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Industry-Specialized Auditors

Financial Services Audit in Dubai & UAE

DFSA | ADGM | Central Bank Compliance | Regulatory Reporting

Specialized audit services for banks, insurance companies, investment firms, payment service providers, and fintech companies. Our regulatory compliance experts understand DFSA, ADGM, Central Bank, and UAE regulatory requirements.

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Financial Services Sector in the UAE

The UAE financial services sector is among the most sophisticated in the Middle East, with Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) serving as leading international financial centers. The sector includes commercial banks, Islamic financial institutions, insurance companies, investment firms, asset managers, payment service providers, and emerging fintech companies. Each segment faces distinct regulatory requirements from multiple authorities: Central Bank of UAE, Dubai Financial Services Authority (DFSA), Financial Services Regulatory Authority of ADGM, and Securities and Commodities Authority.

Financial services audits require deep regulatory knowledge, understanding of complex financial instruments, robust risk-based methodologies, and expertise in specialized accounting areas including loan loss provisioning (IFRS 9), insurance contract liabilities (IFRS 17), fair value measurement (IFRS 13), and regulatory capital calculations. As one of the [top financial services audit firms in Dubai](/en/top-10-audit-firms-dubai), our team includes former bank regulators, actuaries, and specialists in financial instruments who have examined over 100 regulated entities across all segments.

With increasing focus on anti-money laundering (AML), counter-terrorist financing (CTF), cybersecurity, and ESG reporting, financial institution audits extend beyond traditional financial statement verification. Our integrated approach covers financial reporting, regulatory compliance, internal controls, IT systems, and risk management frameworks in a single comprehensive audit engagement.

Unique Challenges in Financial Services Audits

Industry-specific audit complexities that require specialized expertise and proven methodologies

Regulatory Compliance
Financial institutions must comply with multiple regulators (DFSA, ADGM FSRA, Central Bank, SCA) each with specific reporting formats, capital adequacy rules, liquidity requirements, and governance standards. Auditors must verify compliance across all applicable regulations.
IFRS 9 Expected Credit Losses
Banks and finance companies must estimate expected credit losses on loans using forward-looking information and multiple economic scenarios. Auditors must assess model assumptions, staging criteria, probability of default (PD), loss given default (LGD), and management overlays.
Fair Value Measurement
Financial instruments at fair value require valuation using market prices (Level 1), observable inputs (Level 2), or models (Level 3). Auditors must test pricing sources, model assumptions, and day-1 profit recognition compliance with IFRS 13.
Insurance Contract Liabilities
Under IFRS 17 (effective 2023), insurance companies must measure contract liabilities using building block approach with risk adjustment and contractual service margin. Actuarial assumptions, discount rates, and transition impacts require specialized audit procedures.
Capital Adequacy Verification
Regulatory capital calculations (Tier 1, Tier 2, risk-weighted assets) must be verified per Basel III standards or local regulator requirements. Auditors test risk weightings, capital instruments eligibility, and ratio compliance.
AML/CFT Compliance
Anti-money laundering and counter-terrorist financing controls must be tested including customer due diligence, transaction monitoring, sanctions screening, and suspicious activity reporting. Auditors assess control effectiveness and regulatory compliance.

Financial Services Regulatory Framework

Comprehensive compliance coverage across all applicable regulations and standards

DFSA (Dubai Financial Services Authority)
Regulator for all financial services in DIFC
  • Annual audited financial statements to IFRS
  • Regulatory returns (Capital, Liquidity, Large Exposures)
  • Auditor's report on regulatory returns
  • AML/compliance audit (if required)
  • Corporate governance compliance report
  • Auditor appointment approved by DFSA
ADGM FSRA (Financial Services Regulatory Authority)
Regulator for financial services in Abu Dhabi Global Market
  • Audited financial statements per IFRS
  • Prudential returns and regulatory reporting
  • Minimum capital maintenance verification
  • Client asset audit (for investment firms)
  • Internal controls attestation
Central Bank of UAE
Primary regulator for banks and finance companies in mainland UAE
  • Quarterly and annual regulatory reporting
  • Capital adequacy ratio maintenance (Basel III)
  • Liquidity coverage ratio compliance
  • Asset quality classification and provisioning
  • Related party exposure limits
  • AML/CFT compliance and reporting
SCA (Securities and Commodities Authority)
Regulator for securities, commodities, and mainland investment activities
  • Brokerage firm financial reporting
  • Client fund segregation verification
  • Net liquid capital maintenance
  • Transaction reporting compliance
  • Insider trading controls assessment

Our Financial Services Audit Methodology

We apply risk-based audit methodologies specifically designed for financial institutions, addressing both financial reporting and regulatory compliance requirements.

1

Planning & Risk Assessment

We conduct comprehensive risk assessment covering credit risk, market risk, operational risk, compliance risk, and IT risk to design targeted audit procedures.

Key Deliverables:

  • Regulatory landscape analysis
  • Business model and risk assessment
  • Internal control evaluation (ICOFR)
  • IFRS 9/IFRS 17 methodology review
  • IT systems and controls assessment
  • Regulatory compliance testing plan
2

Fieldwork & Substantive Testing

Our specialists perform detailed testing of financial instruments, credit models, regulatory calculations, and compliance processes using data analytics and sampling.

Key Deliverables:

  • Loan portfolio testing and ECL model validation
  • Financial instruments valuation testing
  • Regulatory capital calculation verification
  • Client asset reconciliation (if applicable)
  • AML transaction monitoring testing
  • IT general controls and application controls testing
3

Regulatory Reporting & Advisory

We provide audit opinions on both financial statements and regulatory returns, plus strategic recommendations on compliance optimization.

Key Deliverables:

  • Audited financial statements per IFRS
  • Auditor's report on regulatory returns
  • Management letter with recommendations
  • Regulatory compliance improvement roadmap
  • IFRS/regulatory change impact analysis
  • Capital optimization opportunities

Why Choose Our Financial Services Audit

Regulatory Expertise

Our team includes former DFSA examiners, Central Bank supervisors, and regulatory specialists who understand regulator expectations and can navigate complex compliance requirements efficiently.

IFRS 9 & IFRS 17 Specialists

We have dedicated specialists in expected credit loss modeling (IFRS 9) and insurance contracts (IFRS 17), including actuaries, credit modelers, and financial instrument valuation experts.

Big 4 Experience

Our leadership team includes alumni from Big 4 financial services practices with experience auditing major international banks, insurance companies, and asset managers in UAE and globally.

Technology-Driven Audit

We use advanced data analytics, continuous audit monitoring, and automated testing of large transaction populations, improving audit quality while reducing disruption to your operations.

Integrated Compliance Approach

Beyond financial audit, we provide integrated assurance on regulatory returns, AML controls, IT systems, and risk management, giving regulators and stakeholders comprehensive confidence.

Rapid Regulatory Response

When regulators issue new requirements or request additional information, our established relationships and technical expertise enable quick, quality responses that satisfy regulator expectations.

Common Audit Findings in Financial Services

Learn from common issues we identify and how to resolve them proactively

Issue

ECL Model Assumptions Not Supportable

Impact

IFRS 9 expected credit loss models using PD, LGD, or EAD assumptions not supported by historical data or forward-looking adjustments not reasonable

Solution

Develop assumptions based on entity-specific loss history, consider multiple economic scenarios, document management overlays with supporting rationale

Issue

Loan Staging Errors

Impact

Loans not correctly staged (Stage 1, 2, or 3) per IFRS 9 due to inadequate assessment of significant increase in credit risk

Solution

Implement quantitative and qualitative staging criteria, monitor past due status and credit ratings, document staging decisions

Issue

Regulatory Capital Miscalculation

Impact

Risk-weighted assets incorrectly calculated, or capital instruments improperly classified as Tier 1/Tier 2 capital

Solution

Review risk weighting methodology against Basel III standards, verify capital instrument terms meet regulatory criteria

Issue

Client Asset Reconciliation Gaps

Impact

Investment firms unable to reconcile client assets to custodian statements or segregation requirements not met

Solution

Perform daily reconciliation of client assets, investigate breaks promptly, maintain adequate segregation per regulatory requirements

Issue

AML Transaction Monitoring Failures

Impact

Suspicious transactions not identified by monitoring systems or inadequate customer due diligence documentation

Solution

Calibrate transaction monitoring scenarios based on risk assessment, enhance CDD procedures, train staff on red flags

Issue

Fair Value Level 3 Valuation Weaknesses

Impact

Unobservable inputs for Level 3 valuations not supportable, or sensitivity analysis inadequate

Solution

Document valuation models with independent validation, perform sensitivity analysis, consider third-party pricing where available

Contact us for Financial Services

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Success Story

Case Study: DFSA-Regulated Investment Manager

The Challenge

A DIFC-based investment management firm faced DFSA concerns about their client asset controls and regulatory return accuracy. Previous auditor had issued qualified opinion on regulatory returns due to reconciliation discrepancies. The firm risked regulatory action and client confidence erosion.

Our Solution

We conducted comprehensive review of their client asset control framework, identified root causes of reconciliation breaks (timing differences and FX treatment), redesigned their daily reconciliation process, implemented automated controls in their portfolio management system, and worked with DFSA to explain remediation.

Measurable Results

Achieved clean opinion on both financial statements and regulatory returns
Resolved all client asset reconciliation discrepancies
DFSA removed firm from enhanced monitoring
Implemented real-time client asset monitoring dashboard
Firm able to launch new funds and attract institutional investors

Frequently Asked Questions

Get answers to common questions about our industry-specialized audit services

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