Federal Decree-Law No. (32) of 2021 on Commercial Companies sets a maximum term for an audit firm's engagement with a public joint stock company at six consecutive fiscal years, with the partner responsible for the audit required to rotate after three fiscal years, and the same audit firm eligible for reappointment only after a gap of at least two fiscal years from the expiry of its term.

Appointing the Company's Auditor and the Rotation Period

The law provides that "the General Assembly shall appoint an auditing firm for a renewable one-year term, and it shall not be permitted for the board of directors of the company to be delegated in this respect. This shall be on condition that the auditing firm does not carry out the auditing in the company for more than six [6] consecutive fiscal years of the date it took over the auditing in the company. In this case, the partner responsible for the auditing in the company is required to be changed at the end of three [3] fiscal years. It shall be permissible for this auditing firm to be reappointed after the passage of at least two [2] fiscal years from the expiry date of its term of appointment." The founders of the company may also, at incorporation, appoint an auditing firm approved by the Authority to perform these duties until the General Assembly's duties for the first fiscal year are completed.

Conditions Required of the Auditor

The law requires the public joint stock company's auditor to be "licensed to practice auditing in the State and shall have at least five years of experience in auditing Joint Stock Companies," to be a certified auditor approved by the Authority, and not to combine the profession of auditor with being a partner in the company or serving as a director or in any technical, administrative or executive capacity within it, nor to be a partner, agent, or second-degree relative of any of the company's founders or directors.

The Auditor's Duties and the Audit Report

The auditor is responsible for "auditing the company's accounts, examining the balance sheet and the profit and loss account, reviewing the company's related-party transactions, and monitoring compliance with the provisions of this Decree-Law and the company's articles," and must submit a report on the results of this examination to the General Assembly, sending a copy to the Authority and the competent authority, stating whether the accounts were prepared in accordance with the law and whether they give a fair picture of the company's financial position.

Multiple Auditors and Confidentiality of Company Data

If a company has more than one auditor, they must divide the tasks among themselves, with each submitting a separate report on the part of the engagement assigned to them, followed by a joint report for which they are jointly and severally responsible. In all cases, the auditor must maintain the confidentiality of the company's data obtained in the course of their duties, and may not disclose it to third parties or even to shareholders except at the General Assembly meeting, failing which the auditor must be dismissed, without prejudice to civil or criminal liability.

Reporting Violations and the Ban on Trading the Company's Shares

The law requires the auditor to notify the Authority of any violations of the law's provisions, or any violations constituting a criminal offense, that they discover while performing their duties, within ten days of discovering the violation; otherwise the Authority may suspend them from auditing public joint stock companies for a period not exceeding one year, or strike off their accreditation. The auditor and their staff are also barred from directly or indirectly buying or selling the securities of the company they audit, failing which the auditor must be dismissed, without prejudice to civil or criminal liability.

Legal References

For questions about your specific situation, you can ask the UAE Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.