Hamriyah Free Zone Authority (HFZA), located in the Emirate of Sharjah, is one of the most prominent free zones in the United Arab Emirates. To uphold financial transparency and regulatory compliance, HFZA mandates that all companies operating within the zone submit annual audited financial statements conducted by HFZA-approved audit firms.

This article outlines the legal framework governing these auditing requirements, highlights the importance of approved auditors, and clarifies the obligations imposed on companies and auditing firms under current UAE regulations.

As a leading audit and accounting firm in the UAE, Farahat & Co. provides comprehensive auditing, bookkeeping, and accounting services tailored to all business sectors within the free zones.

Licensed and accredited to perform statutory audits, Farahat & Co. has extensive experience in financial reporting and audit compliance in the UAE’s mainland and free zone jurisdictions, including Hamriyah Free Zone and Sharjah Airport International Free Zone.

Audit Services for Sharjah Free Zones

Farahat & Co. offers professional audit and accounting services for companies registered in Sharjah’s free zones, including:

Sharjah Airport International Free Zone (SAIF Zone)
Hamriyah Free Zone Authority (HFZA)

Legal Framework for Appointing Approved Auditors

Auditing and accounting practices in the UAE are regulated to ensure credibility and compliance. According to Federal Law No. 12 of 2014 on the Regulation of the Auditing Profession, all audit firms must be registered with the UAE Ministry of Economy and comply with international auditing and financial reporting standards (ISA/IFRS).

HFZA supplements these federal regulations with additional requirements to support corporate governance and anti-money laundering (AML) policies:

Companies must appoint an auditor from the HFZA-approved list.
Audited financial statements must be submitted within 90 days of the end of the financial year. This submission is a prerequisite for renewing the company’s trade license.

Why Approved Auditors Matter

Appointing an HFZA-approved auditor is critical for several reasons:

Ensures the reliability and accuracy of financial statements.
Enables the free zone authority to monitor business activities and prevent illicit practices.
Helps businesses comply with VAT, Corporate Tax, and ESR requirements.
Builds trust with banks, investors, and government entities.

Partnering with an approved auditor like Farahat & Co. offers the following benefits:

Full compliance with HFZA regulations and UAE laws.
Avoidance of trade license renewal delays or financial penalties.
Increased confidence among shareholders, lenders, and stakeholders.

Criteria for Auditor Approval in HFZA

To be approved by HFZA, audit firms must meet the following criteria:

Registration with the UAE Ministry of Economy as a licensed audit firm.
Adherence to international auditing standards and ethical conduct.
Submission of proof of auditing experience and qualified personnel.
Successful completion of HFZA’s evaluation or qualification procedures.

Summary of Audit Requirements:

The auditor must be listed among HFZA’s approved audit firms.
Audited financials must include the balance sheet, income statement, general ledger, and VAT/ESR records, prepared by IFRS and submitted within 90 days of year-end.

Farahat & Co. is uniquely positioned to support HFZA companies in meeting these obligations. We offer full-scope audit and assurance services, ensuring financial accuracy and compliance with applicable laws.

Internal and External Audit Services by Farahat & Co.

Farahat & Co. provides both internal and external audit services for free zone companies:

Internal Audit Services

Internal audits focus on evaluating business operations and internal controls. Unlike forensic investigations, internal audits help companies enhance efficiency, compliance, and productivity while identifying and mitigating risks.

External Audit Services

External audits are conducted by independent auditors who assess whether the financial statements reflect a true and fair view by IFRS or GAAP standards. This assures external stakeholders about the company’s financial position.

Farahat & Co. has helped many businesses:

Avoid audit-related legal issues.
Comply with regulatory authorities.
Present accurate financial reports for legal and banking purposes.
Act as court-appointed accounting experts when needed.

We also conduct VAT audit services to verify tax documentation, ensuring proper tax reporting and avoiding overpayments or non-compliance.

Responsibilities of Companies and Approved Auditors

Company Obligations

Companies registered in HFZA are required to:

Appoint a registered HFZA-approved auditor.
Maintain organized financial records and books of accounts throughout the license period.
Submit audited financial statements on time to avoid penalties or license suspension.

Auditor Obligations

Approved auditors must:

Deliver independent, unbiased audit reports, free of any conflict of interest.
Maintain strict confidentiality of client financial data.
Ensure compliance with HFZA requirements and international audit standards.

Risks of Non-Compliance

Failure to appoint an approved auditor or submit audited financials can lead to:

Monetary fines issued by HFZA.
Suspension or cancellation of the trade license.
Denial of license renewal until compliance is achieved.

Seek the Expert Services of Premier Audit Firms in UAE

Appointing an approved auditor and submitting timely audited financial statements is a legal and strategic necessity for all businesses operating in Hamriyah Free Zone. It ensures compliance with UAE laws and helps build a reputation for financial transparency and governance.

At Farahat & Co., we take pride in being one of the UAE’s most trusted auditing firms, with a dedicated team of professionals ensuring end-to-end audit support from planning to final report delivery.

With decades of experience, we provide companies with accurate, reliable, and fully compliant audit reports that meet international standards.