Audit Readiness for Construction Companies in UAE

Documents to have ready

• Contract register with value, variations and status
• Work-in-progress schedule per project
• Retention receivable and payable ledgers by contract
• Subcontractor statements and accrual workings
• Fixed asset register covering plant and equipment
• Bank bond and performance bond list

Reading a work-in-progress schedule properly

A WIP schedule is only useful if each column ties to something outside the spreadsheet. Contract value should agree to the signed contract plus approved variations. Cost incurred should agree to the project cost ledger. Billed to date should agree to the invoices issued, and certified work should agree to the consultant's payment certificates.

The gap between certified value and billed value shows under-billing, and the gap between billed value and earned value shows over-billing. Both are normal during a project. A gap that keeps growing month after month signals a dispute, a delayed certificate or a cost estimate that has not been updated. Reviewers will ask about each of those gaps, so write a one-line explanation beside every project.

Cost to complete and loss-making contracts

Estimated cost to complete is the most judgement-heavy number in a contractor's accounts. Ask each project manager to update it monthly. They should use current subcontract orders, material price quotes and remaining site duration. Keep the signed update on file.

If the revised total cost exceeds the contract value, the expected loss should be recognised in full rather than spread over the remaining work. Review any project where margin has dropped sharply between two months. It often means a cost was missed earlier or a variation is not yet approved.

Bonds, guarantees and site assets

Performance bonds, advance payment guarantees and bid bonds are off-balance-sheet commitments, yet banks and reviewers want them listed. Keep a register showing the issuing bank, amount, expiry date, project and the cash margin held. Expired guarantees that were never released are a common loose end.

For site assets, tag each machine or temporary structure to a project and record where it is located. Reconcile the register to the fixed asset ledger so depreciation is charged to the right job.

A bond that has not been released on time can keep cash tied up with the bank. Diarise each expiry date and request the release letter once the contract conditions are met.

Common gaps in construction company accounts

The plan, in order

Licence and scope