Audits are a crucial aspect of a company’s operations. Companies and organizations conduct frequent audits to check the overall performance of their operations. Things are no different in the UAE. A regular and unbiased audit is an essential requirement for all companies in the UAE. For this purpose, organizations seek the help of auditors in the UAE to conduct the process fairly and efficiently.
What is an Audit
The audit is an integral part of a business’s functionality. An audit is the examination or assessment of different books of accounts by an evaluator, taken after by physical checking of stock to create beyond any doubt that all offices are taking after the reported framework of recording exchanges. It is done to find out the exactness of budgetary explanations given by the association.
Purpose of an Audit
The prime reason for the review is to opinion on the data within the financial report taken as an entire and not to recognize all possible inconsistencies. This implies that even though evaluators are on the lookout for signs of potential fabric extortion, it isn’t conceivable to be sure that fakes will be distinguished.
How Auditors in the UAE Plan an Audit
There are several processes involved in the auditing process. However, there are some prerequisites to the process itself. Audits are based on the information of the client’s business. The evaluator arranges his work to conduct the review successfully and proficiently. They respect the client’s bookkeeping framework, approaches, and inner control methods. The degree to which the inside control framework may depend is also vital. Assurance of review strategies makes difference coordination of work. The review arrangement changes as and when essential. Auditors in the UAE keep the following factors in mind before planning an audit:
- The estimate of the company and complexity of its operations
- The environment in which the company operates
- Past involvement with the client; and 4. Information of client’s trade.
Audit Planning
Auditors in the UAE plan a successful audit in the following steps:
Step 1: Reaching an Agreement with Company/Organization
The first step is taking the authorities into confidence. Auditors in the UAE discuss all aspects of the audit with their clients. They discuss the nature of the audit: whether it is an internal audit, external, or forensic audit. They decide a date of initiation, tentative duration, and expected end date of the audit.
Step 2: Issuing an Official Audit Engagement Letter
The auditors issue an official letter to the company or business to make the process more transparent and neutral. This letter explicitly explains the audit duration, the terms, and the type of audit being conducted. The letter also identifies whether the audit conducted is a complete business audit or just a section of the scope of work is being audited. Some points of the engagement letter are:
- Objective of review of financial information.
- Provision of budgetary data by the management.
- Applicable enactment, controls, or professions of proficient bodies to which the inspector follows to
- Access to data sources and records
The evaluator at his tact may incorporate the following.
- arrangements for arranging of the audit.
- Written affirmation by the administration for representations made in connection to audit.
- request from the client for recognizing receipt of an engagement letter.
- description approximately the reports he anticipates to issue to the client.
- fee computation and charging arrangements.
- a reference to any encourage assertion between the reviewer and the client.
- involvement of other reviewers, specialists, inside reviewers, and other client staff in a few review angles.
Step 3: Acquiring Knowledge of Business
As examined in contemplations in review arranging, a client’s trade can be well caught on from
- Reports of the Shareholders
- Minutes of the meetings
- Inside reports such as budgets, etc.
- Papers of any previous audits
- Non-audit administrations personnel
- Discussion with client
- Manual of Company arrangement and strategies
- Publications relating to companies
- State of the economy and its impact on client
- Visits to clients’ premises and facilities
Step 4: Analysis of the Employed Accounting System
In this process, the auditors in the UAE do a thorough study of the current accounting system that the company uses. For this purpose, the auditors demand previous books of accounts and details of employees who maintain and update that record.
Step 5: Gathering Staff Information
The auditors in the UAE collect a list of central authorities of the company, alongside the particulars of work allowed, the scope of their specialist, and their example marks. The auditor may go through the association chart and manuals portraying the association. Memorandum of Association (MOA) or articles of association may be considered for an improved, more robust understanding of the company undertakings.
Step 6: Gathering Technical Information
If the client’s commerce is of a specialized nature, the auditor familiarizes himself with vital technological subtle elements of that commerce. They visit the working environment and obtain technical information to conduct the review productively.
Step 7: Information for Clients and Instructions to Them
The auditors obtain data on the nature of commerce, association, and staff, books of accounts, records, etc. After knowing the client, the auditors teach the client to keep all the money-related records and other articulations prepared for review. The enlightening to the client will be on the taking after lines:
- The last accounts (exchanging and benefit and misfortune account) and the adjust sheet should be prepared for an audit.
- The cash book and bank passbook ought to be up to date.
- Ledger postings ought to be total and adequately balanced.
- The vouchers ought to be orchestrated serially.
- Trial adjustment ought to be kept ready.
- Statement and plans concerning monetary things ought to be prepared.
- Views of awful and dicey debts.
- Schedule of indebted individuals and creditors.
- Investments explanation at fetched cost and showcase values.
- View of excellent salary and expenses.
- Account of paid ahead of time expenses.
- Stock sheets appear the esteem closing stock beside the inventory valuation strategy.
- Statement of capital expenditure
- List of conceded income consumption.
Conclusion
Audits are an essential process for businesses. There are many processes involved in the primary function, but there are several other processes that auditors in the UAE conduct before beginning an audit. In the entire process, having a reliable auditor is very important. BS Auditing of Accounts has a team of expert auditors proficient at audits of all types and levels.
Feel free to contact us:
• Office # 0641, Tamani Arts Offices, Business Bay, P.O. Box 111390, Dubai, UAE
• +971 4 570 7357
• +971 58 108 5690
