DLD enhances auditing standards and controls on annual budgets for JOPs

DUBAI, Real Estate Regulatory Agency (RERA) at Dubai Land Department (DLD) has signed agreements with 27 audit offices, establishing and tightening standards and controls for auditing annual budgets for service charges and financial reports for jointly owned properties (JOPs) in Dubai.

The auditing firms are required to audit the financial statements of JOPs to affirm whether their respective financial statements are free from material misstatement. Auditors can comment on whether the data was prepared in accordance with the International Financial Reporting Standards (IFRS) as well as provide a report on the financial statements and the necessary communication under international auditing standards (ISAs).

The firms will also evaluate the control standards and the risk management process for JOPs as well as assess the efficiency and effectiveness of operations, and the adequacy and reliability of the financial information for properties. The firms can ensure that a management company complies with the applicable laws and regulations regarding JOPs as well as ensure the extent of their commitment to managing the common parts of JOPs in accordance with the scope of the audit prepared by RERA.

The agreement also stipulates that the auditing firm shall issue a detailed report on a property’s budgets, including a statement of the extent of compliance with all the conditions, controls and regulatory requirements specified in Law No. 6 of 2019 and the regulations and directives issued by RERA in this regard, including auditor notes and non-compliance issues. The report would also include the results of the assessment of the control environment, in addition to the risk management process for real estate projects, the assessment of the efficiency and effectiveness of operation, and the assessment of the adequacy and reliability of the financial information of JOPs. It also includes the results on the assessment of compliance with the laws and regulations enforced regarding JOPs.

All members of the audit team and their relatives must comply with the rules of professional conduct issued by the International Federation of Accountants and the local standards issued.

Marwan bin Ghalita, CEO of RERA, commented, “We are continuously seeking partnerships with the most prominent and specialised institutions from the private sector that would help us optimally implement our strategies. This reflects our keenness to strengthen the principle of governance and control by using audit firms to audit JOPs. Moreover, we are working with our various partners to develop standards and controls that govern audit mechanisms, reach annual budgets with the highest levels of integrity and credibility, especially when it comes to service allowances, and develop financial reports related to the management of a property. We fully believe that such relationships and their objectives would help maintain Dubai’s position as a leading real estate destination that guarantees all parties’ rights.”

Mohammed Khalifa bin Hammad, Senior Director of the Real Estate Relations Regulatory Department at RERA, said, “The signing of such agreements with prominent companies across various specialties in the private sector comes within the framework of RERA’s keenness to provide the best auditing services to our customers and raise the efficiency and completion of the auditing process and related transactions. We will continue to seek the best partners to help us achieve our goals and the best financial solutions for JOPs, ultimately providing more options for owners.”

 

Source: Emirates News Agency

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