Audit quality is a cornerstone of trust, underpinning investor confidence and economic stability. The United Arab Emirate’s dynamic financial sector relies on robust audits to ensure transparency and accountability. However, maintaining high audit quality is increasingly challenging for many firms.
Audit professionals, regulators and practice leaders in the UAE face a complex landscape marked by regulatory fragmentation, high compliance costs, and challenges in attracting and retaining talent. Addressing these issues holistically is essential if we are to reinforce trust and support the UAE’s continued growth and integration into the global economy.
The presence of multiple regulators in the UAE, each with distinct requirements and standards, leads to duplicated efforts in compliance and reporting, and conflicting interpretations of laws and regulations.
This has a direct impact on firms. Leaders spend significant amounts of their time making sure that the firm stays abreast of changes and remains compliant, and firms often struggle to allocate resources efficiently.
Smaller audit firms often find it difficult to keep pace with frequent updates and divergent expectations
This has a particularly strong impact on smaller audit firms, who often find it difficult to keep pace with frequent updates and divergent expectations. These firms face a disproportionate burden that affects overall audit quality. They have fewer staff and less resources to manage compliance and documentation, and can have difficulty in accessing training and guidance on new regulations. This leaves them vulnerable to regulatory penalties for unintentional non-compliance.
Cost of compliance
Rigid documentation requirements, while critical for transparency, can be overwhelming, especially when not harmonised across multiple regulators. Technology that automates routine documentation and compliance tasks, and facilitates regulatory reporting, offers a solution, but this requires investment and training, which can be a barrier for smaller firms.
The high cost of compliance, coupled with intense competition based on price rather than quality, can incentivise cost-cutting measures that compromise audit standards. There is a pressing need to shift the market focus from price to quality, raise client awareness about the value of high-quality audits, and support firms as they balance cost pressures with quality imperatives.
Encouraging industry-wide recognition of audit quality as a differentiator is crucial for long-term market integrity. Regulators and professional bodies can play a role in conveying the message.
We need strategies to improve the public perception of audit as a career
Attracting and retaining talent in the UAE’s audit profession is a significant challenge. There is intense competition from other financial and technology sectors, exacerbated by a lack of awareness of the profession’s opportunities. The (unfair) perception is that the audit profession has limited career progression and a poor work-life balance.
Ultimately, this could lead in the near future to a shortage of audit partners who are willing to take responsibility in an environment where there is a high risk of regulatory penalties and sanctions. We need strategies to improve the public perception of audit as a career, provide clear career paths, and foster professional development to ensure a steady pipeline of skilled auditors.
Recommendations
What else can be done? I have recommendations in three key areas:
Focus on best practice. Adopting global best practices, including international auditing standards and robust internal controls, is vital for consistency and reliability. This could be achieved through:
- regular training on international standards for all audit professionals
- integration of technology to support compliance and quality assurance
- promoting a culture of continuous improvement and ethical conduct.
Sharing best practices across firms and regulators will drive collective progress and elevate audit quality standards.
A mentoring programme led by the top 10 firms in the UAE could bring real benefits
Mentoring and collaboration. Mentoring of smaller firms and greater collaboration can help bridge capability gaps and ensure widespread adoption of quality standards – a mentoring programme led by the top 10 firms in the UAE could bring real benefits.
So, too, would creating spaces for the sharing of knowledge. In October, for example, Baker Tilly UAE hosted a roundtable event that brought together large and second-tier firms, regulators and accountancy bodies, to discuss the audit quality challenge and potential solutions. Regular events and peer forums will help encourage the sharing of best practice, while cross-firm partnerships will help us address common challenges and manage risk. Together, initiatives like these promote inclusivity, shared learning and resilience across the practicing firms.
Promote the network model. Greater understanding of and familiarity with network models, where firms collaborate under shared standards and resources, can unlock opportunities for career development and operational efficiency.
Personally, I would like to see professional bodies like ACCA introduce a training module on network operations to help raise awareness of the benefits. Workshops that highlight career pathways within networked firms, and case studies demonstrating successful network models in other jurisdictions, would also help.
Collaboration and knowledge sharing will be key to reinforcing the UAE’s position as a trusted financial centre
Raising audit quality and building trust in the UAE’s financial markets requires a coordinated, multifaceted approach. By harmonising regulations, leveraging technology, supporting smaller firms, and investing in talent, the audit profession can meet evolving challenges and uphold the highest standards.
Collaboration and knowledge sharing will be key to achieving sustainable progress and reinforcing the UAE’s position as a trusted financial centre.
