Just like the accounting or VAT serves to be the strongest pillars that hold an organisation, Audit too plays a crucial role that goes beyond just numbers and statements. It analyzes the loopholes of business and fixes it. Regarding financial audit, it dives into the financial department and gives a clarity regarding the company’s financial stability.
Evaluating a company’s financial records turns out to be a vital process to be carried out. It estimates the process that has been carried internally and externally to determine whether they are accurate and in line with the auditing standards and regulations.
Carrying out the financial audit process in a company can boost the company’s growth as it depicts the relevant figures related to business assets and liabilities. Being a business owner or an entrepreneur, you should have a gist about what financial audit is all about and how it can improve your business ranking. This guide will help you to proceed ahead and understand.
The Auditing Milieu in Dubai
The Emirates serves to be one of the investor-friendly platforms that blend world-class infrastructure and attractive incentives. Down the line, it has emerged as one of the most sought-after destinations for the business establishment in the Middle East. This increased the count of companies implementing accounting and auditing services, which ultimately increased the number of audit firms in UAE.
Now, the accounting and auditing firms in Dubai has made it flexible for business entities to enhance their reputation and credibility to the next level. Realizing this fact, the foreign investors at present seeks for auditors in UAE, to ease the process and enhance business stability.
Advantages of Availing Audit Services in Dubai
- Auditing helps to locate the errors in financial statements
- A proper audit helps in identifying frauds if any
- An audit report acts as a fund-raising tool; the financial institutions or banks are likely to lend loans easily to companies that have financial statements and are compliant with the auditing standards
- The financial audit report is a mandatory document at the time of renewal of license in most of the free zones in the UAE
- At the event of unforeseen happenings, an audit report acts as insurance to settle the claims
- An audit report enhances the credibility and viability of a company
- Better internal control is possible with the help of audits
Requirements for an Initial Audit in Dubai
Any organisation that is willing to get its financial statements audited for the first time needs to be ready with the following documents:
- General ledger
- Trial balance
- Loan statements
- Copies of loans, leases, and material contracts
- Depreciation schedule
- Lists of all new fixed assets purchases with purchase invoice
- Board minutes
- Payroll reports
- Stock subscription and option agreements
- Copies of pending or completed merger agreements
- Names and contact details of any attorneys used and stock transfer agent
- Details of all bank accounts
- Articles of Association (AOA)
The Audit Process
To implement the audit service, an auditing company in UAE follows the below-stated process.
1. Request for Documents
The auditor asks for documents listed on the preliminary audit checklist. These documents include a previous audit report, ledgers, and bank statements. He/she may also request for board minutes, organisational charts and standing laws.
2. Preclusive Meeting
In the next step, the auditor calls for an open meeting with the Senior Management and key staff. The conference is arranged to discuss the scope and objective of the audit and to determine the time frame for the review.
3. Preparation of Audit Plan
Moving ahead, the auditor examines the information contained in the documents and plans out how the audit can be conducted. A risk workshop is held to recognise possible problems and, then the audit plan is drafted.
4. Paper/Field Work
In this step, essential information is collected from the open meeting. Fieldwork is then conducted to study the procedures and processes. The auditor will review the internal control to evaluate whether policies and procedures are compliant with the regulations. He will also give an opportunity to the organisation to respond to problems if any.
5. Drafting Report
Once the fieldwork is complete, the auditor prepares a report describing the findings of the audit. Generally, the report includes posting problems, mathematical errors, and other audit concerns. The auditor then prepares an opinion sheet detailing the findings of the audit and recommends solutions to any questions.
6. Closing Meeting
The auditor arranges for a meeting with the management to discuss the report and management responses. If there are any remaining issues, they’re reviewed and resolved at this point.
We can say that availing services from audit firms in UAE help business investors to understand the current scenario, as well as plan for a better future. It is worth noting that the UAE government has made it mandatory for all companies to prepare the audit report. Thus, no company can look away from the process of audit in Dubai, be it internal audit or external audit. The process becomes more comfortable if a professional take care of the documents to be drafted.
At JAXA, we assist our clients in analysing the performance of the business against objectives and evaluate the business processes. We also asses business risks and benchmark them against the industry standards. To avail the audit services in Dubai and the rest of the UAE, contact us – we’d be glad to assist!