A marine industry audit is a thorough review of a shipping company’s operations and finances. The goal is simple: to make sure everything is running safely, legally, and profitably. If you run a maritime business in the country, audits are mandatory to stay compliant with the UAE’s regulations.
About UAE’s Maritime Industry
The country’s maritime industry is a huge part of the UAE’s economy. It is positioned at the border of the Arabian Gulf and the Gulf of Oman, and intersects Europe, Asia, and Africa. The Jebel Ali and Khalifa Port are two of the busiest ports in the region. The UAE is also prioritizing sustainable shipping, it recently carried out the Middle East’s first LNG bunkering operation, showing its commitment for cleaner fuels and cutting emissions. The UAE’s marine sector is highly diverse and includes:
- Shipping & logistics: Handles the transport of vast amounts of cargo and goods across continents.
- Shipbuilding: Shipyards that build everything from commercial vessels to luxury superyachts.
- Marine services: Covers ship management, equipment supply, finance, insurance, and specialized technical support essential for global fleet operations.
Features of a Shipping Company Audit
A regular audit checks financial statements, but a marine company audit in the UAE should also handle the shipping and global trade operations while also ensuring compliance. These are some of the features of the audit process:
1. Voyage Accounting
- Most businesses make a single P&L statement covering the entire financial year.
- Shipping and marine companies usually assess their profitability on a voyage-by-voyage basis.
- It is the auditor’s responsibility to check that all the transactions are correctly assigned to the right voyage.
- This helps you see exactly which trips, routes, and/or ships are making money and which are not.
2. High Asset Intensity & Depreciation
- Shipping companies generally possess a lot of assets (docks, vessels, special equipment). These assets have to be valued correctly.
- Auditors will check if the money you spent on repairs (expense) or upgrades (capitalized asset) is treated correctly. This is done to avoid overstating assets or profits.
3. Multi-Layered Compliance Checks
- Marine industry audits in UAE also involve staying compliant with local and international safety standards.
- Shipping companies must follow IFRS, UAE Corporate Tax, and VAT rules, including for free zone and international transactions.
- Auditors will check compliance with maritime standards like ISM, ISPS, and MARPOL.
- Auditors also check internal controls to prevent fraud and ensure the company follows Anti-Money Laundering (AML) rules.
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Internal vs External Marine Audits in UAE
It is recommended that marine companies conduct both internal and external audits. Internal audits find mistakes and fraud early, saving time and money. External audits help meet regulations and build trust with international partners.
| Feature | Internal audits | External audits |
| Who conducts? | Internal staff or an outsourced advisory team | Independent, licensed audit firm |
| Goal | Find weaknesses and fix them internally before they become big problems | Certify that financial statements are true and legally compliant |
| Scope | Checks operational efficiency, management systems, fraud risk, and internal policies | Primarily verifies financial records, assets, taxes, and statutory compliance |
| Mandatory in UAE? | No, but highly recommended for risk management and operational safety | Yes, legally required by UAE law, free zones, and banks for licensing/financing |
| Audit report recipient | Company management, Board of Directors | Government regulators, free zone authorities, banks, and shareholders |
What Happens in a Marine Industry Audit in UAE?
Stage 1: Planning and Risk Assessment
- The auditor learns about your business operations and structure.
- The auditor reviews legal documents, organizational charts, trade licenses, and past financial statements.
- The auditor identifies high-risk areas and prepares an audit plan.
Stage 2: Fieldwork
- The auditor performs detailed testing and examines your business records and operations.
- The auditor evaluates your internal systems and controls by checking approval processes, department responsibilities, IT security, and environmental and safety procedures.
- The auditor checks your records for accuracy under IFRS and UAE law. They verify seaman payroll, fuel statements, and port charges.
- They also ensure vessels and equipment are properly recorded with correct depreciation and tax filings.
Stage 3: Reporting
- The auditor makes a draft report showing all findings from the audit.
- Findings are split into Non-Conformities (NCs), which are serious issues that need fixing, and Observations, which are suggestions to improve processes.
- You are allowed to give a plan explaining how and when you will fix the issues.
- The auditor then issues the final report.
Marine Audit Compliance in UAE: What Businesses Need to Do
- Marine companies must follow rules from the Free Zone or DED for trade licenses, the Federal Tax Authority (FTA) for taxes, and international maritime organizations for safety.
- Most companies are required to undergo an external financial audit.
- Free zone companies have to submit audited financial statements to renew their licenses.
- All financial statements must comply with International Financial Reporting Standards (IFRS).
- Companies with annual revenue exceeding AED 50 million should maintain and submit audited financial statements to meet CT requirements.
- All taxable companies must keep complete records for at least five years, and up to seven years. When auditing marine companies in UAE, auditors will ask for past records.
Get Expert Audit Services From A&A Associate
A&A Associate is a leading audit firm in Dubai, offering expert auditing services to clients across the UAE. Our seasoned auditors can conduct an independent, thorough review of your business and help you stay compliant. Additionally, we also offer accounting services in Dubai along with end-to-end business setup support for entrepreneurs.
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