The Dubai Land Department has confirmed that the standards and controls for auditing the annual budgets of service fees and financial reports for jointly owned properties have become more established and tightened, with the Real Estate Regulatory Agency (RERA) signing agreements with 27 audit offices.
The department indicated in a statement yesterday that this comes within the framework of the institution’s constant keenness to strengthen the principle of governance and control over jointly owned properties, through auditing companies, indicating that this step would also strengthen the strategic relationship and privatize work with the department’s partners. By establishing the audit process on auditing firms, with the aim of raising and completing the audit process and the associated transactions.
In accordance with the signed agreements, the audit offices are obligated to audit the financial statements of the joint properties, to obtain reasonable assurance about whether the financial statements as a whole are free from material errors, and thus enable the auditor to express an opinion on whether those data were prepared from all financial aspects, in accordance with international standards To prepare the financial reports “IFRS”, and to provide a report on the financial statements, and the necessary communication in accordance with the international auditing standards “ISAs”, according to the results of the auditor.
The audit office also evaluates the control standards, in addition to the risk management process for joint properties, evaluates the efficiency and effectiveness of operation, assesses the adequacy and reliability of the financial information of these properties, as well as verifies the management company’s compliance with the laws and regulations in force regarding joint ownership real estate, and ensures the extent of The commitment of the management body to manage the common parts of the joint properties in accordance with the scope of the audit prepared by the institution.
Under the provision of reviewing the budget for service fees for joint properties, the agreements stipulated that the audit office shall issue a detailed report on the budgets of the joint real estate, 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 the Corporation in This includes auditor notes and non-compliance issues.
The report also includes the results of the assessment of the control environment, as well as the risk management process for real estate projects, the evaluation of the efficiency and effectiveness of operation and the assessment of the adequacy and reliability of the financial information of the joint property, as well as the results of the assessment of compliance with the laws and regulations in force regarding joint properties.
Transparency and independence
The agreements emphasized the establishment of the principle of transparency and independence, as the audit office must, in fact, be independent in form and in substance.
To achieve this, the audit office is prohibited from having any financial interest in the body subject to auditing or the management body of the responsible partner and his partners and all members of the audit team or their relatives, and their full compliance with the rules of professional conduct issued by the International Federation of Accountants and the local standards issued, in addition to the failure of the audit office Any professional work other than auditing services, such as providing accounting records preparation services, financial information systems design and implementation services, evaluation services, insurance services, internal audit services, investment advisory services, investment banking services, or any Services that would make him audit works that he or she has carried out, or make him an administrative, employee, or advisor for the body subject to auditing.
It is also prohibited for auditing firms included in the agreements to invest in real estate projects by the audit office or their family members, or to employ family members of audit firms in administrative positions in real estate projects, or to practice legal services and expert services not related to auditing accounts, or any other service specified by the institution Real estate regulation.
The Executive Director of the Real Estate Regulatory Agency, Engineer Marawan Bin Ghalita, said: “We always seek to enter into partnership relations with the most prominent specialized institutions from the private sector, to be supportive partners for us in our operations, and to implement our strategies in the best way.”
He added, “In addition, we are working with our various partners to develop standards and controls that govern audit mechanisms, leading to annual budgets that enjoy the highest levels of integrity and credibility, especially when it comes to service allowances.”
The best services
In turn, the first director of the Real Estate Relations Regulation Department at the Real Estate Regulatory Agency, Mohammed Khalifa bin Hammad, said, “Signing such agreements with the elite of companies from various specialties in the private sector comes within the framework of the institution’s keenness to provide the best auditing services to our customers and raise the efficiency of And the completion of the audit process and the associated transactions ». He added, “We continue to search for the best partners to help us achieve our goals, find the best financial solutions for jointly owned properties, and provide more options for owners.”
Under the agreements, the offices provide services for auditing the financial statements of joint properties, assessing control standards and the risk management process, and verifying the management firm’s compliance with relevant laws and regulations, and its commitment to managing the common parts.
In addition, the company reviews the service fee for jointly owned real estate, and shows the extent of the management companies ’compliance with all conditions, controls, regulatory requirements, regulations and directives issued by the corporation in this regard. It also assesses the control environment, in addition to the risk management process for real estate projects, evaluates the efficiency and effectiveness of operation, and assesses the efficiency and reliability of the financial information of the joint property. The review includes the results of assessing compliance with applicable laws and regulations regarding condominiums.
– Auditing firms covered by the agreements are prohibited from investing in real estate projects.
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