- Home
- Our Services
ACCOUNTING & CFO SERVICES
BANKING SERVICES
COMPANY SETUP
- About Us
- Blog
- Contact Us
Get Consultation
+971 56 304 6464
An external audit is an extensive review of the financial statements. It is conducted from outside the business by a third party, hence the name. This process is carried out to ensure transparency among businesses and compliance with the regulations.
+971 56 304 6464
There are many reasons why a business may need to conduct external audits. Here are some of the reasons why there is a need for external audits:
Audits promote transparency in the organization. They also provide clear indicators to stakeholders about the financial situation of the business.
They are carried out to ensure that the business is compliant with the regulations of the region it is operating. Financial authorities may require external audits if any discrepancy is found in your financial reports.
Cross-check data provided by the business; audits are an effective tool. Since external audits are carried out by third-party auditors, they are used to check the accuracy of the data. They also prove whether the company’s financial reports are reliable or not.
Audits are also commonly used to check for fraudulent activity. Discrepancy in the data can hint at such activities which can be checked through further scrutiny.
Audits can be categorized based on scopes, objectives, and legal requirements. In general, you can find the following types of external audits:
Compliance audits are conducted to check whether a business is compliant with external laws and regulations. They are very critical and can take up a lot of time. However, they help avoid penalties by identifying areas of non-compliance. Some of the industries that may be critically analyzed during the process are healthcare, finance, etc.
These audits are more focused on analyzing the financial reports of the business. By carrying out a detailed examination, auditors can detect fraudulent activities if any are present. Forensic audits aim to uncover any financial irregularities in the business.
Statutory audits are mandatory in the UAE and are governed by the UAE Commercial Companies Law and Federal Law No. 2 of 2015 on Commercial Companies. Aimed to validate the accuracy of financial records, they also check whether the business complies with applicable accounting standards.
Operational audits are for assessing the efficiency of an organization’s operations. They help businesses identify potential areas of cost saving and improve efficiency.
The process of the external audit may vary depending on the auditing company. There are many auditing companies in Dubai, each having its own set of protocols. However, the general steps to the auditing process remain the same. They are as follows:
In the initial step, the auditor understands the business and assesses the related risks. This helps in determining the scope of the audit along with the right strategy.
The auditor then examines financial records by performing on-site reviews. This may include but may not be limited to testing internal controls, gathering evidence, etc.
By implementing standard auditing procedures, the auditor tests the accuracy of the financial records. They also go through transactions and balances and gather evidence for each required parameter.
After gathering all the data, the recorded findings are then evaluated for any discrepancies. This also helps them to assess the discrepancies and their impact on financial statements.
Finally, an audit report is generated giving a final opinion on all the financial records. It also checks whether the business is following the International Financial Reporting Standards (IFRS).
There are many benefits to getting your business externally audited. FINCHOICE Solutions recommends getting audited before every tax period. Some of the key benefits of external audits are:
By conducting an external audit, you can identify problems with finances as well as operations. This is crucial as it allows you to take necessary actions in advance by following a proactive approach.
Identify any discrepancies within your financial records in advance that can be flagged for fraudulent activities. By improving such problems, you can potentially save your business from a lot of financial penalties by the financial authorities in the UAE. Being investigated for such activities can also bring your business in a bad light, which can be quite damaging. Thus, getting an external audit in advance can prove to be highly beneficial.
Avoiding penalties is important for every business. However, non-compliance with regulations can lead to heavy fines. Thus, it is important to get audited before every tax period.
External audits also provide insights that can help improve the internal infrastructure for operational management. In theory, this can drastically improve the performance of your business.
FINCHOICE Solutions has been in the business for the past 30 years. We have helped hundreds of businesses with their financial issues. Over the past 3 decades, we have formed highly effective methods that are proven to work. We offer a one-stop solution model, where our professionals can take over all your financial problems. Allow us to conduct audits to unmask any discrepancies in your business.
Our chartered accountants can then help rectify those problems with success. We also provide best-in-class consultation services. You can get in touch with professionals to get assistance for your financial issues and receive tailored solutions. FINCHOICE Solutions is committed to providing great customer service along with excellent services. Join hands with FINCHOICE Solutions today for a better tomorrow.
Accounting Professional Corporation we envision to provide quality Accounting and Taxation Services to our client
Copyright © 2024. All rights reserved.
