Bringing a company's management to a tip-top shape and maintaining that is very important for a business. To do so, there are many different tools and techniques followed by a business. One such technique is to audit the company at regular intervals. In the United Arab Emirates, auditing your company has been deemed mandatory in various jurisdictions. However, the management needs to do so even if it is not required. It will help the management understand the present shortcomings of the business and provide the management with a glimpse of how to deal with the future.
There are many different types of audits that the management can do to know the current status of the business. The different types of audits available to a company in the UAE are as follows:
- Internal Audit
Internal audit is a type of audit to find out the present status of the business concerning the internal workings and resources of the business. This audit helps find the bottlenecks in the business activities and how the resources can be utilized better for the business. An internal audit is usually conducted by an auditor or a team of auditors who is a part of the organization. This allows the auditor to know all the necessary information about the company.
An internal audit is a perfect option for a business that does not have much. Still, it also has a possibility that the auditor may give a biased result and can also be influenced by any other member of the organization into providing a false audit report.
- External Audit
An external Audit is a good option for the organizations which want the answers from an independent perspective. The organizations which have the financial backing or can spare some funds for an external audit must get the business audited externally. The chances of any bias in an external audit are significantly less as the auditor is an entirely different person and has no affiliations to the organizations. This reduces the chances of him being biased or favouring the organization.
This type of audit also provides information about the present condition of the business but from the third-person perspective. This will give an in-depth idea of how the organization is being perceived in the market and provide information about how the business can compete with its competition.
- Tax Audit
Taxation is a significant thing to consider for businesses. The Tax Procedure law states that the Federal Tax Authority (FTA) can examine all the records and documents of any taxable entity in the United Arab Emirates. Therefore, the FTA must make sure that the entity is complying with all the rules and regulations of the jurisdiction.
It is very important for businesses to ensure that they comply with all the rules and regulations so that the company does not face penalties in the future. In addition, the various companies can take the assistance of external third parties to help them in the management of taxes.
- Audit of Sales
The businesses which operate in the various malls need to present all the necessary data to the auditors on a mandatory basis. If these businesses are situated in a free zone, then these businesses must provide all the necessary business data to the approved auditor. In addition, these retail businesses need to provide the statement of Gross Turnover in the financial year to the auditor.
- Forensic Audit
A forensic audit (also known as fraud investigation) can be conducted by a business to track the various transactions and investigate these transactions. This type of audit helps a company while filing a police case. This audit will also help the management understand the various operational bottlenecks in the business and tackle such a situation.
The above mentioned five types of audits are most prevalent among the companies in the United Arab Emirates. However, for deciding which type of audit is required by a business, the management should take the assistance of a third party. This third party will also help in conducting the audit for the business.
If you are looking for such a third party in the United Arab Emirates, you can look at the service provided by JAXA Chartered Accountants. JAXA is a reputed financial firm and is one of the best internal audit firms in the UAE. JAXA also provides various other services such as Accounting Services, Auditing services, VAT and Tax related services. To know more about such services, feel free to contact us. We will be happy to help.