In today’s world, it is essential to understand the financial standing of the business, and this can be found out by performing an audit of the company. In a company audit, the concerned officers inspect all the books of accounts, and through their inspection, the various loopholes within the company or any procedure which may be causing harm to the business are found out.
Who is a Registered Auditor?
A registered auditor can be a firm, group of individuals or an individual who performs the inspection of the company or business and is registered with the authority in the jurisdiction. This inspection usually includes the scrutiny of the financial books of the company. Most of the times can hear the term registered auditor while learning about the various free zone in the United Arab Emirates.
It is required that an approved auditor must comply with all the rules and regulations as stipulated by the management of the free zone in which the business is established. The certified auditor has to ensure that all the financial records of the company present the correct and accurate business data and the books of accounts of the company are prepared according to the reporting standard followed in the jurisdiction which is usually the International Financial Reporting Standards (IFRS) or the reporting standards mentioned according to the regulations of the free zone.
Benefits of a Registered Auditor
A registered auditor can provide various services to a business and can assist the business in conducting their businesses more simplistically. There are various other functions that a registered auditor is required to perform. These functions are mentioned below:
- The most noteworthy advantage of all is that it has been deemed mandatory for an auditor to be registered with a particular free zone as only an auditor who is registered with the free zone is eligible to conduct a company audit in the free zone.
- It is the responsibility of the registered auditor to mention the income, profits and any other necessary information of the company which are obtained from various sources. This report should also consist of the total income generated from the various sources which are not covered under the scope of the licenses.
- All of the salary expenses which are incurred by the business must be disclosed in the annual financial report of the company.
- During the preparation of the annual financial account, all the notes and appendices of the company which will affect the business revenue should be mentioned and explained appropriately and accurately.
- The Auditor should mention the bank balance of all the companies, which should be cross-checked and confirmed by the relevant banks.
- The auditor should mention the articles which will help in the cross-checking of the financial period and the share capital of the business.
These are some of the benefits that a registered auditor will provide to a business.
Why should you conduct an Audit of your Company?
An audit of the company must be performed both Internally and Externally. The main reasons why you should conduct an audit are given below:
- Provide a Complete Overview
The audit of the company will provide a comprehensive and detailed report of the financial condition of the company. Such a report of the business will allow the management of the company to understand how they can better utilize the resources and where to hold back the resources of the company.
- Be More Accountable
After the audit, the management will have access to the financial reports of the business and will be better able to understand the current financial standing of the business. It is the duty of the management to understand problems and provide a viable solution for the betterment of the company.
- Boost the Ratings
With all the necessary reports at hand, the business will be able to better avail funds from various sources. The reports will embolden the management and will also provide a sense of transparency of information which will, in turn, assist the company ratings. This boost in the ratings will ultimately increase the profitability of the company.
- Attract Investors
All the investor should invest in a company only after going through the audit report. The auditor will prepare a comprehensive report which will mention all the necessary information which can be used by any investor, either present or potential, to understand whether to invest in the company or not.
There are many more benefits of which can be availed by hiring the services of a Registered Auditor and conducting the audit of a company. Conducting an audit will be very beneficial for a company, especially a start-up. If you are looking for services linked to Audit or Accounting in the United Arab Emirates, you must look into the services provided by JAXA Chartered Accountants. JAXA is a Chartered Accountant firm that will take care of any financial issue which is being faced by your business. For more specifics, contact us, we will be glad to help you.