Setting up a company in Dubai is like a dream for many people in business and entrepreneurs all around the world. The company can take advantage of various benefits available to all the businesses coming into the country. this is both helpful for the economy of the country as well as the growth of the business.
In this continually changing business environment, a business has to reinvent itself continually. Many a time after starting a business, the management will go through a rough patch, and during these times, the business must conduct a Financial Audit of the company.
The companies present in Dubai need to conduct an audit as the local legislation requires it in Dubai. Let us first understand what an audit is and how it can be beneficial for a company.
What is the meaning of a Financial Audit?
A financial audit is a thorough examination of all the company’s financial statements to understand its financial health. This Audit can be performed by an Auditor, which should have no relation or connection to the company or the client. According to the needs o the company and the requirement of the situation, either an internal auditor can be chosen or an external auditor. There are differences between both an internal and external auditor, which have been highlighted in our blog “Difference Between Internal and External Audit in Dubai.”
In Dubai, companies need to follow IFRS, which is the International Financial Reporting Standards. It will provide a guideline to the auditor as to how should the Financial Audit be conducted. The Internal or External auditor chosen for the audit will have to recognize the situation and accordingly decide how the audit should be conducted.
Benefits of Conducting an Audit
A company can avail of a number of befits by conducting the Financial Audit. These are:
1.Determining the Financial Position of the Company
The financial Audit will comprise a summary of all financial statements, which will help the management determine the business’s financial health. This will help the management to understand the requirements of the company and work accordingly.
In today’s world, compliance is a very important factor. Not fulfilling the necessary compliance requirements can lead to the obligation of fines and penalties and may even result in the debarring of a business.
3.Preventing Fraud or any other Unwanted activity
By having a check on all the business’s financial statements, the management will be able to understand any deviation from the expectation, which will intern help reduce any chances of fraud.
4.Helping in maintaining Updated Company Records
Since all the financial books are revised from time to time, the management has access to updated books of accounts, which may be required to prepare other financial records or when filing for taxes.
5.Provides Assistance in generating a Plan for the Future
An Audit provides summaries of all the financial statements at a single place, and thus it is used by the management to predict and plan for the future of the business.
There are many more benefits of conducting an audit by a company. If you want to know more, refer to our blog, 10 Significant Advantages of Financial Audi to a Company in 2020.
With an increasing amount of investments and the demand for compliance and regulations, auditing firms have a huge scope. These firms will help you plan out all the various business activities and can also assist the management in finding new avenues for better profit.
If you want to conduct audits at various times suitable to your company, then you can take the assistance of JAXA Chartered Accountants. The experts at JAXA will provide you with all the necessary solutions which will help the company to flourish in the jurisdiction. They can also aid you in discovering the trend of the business in the future so that the company will be better armed for it.
For more details, Contact Us. We will be glad to help you.