Whenever the business owners hear the word audit, it is natural for them to wince ones or twice. They feel that the money and time spent on the audit process could be put to better use in developing the business. Nonetheless, the audit process is a very crucial service that a business requires, regardless of the size of the company, for its future growth and development.
The conducive business environment and the great plans of the government of UAE have not only resulted in the growth of the economy but also forms the prime reason for the increase in the number of businesses. This has created a vast demand for accounting and audit firms in Dubai.
Let’s have a look at what is audit is and how it can enhance the growth of a business.
What is an Audit?
An audit is the overall inspection of the financial health of your company. It helps the business owner to form an opinion about the current workings of the business and also helps in making decisions about the future of the business. As the audit report provides a precise and complete picture of the financial health of the company, it is considered one of the most important documents for an investor who wants to invest in the company. The different categories include internal audit services, external audit services, statutory audit services, etc. Now, the question arises…
How will Audit Boost Business Growth?
The result of an audit can be beneficial in finding the weaknesses of the companies or any other flaws which they might have overlooked.
Here are a few ways that an audit can help your company:
Identification of flaws
The audit allows us to find out any risk assessment and assists in the risk managementand review the workings of the business. This will result in the better performance of the company and will help in the removal of any such problems in the future.
Discover Fraudulent Activities
After conducting a fraud investigation audit, we can get a comprehensive picture of the financial status of the business which would allow us to carefully scrutinise the workings of the business and uncover any fraudulent activity.
Better Tax Management
It is the auditors’ job to find out any significant tax risks and should make the management aware of any such taxes. This would help in minimising the chances of filing wrong tax returns, tax violations and the occurrence of other tax risks and would also decrease the chances of substantial penalties.
Future Expansion
The business audit would provide a clear and comprehensive insight into the financial status of the company, which would help the company to expand into new markets and segments.
Greater Confidence
The audit of the financial statements provides the partners and the stakeholders with a heightened sense of confidence in the business. According to them, audited financial statements are more reliable in comparison to the unaudited documents. This is very helpful if the business is trying to obtain funds or merge with other companies.
Sale of the Business
An audit will add a layer of assurance and will also improve the credibility and reliability of the data being submitted to prospective purchasers. This will significantly speed up the transaction process by providing the verifiable and correct details about the business and will also help in the preparation of the due diligence audit report.
These are some of the benefits that the auditing process provides to a company. These benefits would help the business in getting an accurate and clear financial picture of itself and would also allow taking managerial decisions regarding the future of the company.
If you are planning to get your business audited, you need to follow specific rules and regulations as stipulated by the government of UAE.
Audit Requirements
- The audit of the books is compulsory for most of the business entities in the free zones whereas the branches of local or foreign businesses may not require a check in most of the free zones.
- All the financial books and documents of the business must be in maintained in an orderly fashion.
- The UAE Commercial Companies Law requires the businesses to maintain their financial records for a minimum period of five years and also states that the audit of the mainland companies is compulsory.
- Some free zones do not require the submission of the audited documents however the preparation of the audit document is necessary.
- After the completion of the financial period, all companies have three to six months to complete the audit report and submit it.
The audit process has numerous advantages for the business and should be conducted yearly by a reputed third party. We at JAXA provide a wide variety of audit and assurance services. Our highly qualified and experienced staffs offer the most significant level of professionalism in all areas of Auditing, Accountancy, Business Advice and Financial Planning. For details regarding our services contact us, we would be happy to help.
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