Audit of Public Joint Stock Companies in UAE | Requirements

Within the developing landscape of Public Joint Stock Companies (PJSCs), compliance with statutory audit requirements matters significantly. AFD Auditors plays a key role in helping these companies maintain transparency and meet applicable regulatory standards.

What Are the Key Audit Requirements for Public Joint Stock Companies?

PJSCs operate within a strict regulatory framework set out by Federal Decree-Law No. 32 of 2021, which forms the foundation for strong financial governance. This law sets specific audit requirements, including the following.

Transparency and Accountability

Transparency and accountability are foundational principles for PJSCs, and audit requirements play a central role in upholding them. Careful, independent audits demonstrate a company’s genuine commitment to transparency, building trust and reliability with stakeholders.

Compliance With Financial Reporting Standards

A core part of PJSC audit requirements is compliance with globally recognized financial reporting standards. International Financial Reporting Standards (IFRS) support consistency and precision across financial statements, strengthening investor confidence and supporting integration with international markets.

Governance and Internal Controls

Federal Decree-Law No. 32 places real emphasis on governance and internal controls within PJSCs, requiring evaluation of internal control system effectiveness, compliance with applicable rules, and reduced exposure to financial misconduct or fraud.

Risk Assessment and Mitigation Strategies

Assessing risk management frameworks is also part of the audit requirement, covering financial, operational, and compliance-related risks, along with the mitigation strategies in place to protect both the company’s interests and investors’ capital.

Selection and Qualifications of Audit Firms

Federal Decree-Law No. 32 sets specific standards for selecting audit firms entrusted with auditing PJSCs. These firms need to demonstrate genuine expertise, independence, and compliance with professional standards. Demanding qualifications like these help confirm audits are carried out by capable professionals committed to the highest standards of integrity and accuracy.

Also check: Statutory Audit Services in Dubai

Reporting and Communication Protocols

One of the essential aspects of audit requirements is the reporting and communication protocol auditors need to establish. Open, transparent reporting is central to how audit findings, potential issues, and recommendations reach the board of directors, investors, and regulatory authorities.

Technological Advances in Auditing

Advances in technology continue to reshape the audit landscape, giving auditors access to more sophisticated tools and techniques for comprehensive, efficient audits. PJSCs that lean into these advances get more precise, in-depth audit processes as a result.

Documents Required for Auditing Public Joint Stock Companies

Here’s a structured list of the key documents required for a PJSC audit under Federal Decree-Law No. 32 of 2021:

Document	Purpose and Description
Financial Statements	Balance sheets, income statements, cash flow statements, and notes to accounts, giving a complete picture of the company’s financial position. Compliance with the applicable accounting standard, such as IFRS, is required.
Internal Control Reports	Show the effectiveness of internal controls the PJSC has put in place to protect assets, prevent fraud, and maintain regulatory compliance.
Minutes of Board Meetings	Records of board decisions, reviewed by auditors to confirm compliance with legal requirements.
Shareholder Agreements and Resolutions	Agreements and resolutions covering dividends, capital changes, and other major decisions, reviewed to confirm legal and regulatory compliance.
Corporate Governance Reports	PJSCs are required to document governance structure, processes, and compliance procedures, which auditors review against regulatory requirements.
Tax Filings and Documentation	Tax returns and supporting documentation, checked for accurate reporting and compliance with applicable tax rules.
Contracts and Agreements	Reviewed to confirm compliance with legal obligations and assess how contractual arrangements affect the company’s financial position.
Regulatory and Compliance Records	Records demonstrating compliance with industry-specific regulations and legal requirements, verified as part of the audit.

Also check: External Audit Services in Dubai

Roles and Responsibilities of Auditors in Public Joint Stock Companies

Auditors play a genuinely important role in a PJSC’s financial ecosystem, acting as independent verifiers of the accuracy and reliability of financial information. Federal Decree-Law No. 32 of 2021 sets out specific roles and responsibilities.

Conducting Detailed, Independent Audits

At the core of an auditor’s responsibility sits the obligation to conduct detailed, independent audits of a PJSC’s financial records, carefully examining:

1. Financial statements
2. Transactions
3. Internal controls

Validating Compliance With Regulatory Frameworks

Auditors need to verify that PJSCs are following the regulatory frameworks set out under Federal Decree-Law No. 32 of 2021, assessing compliance with:

1. Financial reporting standards
2. Governance structures
3. Other applicable legal requirements

This confirms the company is operating within the boundaries the decree sets.

Evaluating Internal Control Systems

Another core responsibility is evaluating how effectively a PJSC’s internal control systems are actually working, including:

1. Processes in place to safeguard assets
2. Fraud prevention
3. Compliance assurance

Auditors offer recommendations for strengthening these controls to reduce risk more effectively.

Reporting Audit Findings and Recommendations

Once the audit is complete, auditors prepare thorough reports covering:

1. Findings
2. Assessments
3. Recommendations

These reports matter significantly to investors, regulators, and the board of directors, offering a clear read on the PJSC’s financial health and flagging areas that need attention.

Ensuring Independence and Objectivity

Federal Decree-Law No. 32 places real weight on auditor independence and objectivity. Auditors need to maintain an impartial stance, free from conflicts of interest, with opinions and decisions based strictly on accurate evidence and professional judgment.

Collaborating With Stakeholders and Regulators

Auditors work collaboratively with internal stakeholders and regulatory bodies to keep audits consistent and compliant. Active communication supports the exchange of important information, letting auditors carry out their duties thoroughly and transparently.

Continuing Professional Development

Under the decree’s requirements, auditors are expected to pursue ongoing professional development, staying current on evolving regulatory frameworks, auditing standards, and industry trends. This ongoing education keeps auditors genuinely equipped to perform their responsibilities effectively.

Maintaining Ethical Standards and Integrity

Adherence to ethical standards is essential for auditors working with PJSCs. They’re expected to conduct themselves with genuine integrity, maintaining confidentiality, objectivity, and professionalism throughout the audit process.

Evolving Trends in PJSC Auditing

Trend	Description
Technological Integration	AI, data analytics, and automation are streamlining audit processes, improving accuracy, efficiency, and analytical depth.
Focus on Risk Management	PJSC audits increasingly take a proactive approach to risk, actively identifying and addressing financial, operational, and compliance risks as they emerge.
Enhanced Reporting and Transparency	The decree’s emphasis on transparency is pushing auditors toward more complete, transparent reporting overall.
Adoption of ESG Auditing	With the global shift toward Environmental, Social, and Governance (ESG) factors, PJSC audits increasingly assess sustainability efforts, ethical practices, and social impact alongside financial performance.
Emphasis on Independence and Objectivity	Federal Decree-Law No. 32 continues to reinforce the need for genuine auditor independence, with rigorous ethical standards keeping assessments neutral and free from conflicts of interest.

Also check: Financial Statement Audit Services in Dubai

Worked Example

A Dubai-listed PJSC’s annual audit surfaces a gap between its documented corporate governance structure and how board decisions are actually being made in practice, specifically, a committee referenced in governance reports hasn’t met in over a year. The auditor flags this as a governance compliance issue under Federal Decree-Law No. 32 of 2021, not just a documentation oversight, since it affects whether the company’s actual practices match what’s being reported to shareholders and regulators. The PJSC reactivates the committee and updates its governance reporting before the next annual filing.

Common Mistakes in PJSC Audit Compliance

• Treating governance reports as a documentation exercise. Reports need to reflect what’s actually happening, not just what’s formally on record.
• Underestimating ESG audit expectations. ESG considerations are increasingly part of PJSC audit scope, not a separate, optional exercise.
• Choosing an audit firm without confirming independence safeguards. Federal Decree-Law No. 32 places real weight on this, and it’s worth verifying directly, not assuming.
• Delaying internal control evaluation until year-end. Ongoing evaluation catches issues earlier than a once-a-year review.

Frequently Asked Questions

What law governs audit requirements for PJSCs in the UAE?

Federal Decree-Law No. 32 of 2021, the UAE’s Commercial Companies Law, sets the audit and governance framework applicable to PJSCs.

What documents are typically required for a PJSC audit?

Financial statements, internal control reports, board meeting minutes, shareholder agreements, corporate governance reports, tax filings, contracts, and regulatory compliance records.

Why does auditor independence matter so much for PJSCs?

Because PJSCs involve public shareholders relying on audited figures, independence is what keeps the audit opinion credible and free from conflicts of interest.

Is ESG auditing now part of standard PJSC audit scope?

It’s becoming increasingly common, with auditors assessing sustainability efforts, ethical practices, and social impact alongside traditional financial review.

How is technology changing PJSC audits?

AI, data analytics, and automation are helping auditors work through larger volumes of data more accurately and efficiently, supporting deeper analysis than manual review alone.

Conclusion

The audit requirements for Public Joint Stock Companies serve as genuine pillars of financial governance and transparency. Audit firms in Dubai work through the complexity of Federal Decree-Law No. 32 of 2021 on behalf of their PJSC clients, with a track record of expertise in maintaining compliance and reliability across these audits.

That expertise reflects the genuine commitment needed to protect audit integrity, building trust and accountability within Dubai’s growing corporate finance landscape.