Introduction – Control Gaps No Longer Tolerated 

Imagine your bank being flagged by the UAE Central Bank at year-end and facing heightened scrutiny on its internal controls over financial reporting (ICFR). This isn’t hypothetical. By December 2025, financial institutions and public joint-stock companies (PJSCs) in the UAE must not only have robust ICFR systems in place but also be able to justify their effectiveness under intense audit scrutiny. 

For CFOs, compliance officers, and audit professionals in UAE banking and financial services, this is serious. This blog will decode: 

• What UAE ICFR compliance 2025 entails 
• Key Central Bank requirements for internal controls 
• Common pitfalls that trigger audit failures 
• Practical steps to strengthen your ICFR framework 
• How ASC Group guides firms to pass December 2025 verification 

Understanding ICFR in the UAE Context 

• The Central Bank of UAE (CBUAE) Rulebook, particularly the Internal Controls, Compliance and Internal Audit (ICCA) Standard, mandates robust internal controls, audit, and compliance functions in all banks and financial institutions. 
• Meanwhile, the SCA’s (verify exact date and number) Circular for public joint-stock companies (PJSCs) requires adoption of the COSO framework and phased internal control reviews—with full independent auditor opinions on ICFR effectiveness required for financial years ending on or after December 31, 2025. 

The takeaway: by December 2025, banks must not only implement, but justify ICFR systems aligned with global standards—and verify control effectiveness via audit reviews. 

Why December 2025 Is a Critical Deadline 

The period leading up to December 2025 is critical for financial institutions and PJSCs alike. 

• Intensified Focus for Fiscal 2024: Institutions should be rigorously self-assessing ICFR gaps and commencing remediation. 
• External Assurance for Fiscal 2025: For PJSCs, independent auditor opinions on ICFR effectiveness will be required for financial years ending on or after December 31, 2025. Financial institutions should also anticipate heightened external review. 

CBUAE examiners will scrutinize your governance, control testing, audit follow-up, and issue remediation. Failure to demonstrate robust controls and effective remediation may result in escalating enforcement actions, including administrative sanctions, restrictions on operations, and, in severe or persistent cases, potential license action or board-level sanctions. 

Common ICFR Failure Points in UAE Entities 

1. Weak Control Environment 
Responsibility unclear among board, audit committee, and management—often overlooked in PJSCs and banks alike. 

2. Segregation of Duties Lapses 
First-line operations handling sensitive processes without oversight, violating Central Bank standards. 

3. Poor Risk & Control Testing 
Sample testing (ToE) scant; designs exist but are not validated or repeated over time. 

4. Inadequate Audit Follow-up 
Outstanding audit recommendations remain unaddressed or untracked by management. 

5. Governance Gaps in PJSCs 
Audit and risk committees don’t document oversight of ICFR processes, especially where third-line assurance is weak. 

Practical Steps to Strengthen ICFR 

Clear Accountability and Oversight 
Institute board-approved ICFR charters and ensure triple-line governance for control testing and risk oversight. 

Adopt COSO Framework Fully 
Use the five pillars (control environment, risk assessment, control activities, information/communication, monitoring) to structure your ICFR. 

Test Controls — Design & Effectiveness 

• Test of Design (TOD): Verify controls exist and mitigate identified risks
•  Test of Effectiveness (TOE): Validate actual control execution regularly 
  ﷟HYPERLINK "https://assets.kpmg.com/content/dam/kpmg/ae/pdf-2024/09/internal-controls-webinar-presentation.pdf?utm_source=chatgpt.com" 

Maintain Comprehensive Documentation 
Flowcharts, control matrices, testing logs, gap remediation trackers—all maintained for auditor review. 

Use Automated Tools 
Leverage platforms for automated testing, dashboards, and real-time monitoring to increase ICFR maturity and visibility. 

Independent Audit Integration 
Ensure internal audit and external audit perform thorough ICFR reviews and that findings are escalated to board level. 

ICFR Compliance Checklist for December 2025 

ASC Group's ICFR Advisory Framework 

ASC Group’s three-phase methodology helps financial institutions navigate compliance effectively: 

1. Diagnostic Audit 
Review current frameworks against Central Bank and SCA standards. Identify gaps and document risk heatmaps. 

2. ICFR Design & Implementation 
Map business-critical controls, document SOPs, and set up testing routines. Train staff across first, second, and third lines. 

3. Ongoing Monitoring & Audit Readiness 
Implement dashboards, track remediation, and support internal & external audit readiness ahead of December 2025 verification. 

Conclusion 

The supervisory shift in 2025 isn’t just about better reporting—it’s about accountability. Strong ICFR frameworks signal financial integrity, regulatory confidence, and investor trust. Prepare early, test controls diligently, and partner with experts like ASC Group to ensure your ICFR practices meet Central Bank and SCA expectations. View the December 2025 verification not as a risk but as an opportunity to embed excellence in your financial reporting culture.  

Contact ASC Group today to assess your ICFR readiness or build a tailored control assurance roadmap.