Internal Audit Service UAE — IIA-Compliant Independent Abdelhamid & Co Sharjah

Internal Audit Service in UAE — IIA-Compliant, Independent & Risk-Based

Quick answer: Internal audit in the UAE is an independent assurance and consulting activity that evaluates the effectiveness of governance, risk management, and internal controls. For listed public joint-stock companies it is mandatory under Article 103 of Federal Decree-Law No. 32 of 2021 and SCA governance requirements. For licensed financial institutions it is required by the Central Bank of the UAE (CBUAE). For all other entities it is strongly recommended as a governance best practice and is increasingly required by banks and international partners.

Abdelhamid & Co Chartered Accountants and Auditors LLC (License: LC0106-01 | TAN: 30003958 | TAAN: 20033908) provides independent internal audit services to companies and institutions operating across the UAE. Our practice applies the Global Internal Audit Standards (GIAS), issued by the Institute of Internal Auditors (IIA) and effective January 2025, to strengthen governance, risk management, and internal control environments in line with Ministry of Finance requirements, SCA governance rules, and CBUAE regulations. We operate as independent consultants, delivering objective assessments free from conflicts of interest, enabling senior management and the board to make decisions on sound control foundations. For comprehensive assurance offerings, see our Audit & Assurance Services page.

What Is Internal Audit and Why Does Your Business Need It?

Internal audit is an independent assurance and advisory activity designed to evaluate operational effectiveness and add genuine value to the organisation. Unlike external audit — which focuses on the fairness of financial statements for disclosure purposes under the International Standards on Auditing (ISA) issued by IAASB — internal audit analyses processes, identifies weaknesses in the control environment, and assesses compliance with internal policies and external regulations. In the UAE's fast-paced business environment, internal audit is a cornerstone of corporate governance and compliance with Federal Decree-Law No. 32 of 2021 on Commercial Companies, as well as CBUAE and SCA requirements for listed entities and licensed financial institutions.

Regulatory Framework & Professional Standards

  • IIA Global Internal Audit Standards (GIAS 2025) — The definitive international standards for internal audit, effective January 2025, covering independence, objectivity, reporting quality, and function management.
  • Federal Decree-Law No. 32 of 2021 on Commercial Companies — Article 103 requires public joint-stock companies to establish an independent audit committee and an effective internal audit function; minimum internal control requirements apply to all companies.
  • Securities and Commodities Authority (SCA) Governance Requirements — Mandates listed companies to maintain an independent audit committee and an effective internal audit function reporting directly to that committee.
  • Central Bank of the UAE (CBUAE) Requirements — Requires licensed financial institutions to maintain an independent internal audit function compliant with Basel III frameworks and prudential supervision requirements.
  • Federal Decree-Law No. 20 of 2018 on Anti-Money Laundering and Countering the Financing of Terrorism — Classifies audit and accounting firms as Designated Non-Financial Businesses and Professions (DNFBP) and requires due-diligence procedures and compliance-focused audit reporting.
  • Federal Decree-Law No. 47 of 2022 on Corporate Tax — Article 54 requires retention of accounting records and supporting documents for a minimum of seven years; internal audit ensures ongoing compliance with this obligation.
  • Federal Decree-Law No. 28 of 2022 on Tax Procedures — Article 30 requires retention of records and supporting documents; internal audit ensures readiness for any tax audit inspection under Article 25.
  • Ministerial Decision No. 82 of 2023 — Entities with revenues exceeding AED 50 million or Qualifying Free Zone Persons (QFZP) must submit audited financial statements for corporate tax purposes, making a parallel internal audit programme a practical necessity.
  • Federal Decree-Law No. 45 of 2021 on Personal Data Protection (PDPL) and Cabinet Decision No. 33 of 2023 — Require that personal data of employees and clients processed during internal audit procedures is handled with appropriate safeguards.
  • Cabinet Decision No. 129 of 2025 on Administrative Penalties — Specifies administrative penalties for tax violations; proactive internal audit materially reduces exposure to these sanctions.
  • COSO Internal Control Framework & COSO ERM — The global reference standards for designing and evaluating internal control systems and enterprise risk management frameworks.
  • ISO 31000 Risk Management Standard — Guides the risk-based audit planning methodology applied in our internal audit engagements.

Key Facts — Internal Audit in the UAE

  • FDL No. 32/2021 (Article 103): Requires public joint-stock companies to establish an independent audit committee and an effective internal audit function.
  • Ministerial Decision 82/2023: Entities with revenues above AED 50 million or QFZP must submit audited financials for corporate tax — making a parallel internal audit programme essential, not optional.
  • FDL No. 47/2022 (Article 54): Accounting records must be retained for at least seven years — internal audit verifies ongoing compliance.
  • GIAS 2025: Requires a risk-based audit plan reviewed annually and presented to the board, with findings reported directly to the audit committee.
  • Outsourced Internal Audit: Internationally recognised under IIA standards; delivers expertise and independence for organisations without a fully staffed internal team.
  • SCA Listed Companies: Annual internal audit report must be submitted to the audit committee before board approval.
  • Cabinet Decision No. 129 of 2025: Defines administrative penalties for tax violations — proactive internal audit helps avoid these sanctions.

When Is Internal Audit Mandatory or Essential?

Listed Public Joint-Stock Companies

SCA governance requirements mandate an effective internal audit function for all companies listed on UAE securities markets, reporting directly to the audit committee. Federal Decree-Law No. 32 of 2021 (Article 103) reinforces this obligation by requiring the establishment of an independent audit committee.

CBUAE-Licensed Financial Institutions

The Central Bank of the UAE requires banks, insurance companies, and other licensed financial institutions to maintain an independent and effective internal audit function consistent with Basel III frameworks and prudential oversight requirements. Absence of this function exposes the institution to regulatory action.

Corporate Tax Entities with Revenues Above AED 50 Million or QFZPs

Under Ministerial Decision No. 82 of 2023, these entities must submit audited financial statements for corporate tax purposes. Against this backdrop, a parallel internal audit programme becomes a practical necessity to ensure record accuracy and procedural integrity before the external audit.

Entities Subject to AML Compliance Obligations

Federal Decree-Law No. 20 of 2018 classifies audit and accounting firms as DNFBPs. Entities working with these firms are expected to maintain robust internal control systems demonstrating compliance with anti-financial-crime requirements — a standard that regular internal audit directly supports.

Companies Seeking Bank Financing or International Partnerships

Major banks and international business partners typically require recent internal audit reports as part of creditworthiness packages or partnership proposals. An active internal audit function strengthens institutional credibility and accelerates financing approvals.

Scope of Our Internal Audit Services

Operational Audit

Evaluates the efficiency and effectiveness of operational processes — from supply chain and administrative procedures to revenue and expenditure cycles. We identify waste, duplication, and control gaps, and deliver practical recommendations to improve performance and reduce costs, applying the COSO framework to measure operational control effectiveness.

Financial Internal Audit

Focuses on the accuracy of accounting records, segregation of duties, approval controls, and asset protection. We verify that expenditure, revenue, payroll, and inventory cycles operate within approved policies and ensure compliance with the record-retention requirements under Article 54 of Federal Decree-Law No. 47 of 2022 and Article 30 of Federal Decree-Law No. 28 of 2022.

Tax & Regulatory Compliance Audit

We verify compliance with Federal Tax Authority (FTA) requirements (VAT and corporate tax), commercial company law, and sector-specific regulations. We apply Federal Decree-Law No. 28 of 2022 to ensure readiness for any tax inspection, review compliance with Ministerial Decision No. 82 of 2023 on audited financial statements, and help avoid the penalties specified under Cabinet Decision No. 129 of 2025.

IT & Cybersecurity Audit

We review access control architecture, database security, data integrity, and business continuity arrangements, ensuring that personal data processing complies with Federal Decree-Law No. 45 of 2021 (PDPL) and Cabinet Decision No. 33 of 2023. This audit is essential for organisations relying on ERP systems or processing sensitive client and employee data.

Risk Management Audit

We assess the effectiveness of the enterprise risk management framework and its alignment with ISO 31000 and COSO ERM. We identify unaddressed risks, measure the adequacy of existing controls, and construct a comprehensive risk map to support board and audit committee decisions in accordance with GIAS 2025 requirements.

Fraud Risk Assessment & Prevention Programmes

We design fraud detection tests and review weaknesses in the internal control environment that could enable manipulation, embezzlement, or accounting fraud. According to the ACFE 2024 Report, the median duration of fraud before detection is 12 months — regular internal audit significantly narrows this window. When fraud indicators are found, we refer the matter to our Forensic Audit Services for an independent investigation.

Our Internal Audit Methodology

  1. Risk-Based Audit Planning: We analyse the organisation's risk universe and prioritise audit engagements by activity significance and risk exposure, in line with GIAS 2025 and COSO ERM.
  2. Internal Audit Charter: We document the scope, authority, responsibilities, and reporting relationships of the audit function with the board and audit committee as required by IIA standards.
  3. Process & Control Environment Understanding: We conduct in-depth interviews with management, document procedures, and map key control points against COSO's five components.
  4. Audit Programme Design: We design control tests and substantive procedures for each audit area, incorporating relevant legislation and regulatory requirements.
  5. Fieldwork Execution: We perform tests, analyse data, and document evidence systematically in compliance with GIAS 2025 and PDPL data protection provisions.
  6. Analysis & Finding Identification: We analyse control gaps, assess materiality, and identify root causes of each weakness, classified by risk level.
  7. Audit Report: We deliver a structured report comprising an executive summary, risk ratings, findings, recommendations, and a proposed remediation plan with defined timelines.
  8. Follow-Up & Recommendation Monitoring: We monitor implementation of recommendations against agreed deadlines and provide periodic progress reports to senior management and the audit committee.

Why Choose Abdelhamid & Co for Internal Audit?

  • Licensed by the UAE Ministry of Economy — Licence No. LC0106-01
  • Registered Tax Agent with the Federal Tax Authority — TAN: 30003958 | TAAN: 20033908
  • Registered in the Ministry of Economy Register of Licensed Practising Auditors — No. 956
  • Fellow of the Emirates Association of Accountants and Auditors — EAAA No. 124
  • Fellow of the International Arab Society of Certified Accountants — IASCA No. 1361
  • Practical experience auditing multi-sector organisations: commercial, industrial, service, and financial.
  • We deliver internal audit as a fully outsourced function or as a co-sourced complement to an existing internal team.
  • Our reports are crafted for senior management, the board, and the audit committee in clear, actionable language.

Frequently Asked Questions — Internal Audit in the UAE

What is the difference between internal audit and external audit in the UAE?

External audit is conducted by an independent auditor outside the organisation and issues an opinion on the fairness of financial statements for disclosure purposes under ISA standards issued by IAASB. Internal audit is a continuous assurance function serving senior management; it evaluates operational efficiency, internal control effectiveness, and risk management under IIA Global Internal Audit Standards (GIAS 2025). Internal audit can be performed in-house or outsourced to a specialist firm.

Is internal audit mandatory for companies in the UAE?

Internal audit is mandatory for listed public joint-stock companies under SCA governance requirements and for financial institutions under CBUAE regulations. Article 103 of Federal Decree-Law No. 32 of 2021 on Commercial Companies requires public joint-stock companies to establish an audit committee and an effective internal audit function. For all other companies it is strongly recommended as a governance tool and is routinely required by banks and international partners.

Which internal audit standards does your firm apply?

We apply the Global Internal Audit Standards (GIAS) issued by the Institute of Internal Auditors (IIA), effective January 2025, which cover requirements, performance, and quality domains. We also apply the COSO Internal Control Framework, COSO ERM for enterprise risk management, and ISO 31000 where appropriate.

How long does an internal audit engagement take and what are the deliverables?

A comprehensive internal audit typically takes between two and six weeks depending on the organisation's size and the agreed scope. Key deliverables include a full audit report with executive summary, risk ratings, findings, recommendations, and a proposed remediation plan, as well as a board and audit committee presentation if required.

What is the difference between outsourced and co-sourced internal audit?

In an outsourced model, our firm executes the entire internal audit function on behalf of the organisation in accordance with IIA standards — the optimal choice for organisations without a dedicated in-house team or those seeking cost efficiency with full independence. Co-sourcing means our firm works alongside the internal team to cover areas requiring specialist expertise such as IT audit, tax compliance, or complex financial risk.

How does internal audit contribute to fraud prevention?

Regular internal audit hardens the environment against fraud by identifying weaknesses — such as missing segregation of duties, weak approval controls, or inadequate record review — that create opportunities for manipulation or embezzlement. According to the ACFE 2024 Report, the median fraud duration before detection is 12 months; periodic internal audit significantly narrows that gap. When fraud indicators are discovered, we refer the matter to our Forensic Audit team for an independent investigation.

How does internal audit address Personal Data Protection Law (PDPL) requirements?

Federal Decree-Law No. 45 of 2021 on Personal Data Protection (PDPL) and Cabinet Decision No. 33 of 2023 require that personal data of employees and clients is processed with specific safeguards. During internal audit execution we ensure that data collection, processing, and storage comply with these safeguards; we include a review of data protection policies and testing of access controls over sensitive information within the audit scope.

Can a small or medium-sized company benefit from internal audit in the UAE?

Absolutely. While internal audit is legally mandatory only for listed companies and licensed financial institutions, SMEs benefit significantly: banks increasingly require internal audit reports for financing, corporate tax obligations demand reliable record-keeping verified by internal review, and early identification of control weaknesses prevents costly errors or fraud. Our outsourced model makes professional internal audit accessible and cost-effective for organisations of any size.

Contact Our Team

For a free consultation, reach us at:

  • 📱 WhatsApp & Phone: +971 50 794 8028
  • ☎️ Direct Line: +971 6 528 9414
  • 📍 Sharjah — Al Qasimia — Imran Tower — Office 302

Abdelhamid & Co Chartered Accountants and Auditors LLC — Ministry of Economy Licence LC0106-01 | Registered Tax Agent TAN: 30003958 | EAAA Fellow No. 124 | IASCA Fellow No. 1361

External Audit Service
About Our Firm

Abdelhamid M. Abdelhamid — Certified Public Accountant & Registered Tax Agent, Abdelhamid & Co, licensed by the UAE Ministry of Economy (LC0106-01) | Registered Tax Agent (TAN: 30003958) | EAAA Fellow No. 124 | IASCA Fellow No. 1361 | Auditors Register No. 956.

Last updated: 28 April 2026 — Reviewed against current UAE legislation and IIA standards

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Mobile\WhatsApp: 0507948028

Phone: 065610040

Email: info@abdelhamidcpa.com

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