.
- Filing the management letter instead of acting on it, and receiving the same findings next year.
Timing and deadlines
Preparation should begin before the year end, not after it. Related party identification, revenue recognition policy and provision methodology are all far easier to establish while the transactions are happening.
After the year end, the target is a complete audit file within four to six weeks, with fieldwork immediately after. Working backwards from a free zone deadline — frequently within 90 days of the financial year end — that leaves very little slack, which is why businesses that start in month two rarely make it comfortably. Most free zones require audited financial statements; requirements differ by zone (for example DMCC expects audited accounts within 90 days of financial year end)
What you get
- A complete audit file, indexed in the order the auditor will work through it
- Lead schedules agreeing to the trial balance for every significant balance
- Documented judgements on the areas requiring them
- Draft financial statements with complete notes
- Related party disclosure schedule
- Fieldwork managed through a single point of contact
- A response plan for the management letter
What we need from you
What we ask for up front:
- Final trial balance and general ledger
- Prior year audited financial statements and the audit file
- Bank statements, reconciliations and confirmation contact details
- Fixed asset register
- Receivables and payables listings with ageing
- Revenue contracts, particularly those spanning periods
- Loan, lease and related party agreements
- Board minutes and any legal correspondence
What it costs
Fixed fee, scoped on the size of the entity and the state of the records. Where we maintain the bookkeeping, preparation is substantially cheaper because most of the file is a by-product of the monthly cycle.
The fee is usually recovered in the audit fee itself, because auditors price on expected effort and a well-prepared client is visibly less effort. Where it is not recovered in fees it is recovered in time, which for an owner-managed business is frequently the scarcer resource.
Related
Frequently Asked Questions
Does my UAE company need an audit?
Most free zones require audited financial statements; requirements differ by zone (for example DMCC expects audited accounts within 90 days of financial year end) Requirements differ by zone, and audited statements are also a condition of Qualifying Free Zone Person status. Mainland requirements depend on the entity type and constitutional documents.
When is the free zone audit deadline?
It differs by zone — several require audited accounts within 90 days of the financial year end, others align with licence renewal. Because it is zone-specific, we work to your zone’s actual requirement rather than a general rule, and it is usually the tightest deadline in your calendar.
Can you be our auditor?
That depends on your zone’s approved auditor list, which differs by zone. Ask us directly and you will get a direct answer. Where we cannot act as auditor, we prepare the business and work alongside the firm that can — which also removes any independence question.
How long does an audit take?
Two to three weeks of fieldwork for a well-prepared owner-managed business, considerably longer where the preparation happens during the audit. The difference is almost entirely in whether a schedule existed for each balance before the auditor asked for it.
What is a qualified opinion?
An opinion with a reservation — the auditor could not obtain sufficient evidence over something, or disagrees with a treatment. It matters because banks, investors and free zone authorities read it, and because it tends to attract further questions rather than closing them.
What documents will the auditor ask for?
Lead schedules for each significant balance, bank confirmations, receivables and payables ageing, the fixed asset register, revenue contracts, related party details, board minutes, loan agreements and a journals listing. Requesting bank confirmations early is the single highest-return preparation item, because their timing is outside your control.
We had a difficult audit last year. Can that be avoided?
Usually, yes, and the cause is nearly always preparation rather than the business. Start before the year end, build the file as the year closes rather than during fieldwork, and act on last year’s management letter instead of filing it.
Tell us your year end and your free zone. We will work backwards from the actual deadline and tell you when the file needs to be complete.
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Last reviewed 27 July 2026. Rates, thresholds and deadlines change — the e-invoicing provider deadline has already moved once. Confirm current requirements with the Federal Tax Authority before acting, or ask us to check your position.