The UAE, which has seen a phenomenal growth especially in the free zones, needs an autonomous accounting body to harness and consolidate best practices in book keeping for the benefit of the growing economy, according to an expert.

The UAE businesses have seen a 500-800 per cent growth in company incorporations across the free zone area alone in the last decade, with around 40,000 free zone companies registered in 2011, said Jitendra Gianchandani, managing partner of Jitendra Chartered Accountants (JCA), which is celebrating its 10th anniversary this year.

“The growth in company registrations in the UAE has risen phenomenally in the last 10 years and an independent accounting body will complement this growth and support the forward march of the economy,” he remarked.
 
“It will also nurture and accelerate the adoption of globally benchmarked corporate governance standards across the UAE as well accelerate capital market culture in the economy,” he added.

JCA said such an independent regulatory and standards body will add value to the maturity of the UAE economy, which crossed a projected nominal GDP of Dh1 trillion in 2010 compared to Dh250 billion in 2001.

“The economic landscape of the UAE underwent a paradigm change in the last 10 years. In 2001, there were only 5,000 companies in four free zones. The 2011 count shows that there are 40 free zones across the UAE now with some 40,000 registered companies which is an ample testimony to the economic growth of this country,” Gianchandani said.

According to JCA statistics, there are over 7,000 companies in Jebel Ali Free Zone as of 2011, over 3,000 in Dubai Airport Free Zone and more than 3,000 in the Tecom cluster comprising Dubai Media City and Dubai Internet City.
 
The number of companies in Dubai International Financial Centre  is now at nearly 800 while over 3,000 companies are registered in RAK Free Zone and Ajman Free Zone and 10,000 in Sharjah across Saif Zone and Hamriyah.

According to him, the number of national and multinational companies in the UAE has doubled in the last 10 years.

“The growth has evidently opened opportunities for accounting auditing professionals in the UAE as well reinforced the need to streamline accounting and auditing practices with transparency in focus,” he said.

“At present IFRS and GAAP are widely used by most of the local and international companies, but there is no accounting body in the UAE, he stated.

Calling for an accounting body, Gianchandani said, “Once this gets created, it will monitor and focus on the different aspects of the accounting and auditing profession and will bring uniformity while presenting the accounts."

"Foreign firms can also easily incorporate the accounts with head office if uniformity in accounts is maintained," he added.-TradeArabia News Service