GEN 8 GEN 8 Accounting and Auditing
GEN 8.1 GEN 8.1 Application
GEN 8.1.1 GEN 8.1.1
This chapter applies to every
Authorised Personother than a Representative Office.Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
[Amended] DFSA RM38/2006 (Made 28th November 2006). [VER12/11-06]
[Amended] DFSA RM68/2009 (Made 3rd January 2010). [VER24/01-10]
[Amended] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]
[Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]
GEN 8.1.1 Guidance [Deleted]
GEN 8.1.2 GEN 8.1.2
Pursuant to Article 99(5) of the
Regulatory Law, an Authorised Personwhich is a Representative Officeis hereby exempt from the requirements in Article 99 of the Regulatory Lawrelating to the appointment of an Auditor.
GEN 8.1.2 Guidance
DFSAhas exercised its power under Article 99(5) of the Regulatory Lawto exempt an Authorised Personwhich is a Representative Officefrom the requirements in that Article. As a result, in accordance with the terms of Article 99(5), the Representative Officealso does not need to comply with other requirements in chapters 4, 5 and 6 of Part 8 of that Law.
GEN 8.2 GEN 8.2 Financial statements and financial reporting standards
GEN 8.2.1 GEN 8.2.1
Authorised Personmust prepare financial statements for each financial year of the Authorised Person.
GEN 8.2.1 Guidance1. Chapter 4 of the Islamic Finance Rules (
IFR) sets out specific disclosures an Authorised Personmust include in its financial statements when carrying on Islamic Financial Business.2. The financial statements prepared by an Authorised Personwhich is a Branchmay be the financial statements prepared for the Authorised Person'shead office.
Authorised Personmust, except as provided under Rule 8.2.3, prepare and maintain all financial statements in accordance with the International Financial Reporting Standards (IFRS).
GEN 8.2.3(1) An
Authorised Firmspecified in (2) may prepare and maintain its financial statements in accordance with IFRS for Small and Medium-Sized Entities (SMEs) where that standard applies to it.(2) Authorised Firmsspecified for the purposes of (1) are:(a) an Authorised Firmin Category 3B, Category 3C or Category 4, which does not hold or control Client Assetsor Insurance Monies; and(b) an Authorised Firmin Category 4 which is not authorised under its Licenceto carry on the Financial Serviceof Operatingan Alternative Trading System.(3) The DFSAmay by written notice direct that a particular Authorised Firmor a specified class of Authorised Firmspecified in (2) must prepare and maintain financial statements in accordance with IFRS rather than IFRS for Small and Medium Sized Entities.(4) The DFSAmay by written notice vary or revoke a direction under (3).(5) The procedures in Schedule 3 to the Regulatory Law apply to a decision of the DFSAto give a direction under (3) to a particular Authorised Firm.(6) If the DFSAdecides to give a direction under (3) to a particular Authorised Firm, the Authorised Firmmay refer the matter to the FMT for review.
Authorised Personmust:(a) if it is a Body Corporate, have its financial statements approved by the Directorsand signed on their behalf by at least one of the Directors; or(b) if it is a Partnership, have its financial statements approved by the Partnersand signed on their behalf by at least one of the Partners.
GEN 8.3 GEN 8.3 Accounting records and regulatory returns
Authorised Personmust keep Accounting Recordswhich are sufficient to show and explain transactions and are such as to:(a) be capable of disclosing the financial position of the Authorised Personon an ongoing basis; and(b) record the financial position of the Authorised Personas at its financial year end.
Accounting Recordsmust be maintained by an Authorised Personsuch as to enable its Governing Bodyto ensure that any financial statements prepared by the Authorised Personcomply with the legislation applicable in the DIFC.
Authorised Person's Accounting Recordsmust be:(a) retained by the Authorised Personfor at least six years from the date to which they relate;(b) at all reasonable times, open to inspection by the DFSAor the Auditorof the Authorised Person; and(c) if requested by the DFSAcapable of reproduction, within a reasonable period not exceeding 3 business days, in hard copy and in English.
GEN 8.3.5(1) The first financial year of an
Authorised Firmwhich is a Domestic Firmstarts on the day on which it is incorporated and lasts for such period not exceeding 18 months as may be determined by its Directorsor Partners.(2) An Authorised Firmwhich is a Domestic Firmmust as soon as practicable after it has made a determination under (1) notify the DFSA of the end date determined for its first financial year.(3) The second and any subsequent financial year of an Authorised Firmwhich is a Domestic Firmshall, except as provided in Rule 8.3.6, start at the end of the previous financial year and shall last for 12 months or such other period which is within 7 days either shorter or longer than 12 months as may be determined by its Directorsor Partners.
GEN 8.3.6(1) An
Authorised Firmwhich is a Domestic Firmmay only change its financial year end from a period provided for under Rule 8.3.5(3) with the DFSA's prior consent.(2) The application for consent must be in writing and include the reasons for the change.(3) The DFSA may require the Authorised Firmto obtain written confirmation from its Auditorthat the change of financial year end would not result in any significant distortion of the financial position of the Authorised Firm.
Authorised Firmis not a Domestic Firmand intends to change its financial year, it must provide the DFSA with reasonable advance notice prior to the change taking effect.
GEN 8.4 GEN 8.4 Appointment and termination of Auditors
Authorised Personmust:(a) notify the DFSAof the appointment of an Auditorby completing and submitting the appropriate form in AFN;(b) prior to the appointment of the Auditor, take reasonable steps to ensure that the Auditorhas the required skills, resources and experience to audit the business of the Authorised Personfor which the auditor has been appointed; and(c) if it is a Domestic Firm, ensure that the Auditor, at the time of appointment and for the duration of the engagement, is registered with the DFSAas a Registered Auditor.
Authorised Personmust notify the DFSAimmediately if the appointment of the Auditoris or is about to be terminated, or on the resignation of its Auditor, by completing and submitting the appropriate form in AFN.
Authorised Personmust appoint an Auditorto fill any vacancy in the office of Auditorand ensure that the replacement Auditorcan take up office at the time the vacancy arises or as soon as reasonably practicable.
GEN 8.4.4 GEN 8.4.4(1) An
Authorised Personmust take reasonable steps to ensure that the Auditorand the relevant audit staff of the Auditorare independent of and not subject to any conflict of interest with respect to the Authorised Person.(2) An Authorised Personmust notify the DFSAif it becomes aware, or has reason to believe, that the Auditoror the relevant audit staff of the auditor are no longer independent of the Authorised Person, or have a conflict of interest which may affect their judgement in respect of the Authorised Person.
GEN 8.4.4 Guidance1. An
Authorised Personshould consider whether there is any financial or personal relationship between it or any of its relevant Employeesand the Auditoror any of the relevant Employeesof the Auditorthat may affect the judgement of the Auditorwhen conducting an audit of the Authorised Personor complying with all its legal obligations, including the Regulatory Law, AUD, AMLand other relevant modules of the DFSARulebook.2. An Authorised Personshould consider rotating the appointed relevant staff of the Auditoron a regular basis to ensure that the relevant staff of the Auditorremain independent.
If requested by the
DFSA, an Authorised Personwhich carries on Financial Servicesthrough a Branchmust provide the DFSAwith information on its appointed or proposed Auditorwith regard to the Auditor's, skills, experience and independence.
GEN 8.4.6 [Deleted]
GEN 8.4.7 [Deleted]
GEN 8.4.8 [Deleted]
GEN 8.5 GEN 8.5 Co-operation with Auditors
Authorised Personmust take reasonable steps to ensure that it and its Employees:(a) provide any information to its Auditor that its Auditorreasonably requires, or is entitled to receive as Auditor;(b) give the Auditorright of access at all reasonable times to relevant records and information within its possession;(c) allow the Auditorto make copies of any records or information referred to in (b);(d) do not interfere with the Auditor'sability to discharge its duties;(e) report to the Auditorany matter which may significantly affect the financial position of the Authorised Person; and(f) provide such other assistance as the Auditormay reasonably request it to provide.
GEN 8.6 GEN 8.6 Audit reports
GEN 8.6.1 GEN 8.6.1
Authorised Personmust, in writing, require its Auditorto:(a) conduct an audit of and produce a Financial Statement Auditor's Reporton the Authorised Person'sfinancial statements in accordance with the International Standards on Auditing;(b) produce a Regulatory Returns Auditor's Reportin accordance with the Rules in AUD App1 as relevant;(c) produce, if the Authorised Firmis permitted to control or hold Client Money, a Client Money Auditor's Reportin accordance with the Rules in AUD App2;(d) produce, if the Authorised Firmis permitted to control or hold Insurance Monies, an Insurance Monies Auditor's Reportin accordance with the Rules in AUD App3;(e) produce, if the Authorised Firmis permitted to hold or control Client Investmentsor Provide Custodyin or from the DIFC, a Safe Custody Auditor's Reportin respect of such business as applicable, in accordance with the Rules in AUD App4; and(f) provide a Money Services Auditor's Report in accordance with the Rules in AUD App7, if the Authorised Firm is Providing Money Services, Account Information Services or Payment Initiation Services.Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
[Amended] DFSA RM66/2009 (Made 1st August 2009). [VER23/08-09]
[Amended] DFSA RM69/2010 (Made 1st March 2010). [VER25/03-10]
[Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]
[Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]
[Amended] DFSA RMI266/2020 (Made 26th February 2020). [VER48/04-20]
GEN 8.6.1 Guidance
For the purposes of Rule 8.6.1(a) the financial statements of an
Authorised Personwhich is a Branchmay be the financial statements prepared for the Authorised Person's head office.
Authorised Personmust submit any reports produced by its Auditorthat are required by this chapter to the DFSAwithin four months of the Authorised Person'sfinancial year end.
GEN 8.6.3 GEN 8.6.3(1) An
Authorised Personmust, subject to (2), upon request by any Person, provide a copy of its most recent audited financial statements, together with the Financial Statement Auditor's Reportto the Person. If the copy is made available in printed form, the Authorised Personmay make a charge to cover reasonable costs incurred in providing the copy.(2) The requirement in (1) does not apply to an Authorised Firmwhich:(a) is in Category 3B, Category 3C or Category 4; and(b) does not hold or control Client Assetsor Insurance Monies.
GEN 8.6.3 Guidance
Authorised Personshould be aware that there may be other legislation applicable to it that may require the Authorised Personto provide access to all or part of its financial statements.
GEN 8.7 GEN 8.7 [Deleted]
GEN 8.7.1 GEN 8.7.1 [Deleted]
GEN 8.7.1 Guidance [Deleted]
GEN 8.7.2 GEN 8.7.2 [Deleted]
GEN 8.7.2 Guidance [Deleted]
GEN 8.7.3 [Deleted]
GEN 8.7.4 [Deleted]
GEN 8.8 GEN 8.8 [Deleted]
GEN 8.8.1 GEN 8.8.1 [Deleted]
GEN 8.8.1 Guidance [Deleted]
GEN 8.9 GEN 8.9 [Deleted]
GEN 8.9.1 [Deleted]
GEN 8.9.2 [Deleted]
GEN 8.9.3 GEN 8.9.3 [Deleted]
GEN 8.9.3 Guidance [Deleted]
GEN 8.10 GEN 8.10 [Deleted]
GEN 8.10.1 [Deleted]
GEN 8.11 GEN 8.11 [Deleted]
GEN 8.11.1 [Deleted]
GEN 8.11.2 [Deleted]
GEN 8.11.3 [Deleted]
GEN 8.11.4 [Deleted]
GEN 8.11.5 [Deleted]
GEN 8.11.6 [Deleted]
GEN 8.12 GEN 8.12 [Deleted]
GEN 8.12 Guidance [Deleted]
GEN 8.12.1 [Deleted]
GEN 8.12.2 [Deleted]
GEN 8.12.3 [Deleted]
GEN 8.12.4 [Deleted]
GEN 8.12.5 [Deleted]
GEN 8.13 GEN 8.13 [Deleted]
GEN 8.13.1 [Deleted]
GEN 8.13.2 [Deleted]
GEN 8.13.3 GEN 8.13.3 [Deleted]
GEN 8.13.3 Guidance [Deleted]
GEN 8.13.4 [Deleted]
GEN 8.14 GEN 8.14 [Deleted]
GEN 8.14 Guidance [Deleted]
GEN 8.14.1 [Deleted]
GEN 8.14.2 [Deleted]
GEN 8.14.3 [Deleted]
GEN 8.14.4 [Deleted]
GEN 8.14.5 GEN 8.14.5 [Deleted]
GEN 8.14.5 Guidance [Deleted]
GEN 8.15 GEN 8.15 [Deleted]
GEN 8.15.1 [Deleted]
GEN 8.16 GEN 8.16 [Deleted]
GEN 8.16.1 [Deleted]
GEN 8.16.2 [Deleted]
GEN 8.16.3 [Deleted]
GEN 8.17 GEN 8.17 [Deleted]
GEN 8.17.1 [Deleted]
GEN 8.17.2 [Deleted]
GEN 8.17.3 [Deleted]
GEN 8.17.4 [Deleted]
GEN 8.18 GEN 8.18 [Deleted]
GEN 8.18.1 [Deleted]