Dubai: A regional committee encompassing all GCC states should be formed to secure harmonisation of accounting standards, said managing partner of an auditing and accounting firm.
"The Gulf has a strong probability for harmonisation of accounting standards, since these countries share the same accounting values. This make these countries good candidates for harmonisation of accounting practices, said Jitendra Gianchandani, Managing Partner of Jitendra Chartered Accountants (JCA),
While acknowledging the growing cooperation among GCC members on intra-GCC investments, standards setting and intellectual property protection, Gianchandani said these similarities among the GCC states should be extended to accounting and auditing too.
Commenting on the accounting and auditing industry in the UAE, he said that in the absence of an independent accounting and auditing regulatory body, international firms have an edge over the local and regional audit firms as most of the companies in the UAE have adopted Full International Financial Reporting Standards (IFRS) or US Generally Accepted Accounting Principles (GAAP).
"The lack of unified standards across the UAE can result in inconsistencies that lower the quality of financial information.
"Besides, international companies who want to partner with SMEs find it difficult to analyse the financial numbers of UAE companies, leading to delays and backing off from partnerships or takeovers," Gianchandani said.
He called on local and regional firms to focus on training to equip themselves with capabilities, including trained staff to update their knowledge relating to IFRS or US GAAP.
Hiring qualified staff with knowledge of IFRS/US GAAP is difficult, and retaining people who have knowledge of these standards has also become a challenge.
"The number of national and multinational companies in the UAE has doubled in the last ten years," Gianchandani said, adding that the growth in the number of free zone companies alone was testimony of the growth of the UAE and Dubai in particular in the last decade.
"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.