MAZ Chartered Accountant is delighted to announce that our company is listed as one of the Real Estate Regulatory Agency (RERA) Approved/Certified Auditors. RERA was founded on 31 July 2007, to set policies and plans in the real estate sector in Dubai in order to protect the interests of home buyers and also boost investments in the real estate sector and to increase foreign investments. It orders that all its developers should have an independent “escrow account” and should undertake an audit to check on the current status of the project and update the records with regards to the progress of the construction.
Recently, standards and controls for auditing annual budgets for service charges and financial reports for jointly owned properties (JOPs) in Dubai have become more established and tightened after the Real Estate Regulatory Agency (RERA) at Dubai Land Department (DLD) signed agreements with 28 audit offices.
The intention was to lower the control developers or their representatives had in the management of properties post-handover.
The primary role of RERA Certified Auditor:
I. They are required to audit financial statements of Jointly Owned Properties (JOPs) to affirm whether these are free from material misstatement.
II. Auditors can comment on whether the data was prepared in accordance with the International Financial Reporting Standards (IFRS) as well as provide a report on the financial statements and the necessary communication under international auditing standards (ISAs).
III. The firms will also evaluate the control standards and the risk management process for JOPs, as well as assess the effectiveness of operations, and the adequacy and reliability of the financial information for properties.
IV. They firms can ensure that a property management company complies with the applicable laws and regulations regarding JOPs.
The scope of RERA audit covers the following:
I. FINANCIAL AUDIT
a. List of units sold, units canceled and cash received from buyers;
b. Mortgage/finance amount received for the project from financial institutions;
c. Retention a/c balance and verify it represents 5% of total funds received;
d. Paid land costs and other related payments (registration fees, etc.);
e. Project construction, management & marketing related payments;
f. Advance payments released to the contractor(s) or other parties;
g. Advance payment guarantees and performance bond issued;
II. OPERATIONAL AUDIT – To assess the effectiveness of the control environment and activities of the company.
III. COMPLIANCE AUDIT – To verify whether or not the developer is following the applicable real estate laws & regulations as required by RERA.