An ICV (In-Country Value) Audit is a formal process conducted by certified ICV auditors in the UAE to assess a company’s compliance with the requirements of ADNOC’s ICV Certification program. The ICV program, introduced by the Abu Dhabi National Oil Company (ADNOC), aims to enhance the contribution of local companies and nationals to the UAE’s economy. It requires companies to meet a minimum threshold of in-country value for their goods and services, which encompasses local spending on goods and services, local employment of UAE nationals, and the transfer of knowledge and technology to the UAE.
ICV Audit Services in the UAE:
ICV audits are mandatory for companies working with ADNOC, its subsidiaries, and other government entities in the UAE that have adopted the ICV program. These audits are essential for maintaining a high ICV score, which can influence a company’s ability to secure contracts and renew existing ones with these entities.
ICV audits assist companies in identifying gaps, rectifying errors, and maintaining compliance with the ICV program. All ADNOC suppliers are required to undergo ICV audits, as ICV is a critical part of ADNOC’s tender evaluation and award process. Third-party verification of ICV certification is mandated annually by ADNOC to ensure compliance.
ICV Certification in the UAE:
ICV certification is a formal recognition awarded to companies that have successfully completed an ICV audit and demonstrated compliance with the ICV program requirements. This certification is a testament to a company’s commitment to contributing to the local economy and can significantly impact the award of contracts. ICV-certified suppliers are more likely to be considered favourably in the tender evaluation process.
Key Points on ICV Certification:
- ICV certification is based on the last audited IFRS financial statements of entities, which should not be older than two years from the certification year.
- For newly established companies (less than 10 months old) without audited financial statements, management accounts for up to 10 months can be considered for ICV calculations.
- ICV certification is valid for 14 months from the date of issuance of audited financial statements.
- ICV scores are calculated using a pre-defined methodology, assessing the economic value added within the UAE for the goods or services provided by the entity.
ICV Audit Procedure in the UAE:
The ICV audit process involves several steps:
- Scope Determination: The audit scope is defined, including the relevant financial periods and data sources.
- Data Collection: The auditor collects financial statements, procurement records, employee records, and other relevant documents.
- Data Review: The auditor reviews the collected data to calculate the company’s ICV score, which represents the percentage of total spending retained in the UAE.
- Audit Report Preparation: An audit report is prepared, summarizing the findings and the calculated ICV score.
- ICV Certification: Upon successful completion of the audit, the company is eligible to receive ICV certification, valid for one year.
- Follow-Up Audits: Companies are subject to follow-up audits to ensure ongoing compliance with ICV requirements.
ICV audits and certification are vital for demonstrating commitment to the local economy and enhancing the competitiveness of companies working with ADNOC and other government entities in the UAE.
Al Marzaan Consultancy provides ICV audit services in the UAE, helping companies navigate the complex requirements of the ICV program and ensure compliance with ADNOC and government regulations. Our experienced auditors play a crucial role in verifying and improving ICV scores, allowing companies to remain competitive in the UAE’s market.
For businesses seeking ICV audit services in Dubai and the UAE, Al Marzaan Consultancy is a reliable and experienced partner to help achieve and maintain ICV certification.
