ICV Audit Services Dubai

ICV Audit Services Dubai

ICV Audit Services Dubai An In-Country Value (ICV) Audit is conducted to validate a company’s adherence to the requirements of ADNOC’s ICV Certification program. Introduced by the Abu Dhabi National Oil Company (ADNOC) in January 2018, the ICV Program aims to enhance the participation of local companies and nationals in contributing to the UAE’s economy.

To meet the ICV Program’s criteria, companies are obligated to achieve a minimum threshold of in-country value for their goods and services. In-country value is defined as the total spending retained in the UAE that contributes to the local economy. This encompasses local expenditures on goods and services, the employment of UAE nationals, and the transfer of knowledge and technology to the UAE. Companies are required to undergo an ICV Audit in the UAE to validate their compliance with the ICV Program. 

What is ICV Audit in UAE?

The ICV Audit is a mandatory procedure for companies operating in the UAE, serving as evidence of their adherence to the ICV Program. Certified ICV auditors perform this audit to assess a company’s compliance with the stipulated ICV Program requirements.

During the audit process, the certified ICV auditor meticulously examines the company’s financial statements, procurement records, employee documentation, and other pertinent documents. The primary objective is to ascertain the company’s ICV score, indicating the percentage of its overall expenditure retained within the UAE.

ICV Audit Services in UAE

Companies engaging with ADNOC and its subsidiaries, along with other UAE government entities adopting the ICV Program, are mandated to undergo the ICV Audit. Maintaining a favorable ICV score is crucial for these companies, as it directly influences their ability to secure contracts or renew existing ones with these entities.

Conducting an ICV audit serves as a proactive measure for companies to identify system gaps and rectify any errors. All suppliers associated with ADNOC are obligated to undergo the ICV audit. ADNOC’s In-Country Value program (ICV) aims to enhance localization, create more employment opportunities, and stimulate economic growth by localizing vital functions in the oil and gas sector.

The key objectives of the ICV Audit in the UAE, as outlined by the government, include:

• Emiratization: Expanding employment opportunities for Emiratis in the private sector.
• GDP Diversification: Increasing the sourcing of goods and services within the country to support economic diversification.
• Strategic Considerations: Localizing critical components of the value chain for specific categories of businesses. 

ICV Certification in UAE

ICV (In-Country Value) Certification in the UAE is an official acknowledgment granted to companies that have successfully undergone an ICV Audit, demonstrating compliance with the ICV Program requirements. Companies seeking ICV Certification must undergo an ICV Audit conducted by a certified ICV auditor.

Under ADNOC’s ICV program, all ADNOC suppliers are obligated to declare their ICV achievement through the issuance of an ICV Certificate. ADNOC mandates an annual third-party verification of the ICV Certificate numbers.

Under ADNOC’s ICV program, all ADNOC suppliers are obligated to declare their ICV achievement through the issuance of an ICV Certificate. ADNOC mandates an annual third-party verification of the ICV Certificate numbers.

Key objectives of ICV Certification include:

• Enhancing the randomization and expanding the services of the national workforce.
• Augmenting in-country expenditures on local goods and services.
• Evaluating risks and safeguarding assets.

The ICV assessment is now a vital component of ADNOC’s tender evaluation and award process. ADNOC necessitates third-party verification of the numbers on the ICV Certificate, conducted annually by one of its Certifying Bodies. As a leading ICV Certifying body in the UAE, MAK provides businesses with ICV Certification Services, encompassing business assessment, ICV Audit, and management of ICV Score to ensure compliance with the country’s regulations, thereby offering substantial support to businesses. 

Key Points on ICV Certification

• The basis for ICV certification relies on the most recent audited IFRS financial statements of entities, not exceeding 2 years from the certification year.
• For recently established companies (less than 10 months old) lacking audited financial statements, management accounts covering up to 10 months can be considered for ICV calculations.
• The validity of the ICV certificate extends for 14 months from the issuance date of audited financial statements.
• ICV Scores are computed using a predetermined methodology, evaluating the economic value added within the country for goods or services provided by the entity.
• The ICV score plays a crucial role in bid evaluation, providing additional weightage to suppliers and vendors in the award process.
• Entities indirectly associated with tenders also benefit from the ICV certification program, as the “spend” by ICV-certified suppliers remaining within the country contributes to ICV calculations.
• Companies achieving a high ICV score through a successful ICV Audit are eligible for ICV Certification, valid for one year and subject to renewal upon completing another ICV Audit successfully.

ICV Audit Procedure in UAE

The ICV Audit process in the UAE is a formal examination conducted by a certified ICV auditor to assess a company’s adherence to the ICV Program requirements. The procedure includes defining the audit scope, gathering relevant data, scrutinizing the data, calculating the ICV score, preparing an audit report, and issuing ICV Certification. Companies successfully passing the ICV Audit with a high ICV score become eligible for ICV Certification, which is valid for one year and subject to renewal upon successfully completing another ICV Audit.

To sustain compliance with ICV requirements, companies are mandated to undergo follow-up audits and monitoring by ICV auditors. This ensures ongoing adherence to the ICV Program requirements. In essence, ICV Audit and Certification hold significance for companies engaging with ADNOC, its subsidiaries, and other UAE government entities embracing the ICV Program. It serves as a testament to their commitment to contribute to the local economy, potentially enhancing their prospects of securing contracts or renewing existing agreements with these entities. 

These auditors maintain independence and objectivity, holding a pivotal role in evaluating a company’s adherence to the ICV Program requirements.

Utilizing a methodical and thorough approach, ICV Auditors assess a company’s expenditures and its impact on the local economy. They systematically collect and analyze data and documentation to calculate and enhance the company’s ICV score, representing the percentage of total spending retained within the UAE.

Our ICV Auditors may conduct subsequent audits and monitoring processes to ensure sustained compliance with ICV requirements. Additionally, they offer valuable guidance and recommendations to companies on strategies to improve their ICV score and amplify their contributions to the local economy. For a comprehensive range of audit services in Dubai, feel free to explore our offerings.