Government Accounting in the UAE - Article Example

Running Head: GOVERNMENT ACCOUNTING IN THE UAE Government Accounting in the UAE Ateeka Salem Shaikha Al Ameri Institution: BMAC N470 Date: Table of Contents Introduction 3 Objectives and major activities of Dubai Convention Bureau 4 Impact of current crisis on the Dubai Convention Bureau 5 Budgeting and Budget Process used 6 Types of Fund used and Resource utilization 7 Audit process and procedure 8 Financial Reporting and Analysis 9 Relevant constraints and restrictions of the Dubai Convention Bureau 11 Bibliography 12 Introduction One of the major non-profit organizations that are operating in the UAE is Dubai Convention Bureau that is situated in the Middle East. The bureau is a division of the Department of Tourism and Commerce Marketing, a non-profit government funded organization, whose aim is to further develop and increase Dubai’s share of the international MICE and special events markets, whilst maximizing the economic prospects of Dubai. The DCB is dedicated to pursue and win events through national and international promotions to advance the position of the Emirate as a leading business tourism destination. The production side of the UAE economy heavily depends on expatriate labor that have ended up affecting the size of the indigenous population thus leading to the organization to be disadvantaged in terms of quantitative and qualitative aspects. The outcome of the employment shares and sectoral shares in the UAE GDP leads to the issue of optimal allocation of the labor resource, this furthermore creates a situation where there is wide and extensive variation between the labor productivities in the different sectors that is aimed to focus on differences in the quality of labor and the nature of the sector. The expansion of the UAE economy has not been smooth due to the inflation instabilities that have been reflected in the large expansions and constrains, thus this can be due to continued increase in the UAE population to have been coupled with the slowdown of the economy. Hence this paper has been analyzed to show the impacts that the company is implying to reach their target and their current state. This does not imply that it is the only firm with advanced financial management in the UAE. However, it is a suitable sample that can be used to show the management of finances in government accounting systems in the United Arab Emirates. Objectives and major activities of Dubai Convention Bureau Dubai Convention Bureau is a non- profit making organization that plays a significant role in promoting the economy of U.A.E through tourism events. The organization aids in bid assistance of all the individuals around the globe, convention planning and onsite servicing including preparation of accommodation venues and facilities for tourists. A good business environment for some well-known people who have formed a platform for nurturing relationship among the staff has been developed thus making this a better organization. They also aim to promote a better understanding by expanding commercial relationship between the customers, the company also tends to hold meetings as a way of exchanging views that can lead to the ability of updating information concerning commercial activities than can help the relevant customers (Nyrop, 2008). The firm assists in planning and organization of virtually any kind of MICE event one may wish to imagine. Its staff is professional and dedicated to ensuring tourism events are an outstanding success. This is also done with an aim of creating more job opportunities and uplifting the economic performance of UAE while servicing the tourists’ needs. The company organizes seminars by inviting prominent personnel’s that they are trading with and other government organizations that can help to expand their investment hence reach their dedicated target. The company furthermore invites prominent people from the bank and institutions with the aim of being helped on issues that relate to facilities from different companies hence improve on their company. It also aims to interact with the government department for the purpose of solving trade disputes and also as away of improving shipping and transport services of the company, hence by employing all these objectives the company aims to promote their business interests for the staff and also their customers (Nyrop, 2008). Impact of current crisis on the Dubai Convention Bureau The ability of the company having business tie-ups in different countries has led their work to be delayed and thus unemployment has risen, this has made some companies to retrench a portion of their employees hence leading to a major loss by the company. This crisis has furthermore led the volunteers who had business ties with the company to incur major losses hence this has led to some financial institutions to lend credit to the company. The issue of unemployment in the Middle East has further led to the banks to face a major collapse as there are no people who are investing in them but the company is borrowing capital, thus this issue is degrading the economy of the investors and volunteers in company. The global economic render down has pushed the bureau to the verge of a political crisis from the impact of the ongoing global economic downturn, this has been possible as the existing federal institutions and personalization in the bureau politics has exposed the leaders’ inability to respond in harmony to the current crisis. The company’s speculations have fueled about the company’s inability to react to the crisis as other sheikhdoms have terrible need to assist it. A fall of price in the company has opened against the company the foreign investors who have claimed that the partners of the company go to the extent of defrauding them thus leading to their collapse (USA International Business Publications, 2007). The collapse of global investors in the company has led them to experience losses which have sensitized the company on the importance of being conventional with the aim of increasing their projects at a faster pace. Budgeting and Budget Process used Budgeting is the process of making a documentation of the translation concerning the plans for capital that needs to be spent for the planned strategies of a company. This shows that the issue of using a budget in the company helps to make estimations of the amount of capital that would be required for the company to handle the projects that can be done by it. Budgeting leads the company to be highly selective in handling the responsibility by helping the employees to clearly understand the company’s strategies and plans that can be useful in the near future. The employees should also be in the position of clarifying on the importance of cost-efficiency and cost effectiveness by having knowledge concerning the resources that can be used to generate and raise funds (Peevers, 2010). Budgeting plays an extremely important role in planning the concepts of the company by implying the right target at the right time that can lead to success. It also aids the company to make major issues for the future as it assures the company the fact that it can have enough capital to do obligatory projects so as to prove its competency. Hence every planning of training has to be supported by the budget as an incomplete training would actually be of no use as it would be insufficient to fulfill the company’s criteria (Nyrop, 2008). Once a planned budget is introduced, the whereabouts of the employees to finish their work in the fixed time would have an effect on their salaries. Hence this leads the company’s activities and money to be under control with the introduction of the budget for the financial plan as it becomes much more efficient if it works in a controlled manner thus lead to a mutual benefit by both the employees and the company. The allocation of resources in budgeting is also an important aspect; this is so as the allocation of resources such as raw materials time and human resource has to be planned through a desired budget for the company to achieve its target hence leads to a successful business plan. Types of Fund used and Resource utilization Dubai Convention Bureau invests in funds called SWF, the aim of this fund is to derive money from the company’s reserves and set aside for the purpose of investment that is supposed to benefit the company’s economy and the citizens. The funding usually comes from central bank reserves that have accumulated due to the budget and the revenues generated from the exports of natural resources. This has led the company to branch out their revenue streams by devoting a portion of its reserves to an SWF that has invested in other assets that can act as a shield against related risks. The company has taken a step by investing their funds in Islam for the purpose of regenerating and renewing the consciousness of the communities, hence development of a comprehensive and a liberal approach with the perspective of educating people both at the rural areas and the urban to the less privileged people in the community (Peevers, 2010). There is also the need of investing in the female education as they definitely have a dominant role in upbringing the children and also instilling them with good traits and virtues. The company furthermore imparts and prepares volunteers to provide moral physical aid and helping in the emergency to the victims of natural and also man-made calamities. There is the issue of entrepreneurship programs that have been organized for the purpose of inspiring the students to set up their own units and thus become job creators instead of being job seekers. The company is moreover investing in the education sector as a solution of eradicating poverty and also an effective engine for an overall development of the nation International (Monetary Fund, 2007). Their goal is to develop a friendly atmosphere for the intellectual, spiritual growth of the children by awakening consciousness to lead a disciplined life on a guided principle of the Islam. This has been possible by arranging to pay school fees for the students from local schools and those students that their parents are not financially stable hence reducing the number of drop-outs hence increasing the level of literacy among the students. There is also the investment of medical schemes that have been put in place for the purpose of extending free medical services to the economically weaker expatriates. This has been the case as they are unable to go for checkups and treatment due to financial problems and the issue of being ignorant about the diseases (Kakan, 2007). Audit process and procedure The audit of Dubai Convention Bureau is the foundation for decision making in the capital markets, this has been possible with the company being motivated and implying cohesive appraisal for the clients in ways that seek to advance in traditional notions of auditing to focus on the client relationships. Thus this shows that the forum is designed majorly for the purpose of analyzing some light on the complexity of the audit process, this also show the consistency of the company. The ability of being consistence ensures that the clients are provided with quality auditing through outlining the phases of the audit thus provide a clarified comprehensive understanding of the importance of the complex process. Thus a process audit is a review concerning business and operations that determine the desired results and measures them against the encoded goals of the company at stake (Ahmad, & Alfaris, 2010). The first procedure of a process audit is the planning stage where auditors and the management team of the company determine which business function best. Thus the auditors of the company go to the extent of demanding to know the results expected from each business for the purpose of testing the efficiency of the process. Internal controls leads to the management of designed guidelines of how the employees ought to follow to achieve the company’s goals. The auditors also review functions and operations during fieldwork and gather information by comparing the current operational procedures of the company’s manual hence compile their results for the purpose of managerial review by the company. When the final stage of process audit of analyzing the results and having follow-up meeting is complete, the company’s management discusses the audit and the auditors opinion on the process hence improve the company’s process (Kakan, 2007). Financial Reporting and Analysis Dubai Convention Bureau ensures that there is efficient management by producing management of accounts that are in connection with the accounting teams thus be in the position of comparing actual and budgeting by explaining on the cause of the gap. It also reviews and analyzes the company’s performance indicators by building and consolidating a reliable and applicable board of executive dashboards. The ability of creating a secured standardization and methods of calculations across the company assists in the process of publishing reports and referenced documents by the company. There is also the issue of conducting demand analysis that is aimed for the purpose of answering specific requests that are usually made for the purpose of building up a standard database for benchmarking data in the company. The sector furthermore focuses on demonstrating and analyzing the findings of the content the describes the main social reporting categories that are presented and followed by critical analysis of the disclosure that is usually under the disclosure that is theoretically reflecting the organization. Some disclosures under this category provide statements that confirm the strict adherence to the principles of Islamic Sharia in the organization disclose their major concern on how the consideration by the Islam religion has influenced their business activities. There is also the issue that the Arab population particular characteristics that have been evidenced throughout the reports with religion and national interests that have been emphasized as the drivers for economic decision making. Hence this prepares and assists the company to be in the position of defining external reporting of both monetary and non financial investors (Ahmad, & Alfaris, 2010). BALANCE SHEET OF Dubai Convention Bureau Balance Sheet, Dec. 31, 2009, and Dec. 31, 2010 (per FTE physician) ASSETS 2010 2009 Cash $20,338 14,375 Accounts Receivable 60,869 82,381 Less allowance for doubtful accounts (249) (1,235) Prepaid Expenses 6,823 6,284 Total Current Assets 87,356 101,805 Buildings, Furniture and Equipment 35,859 20,310 Less Accumulated Depreciation (4,791) (4,064) Net Long-Term Assets 31,068 16,248 Other Assets TOTAL ASSETS $118,424 118,053 LIABILITIES & EQUITY Retirement Plan Payable $5,886 4,528 Payroll Taxes Payable 6,416 5,545 Notes Payable 560 3,943 Current Liabilities 12,862 14,061 Long-Term Debt 27,593 27,789 TOTAL LIABILITIES 40,455 41,850 EQUITY (Fund Balances) 77,969 76,203 TOTAL LIABILITIES & EQUITY $118,424 118,053 The budget used in the analysis of the information relating to the operation of the budget is a cash budget. It shows the cash inflows and outflows resulting from the subscriptions of the members and the grants from the government. Relevant constraints and restrictions of the Dubai Convention Bureau The company has completed its consolidation and has formally integrated a family rule within its institutional set-up for the purpose of pursuing a process of social and economic development. The leaders are committed to modernize the state on all levels by using its financial resources to achieve its goals; this can be sorted out by being ready and willing to share the responsibility by actively contributing to both regional and global security of the company. The company has to wean the current generation of the citizens off the sense of entitlement that has been created over the years for the purpose of building relationships between the citizens who are striving to become productive members of the society. It also needs to move from the prevailing top-down decision-making to the one that is based on accountability and the rule of law (Page, 2004). The company has come up with the constitution that has given sovereignty to the individuals that has led to the expansion of the federal jurisdiction to the areas that it can function hence improve the state of the company. The vast investment in infrastructure and services has gone to the extent of transforming the company to a modern one by employing all the amenities that are found in the western industrial societies. The result of the massive nurturing has led to a gradual implementation of economic fair practice that has been designed to abide by the legal standards of governing business transactions. Thus the ruling arrangements have remained reliant solely on personal capacities and also the maintenance of a high level of economic growth and social well-being. The company has also introduced political reforms due to its involvement with the global media revolution that has eroded the state’s monopoly on information dissemination among a markedly youthful population (Page, 2004). Bibliography Page, K (2004) Middle East Review, edition 27, Kogan Page Publishers, Qatar. Ahmad, E & Alfaris, A (2010) Fiscal Reform in the Middle East: VAT in the Gulf Cooperation Council. Edward Elgar Publishing, Iran. Kakan, R (2007). Financial Accounting For Management, Edition2, Publisher Tata McGraw- Hill Education, India. Peevers, A (2010) Dubai. Edition6, Publisher Lonely Planet, Dubai. Nyrop, R (2008) Area Handbook for the Persian Gulf States, Publisher Wildside Press LLC, Kuwai International Monetary Fund (2007), United Arab Emirates: financial system stability assessment Issues 7-357 of IMF country report. International Monetary Fund. USA International Business Publications (2007). Doing Business and Investing in United Arab Emirates Guide World Strategic and Business Information Library. Edition6. Int'l Business Publications. Read More