MOIAT Branch Audit Rule for ICV: Requirements, Risks & Compliance Guide

The shift toward branch-level auditing reflects MOIAT’s intention to capture financial performance and localisation impact at a more granular level. Consolidated accounts tend to blur the economic footprint of each branch, especially when procurement, payroll, and assets are pooled. By isolating each branch’s activity, the ICV score becomes a more accurate reflection of where value is created, allowing the government to evaluate localisation outcomes Emirate by Emirate.

Branches within the same Emirate often fall under one licence, but they may still carry separate activities, cost centres, or operational setups. MOIAT’s intent is not only legal structure but also operational transparency. If the branches function distinctly — with their own revenues, procurement patterns, or staffing — auditors are generally expected to treat them individually. However, where activities and books are genuinely unified, auditors may still consider a combined review, provided disclosures support that structure.

Shared-services setups can continue, but reliable branch-level allocation mechanisms must support them. The new rule doesn’t prohibit centralised accounting; it simply requires that each transaction can be traced to the originating branch. Companies relying on shared ledgers may need to enhance cost allocation, tagging, and internal reporting controls so the auditor can extract branch-specific performance without relying on assumptions alone.

The absence of revenue does not prevent branch evaluation. MOIAT views localisation through multiple dimensions — payroll, Emiratisation, operating expenses, assets, and supplier spend. A branch with zero revenue can still demonstrate localisation contribution. The key requirement is that audited financials present a true picture of that branch’s activity, even if minimal.

In such cases, certification teams generally look for evidence that the company made reasonable attempts to comply. Where historical data isn’t split by branch, auditors may request internal allocations backed by logic, documentation, or ERP extracts. MOIAT tends to be cautious about accepting reconstructed data, so companies may face delays or partial scoring. Preparing proper branch-level books early significantly reduces these risks.

There is no specific mandate to upgrade to a new ERP, but whatever system is used must allow auditors to extract branch-level transactions without relying on guesswork. This can be done through tagging, cost centres, or structured spreadsheets. The emphasis is on traceability rather than technology, so even smaller systems can comply if properly configured.

Auditors generally expect staff costs to be allocated based on the economic reality of their work patterns. Time sheets, project logs, or HR deployment plans can support fair allocation. The goal is to avoid double-counting and to ensure that each branch shows only the payroll cost genuinely associated with its operations. Consistency across months is more important than mathematical perfection.

Branches treated purely as cost centers often show higher expenses and little to no revenue, which can distort certain ratios. Under the 2025 framework, auditors may focus more on localisation inputs—payroll, assets, supplier spend—rather than revenue-driven metrics. While some score categories may shift, branches can still achieve competitive ICV results if localisation efforts are well-documented.

Merging branches across Emirates tends to conflict with MOIAT’s objective of Emirate-level economic visibility. Even if activities match, the geographical footprint is considered significant. Auditors may hesitate to combine branches unless MOIAT provides explicit justification. In practice, companies are advised to maintain separate reviews when branches operate in different jurisdictions.

Shared suppliers continue to be acceptable, but the company must show how the spend was consumed by each branch. Allocation can be based on usage, volume, project size, or other logical drivers. The auditor’s role is to ensure the methodology is reasonable and consistently applied. Clear documentation from procurement teams helps avoid disputes during certification.

During transition periods, some flexibility may exist, especially for companies that historically used consolidated books. However, MOIAT generally prefers branch-specific audit trails. A hybrid model may be acceptable if the supporting schedules are detailed, well-substantiated, and reviewed by the auditor. Transition allowances, if any, will likely reduce over time as the 2025 requirement becomes standard practice.

Auditors are expected to outline the methodology used to isolate each branch’s financials. This may include allocation principles, inter-branch eliminations, shared cost distribution, and verification procedures applied to branch sub-ledgers. Enhanced disclosures ensure that MOIAT can trace how the auditor arrived at branch-level results, especially when centralised systems or shared services are involved.