Banks prefer foreign audit offices over the "national"

«Al-Eqtisad» intends to classify the auditors registered with it.

archival

The owners of accounting and auditing firms and those dealing with banks have complained about the latter’s insistence on adopting their own lists that include the names of the offices from which audited budgets issued by them alone are accepted, and on the basis of which lending to owners of companies and institutions is approved.

Pointing out that banks prefer foreign offices over national ones, even if they are at the same level of competence and professionalism.

On the other hand, bankers saw that the absence of regulatory, supervisory and classification standards pushes banks to rely on foreign offices, in order to reduce lending risks that are granted based on budgets.

While the Ministry of Economy confirmed that there is a tendency to tighten compliance with international standards, in addition to studying the classification of auditors registered with it, confirming the illegality of bank lists.

black list

In detail, the chartered accountant and member of the General Federation of Arab Accountants, Mohamed Abdel Moneim Maher, said, “Some local banks prepare lists of their accredited auditors, and force their clients to audit and approve their budgets with the offices included in that list, so the remaining offices become part of the bank’s “black list.” Although the register of accountants and auditors located in the Department of Auditors at the Ministry of Economy is the only entity entrusted with registering auditors in the professional practice schedule.

He added, “As long as the auditors’ list is registered, it is not permissible for any party to pressure the client to choose one office over another, given that all auditing offices are licensed by the Ministry of Economy, then the Planning Department, and finally the chambers of commerce and industry in the country, and these offices have headquarters that carry out their activities from And it has trained and qualified workers.

Maher called for "establishing Emirati auditing standards to develop and activate the performance of practitioners, in addition to foundations for quality control over the performance of offices, especially as we are in an open market and it is expected that more big names will enter with the implementation of the GATT agreement in the field of financial services."

Absence of standards

For his part, Ahmed Majid Lootah, Head of the Personal Banking Services Sector at the Arab Bank for Trade and Investment (ARBIFT), said, “Auditing offices are classified worldwide, and some of them have a big name and have a high-level professional team, and they have supervisory authorities that ensure the credibility of their work. Unfortunately, these systems are not applied in emerging economies in a manner that guarantees transparency, and we in the UAE do not yet have an entity that regulates the work of audit offices and follows up on the application of accounting principles, which leads to significant differences in the levels and capabilities of our operating offices.

Regarding banks’ preference for foreign offices, he explained that “the matter depends on the vision of each bank and how to manage risks in it, and it is not related to foreign or national, as many banks do not rely entirely on budgets, but rather resort to matching the customer’s financial movement with the audited numbers, which is a role it plays Risk Management".

Lootah added, “We are in a free economy, and banks aim to manage the relationship with the customer, taking into account the risks that lending carries. She has expertise and experience with audit offices, through which she can determine which ones to deal with.

"It is not possible to oblige banks to accredit all offices operating in the profession in the absence of regulatory and supervisory standards, and it is necessary to develop a classification that defines the categories that audit banks, public, private and small companies," he added.

office reputation

As for the Executive Director of the “Talal Abu-Ghazaleh Group” in Abu Dhabi, Samer Dahdal, he stressed that “the audit office’s reputation, its history, and the experience of its cadres are all factors behind its presence on the list of this or that bank,” noting that “the existence of wrong practices by some small offices related to the quality of The work itself and the accuracy of the studies and information issued by them, especially since the financial statements are readable and many economic and financial decisions are based on it, so the utmost professionalism should be observed.

Dahdal called for imposing greater restrictions on the work of auditors and increasing oversight by the official authorities, stressing that “there is no difference between Arab and foreign offices as long as the principles of the profession are taken into account,” noting that “the group he works for is 100% Arab and he never notices any discrimination in treatment.”

illegal

In turn, the Acting Director of the Auditors Department at the Ministry of Economy, Laila Al-Kaabi, confirmed the illegality of the lists approved by banks for auditing and accounting offices.

She explained, “Banks do not have the right not to recognize an auditor licensed by the state, and they are supposed to accept the budgets submitted through him. As for auditing banks, the law requires that the auditor be registered for five years, but what happens is that banks rely on a number of large and foreign offices within It has internal politics, and the ministry has no authority over it in this regard.

She added, “Review and auditing is a modern sector in the country, and unfortunately it is dominated by Indian nationality, and there is a reluctance to attract the citizen element, but we, as an official body, require mastery of the Arabic language before granting the license, in order to ensure easy communication between offices and owners of companies.”

Al-Kaabi indicated that "the ministry intends to stress the importance of adhering to international standards," stressing that "there is a study being prepared in cooperation with the Abu Dhabi Securities Exchange to classify auditors, which will be submitted upon acceptance to the official authorities to take a decision on it."

Arthur Anderson

A national bank relies on a list of foreign auditing offices, headed by the "Arthur & Dresson" office, whose branches were closed worldwide by a decision of the International Court, following a financial scandal during the elections of US President George Bush, where he prepared a financial report confirming that the status of One of the international companies is good, and this was followed by the declaration of bankruptcy of this company, and this office was removed from the register of auditors at the Ministry of Economy and all its employees were transferred to another auditing company.

nationalities

A number of members of the Indian community resort to obtaining other nationalities, such as British and Canadian, to register with them in the register of account auditors at the Ministry, in order to benefit from the advantages enjoyed by these nationalities.

statistics

The number of foreign offices working in auditing within the country is 13 offices, while the number of national offices reaches 57 offices. Registration after three years, according to the statistics of the Ministry of Economy.

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