The Dubai Multi Commodities Centre (DMCC) was established by the government of the city, to provide essential infrastructure for the exchange of materials, and furnish its place as a trading pinnacle.
Currently, the membership of the organization numbers in the several thousand, comprising commodities and several other trading items.
There are a number of investment mechanisms corresponding with commodities, alongside storage options for valuables. Today, the center is built on a full-fledged community comprising several recreational and food services, inhabited by about 90,000 people.
The major traded materials include gold, diamonds, pearls, and tea.
The city has been an important worldwide market for gold and its bullion status has come to be renowned globally.
The DMCC provides a safe transfer and a commercial destination for diamonds and precious stones as well. The level of security given to stakeholders allows the trade to establish new records in terms of value.
A DMCC auditing firm must display a specific expertise in the analysis of commodity exchange to be beneficial to traders and associated companies.
Auditing Firms And Commodity Trade Risks
While commodities once used to be extremely popular devices owing to their relatively stable pricing and constant appreciation, they have now become secondary to property investments and mutual funds.
High volatility during the last decade, pertaining to by and large all major traded commodities have made the area less sound for investment. This has forced key players across the world to dabble into high-risk activity and take radical steps to boost profit margins.
Organizational Risk Profile
As companies try to encourage profits and make riskier bets, some dangers belong outside the auditing or accounting scope and come down to the steps a corporation takes.
Organizations often make use of risk managers to handle affiliated processes. If these professionals are inexperienced or lack the power and influence to prevent the leadership from engaging in impulsive decisions, the company could become exposed to dangers.
While large companies often draw a strict distinction, there may be times where commodity traders could become influential in decision-making processes. This runs the risk of blurring of the lines and can affect rigid leadership decisions.
When faced particularly with an environment where company profits are being squeezed, an organization may decide to entertain the inclination to subscribe to murky products, without fully appreciating the dangers.
Auditing Firm First Hand Role
This department must be capable of identifying and rectifying unclear business models and practices. Especially as corruption becomes a high-priority issue across the world, companies may seek to go below the radar as far as which individuals and organizations they are trading with, particularly internationally.
An auditing firm in DMCC would benefit from the higher scrutiny of processes other firms would otherwise overlook or ignore.
Expert auditors will also need to periodically analyze how the company’s major decisions affected its commodity trade footprint, making these more accessible.