External Audit in Dubai
External Audit Services
An external audit is the independent examination of financial records conducted routinely to maintain accuracy and transparency. It enhances the financial statements comply with the standards. The external audit is organised to see the precision of the statements and the financial position of the company. When it comes to external audit in Dubai, an outside auditor, who is an expert and independent third party who performs a dispassionate review of the financial records of a company. The auditor looks into the financial investments to identify any irregularities. External auditing points on the financial standing of the business organisation in this competitive market. External auditors review their work unbiasedly and present reports with high accuracy. The external audit ensures the completeness and accuracy of the accounting records within the accounting framework eradicating errors, frauds and misstatements. Wise Consultancy offers seamless external audit services in Dubai and across the UAE to help both the private companies and government to check accounting documents.
External Audit Procedures
External auditing procedure involves various steps right from appointing an auditor to submitting the reports. Given below are the following stages covered in external audit in Dubai.
Auditor appointment:
An independent auditor with chartered certification is appointed for external audit. Hiring someone who is an outsider to the organisation is advisable. Shareholders of the company select the auditor based on skills, qualification and experience at annual general meetings under their power.
Engagement letter acceptance:
The auditor confirms through the letter regarding their acceptance of the appointment. The scope of work and responsibilities are mentioned clearly.
Audit program:
At this phase, the auditor will collect, assess, and interpret data for better understanding. Auditor identifies and assesses risk, suggests measures. It includes:
- Collect details of the company and its manoeuvres
- Decide whether the company is honestly following the International Financial Reporting Standards (IFRS), according to the Financial Accounting Foundation
- Thorough examination of the validity of the company’s financial records
- Careful examination of the company’s accounting books, payroll, purchasing records
- Scrutinise the records for financial misstatements due to mistake, deception, or misappropriation
Collection of evidence:
Gathering the evidence to enhance the materiality and confirming compliance with accounting policies, standards, and verifying assets.
Report Submission:
Auditor submits the audit report to the management after thorough examinations and suggests qualified opinion on the organisation’s future.
Documents Required For External Audit
To prepare an accurate and independent audit report, the External Auditor requires the following documents in general: –
Details of the fixed assets purchased
This includes invoices and receipts. It helps the auditor prepare an exact balance sheet and other essential financial documents.
Details of bank accounts
External Auditors require the bank transaction details of the company. It should be under the name of the company.
Details of payroll reports
Details of the payroll reports help the auditors understand the tax liabilities, expenses and salaries in the company.
Details of company’s loans
These documents will help the auditor to make the exposure of payments precisely.
The ledger and trial balance
The External Auditors require the general ledger and trial balance in the preliminary phase of the auditing to inspect the debit and credit balances.
Why Do Organisations Hire External Auditors in Dubai?
External audit is necessary for all the companies registered in the UAE. It is a significant document as it is processed as per the Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS). It can be used as an important financial document when you want to renew your license or for getting a loan, etc. In the light of new VAT implementation in the UAE, External Audit Report gives more credibility in the financial report of every company. As an independent audit report, it helps the investors or third parties to the business in knowing if there is any fraud or misstatements made in the in-house financial statements. By conducting an external audit in Dubai, you can enhance the credibility of your business financial records. Major reasons to hire external auditors in Dubai are:
- Unbiased valuation of the company’s financial position.
- Precise data needed by the company in evaluating their profit or loss.
- Give businesses the assurance and guarantee that their information and the way they conduct business are authentic.
- Reduce the risks caused by indecorous financial data
Frequently Asked Questions on External Audit in Dubai
How do internal and external auditors differ and relate?
Internal and external auditors are independent of the activities they audit in an organisation. Internal auditors provide monitoring and assessment of all activities within the organisation. On the contrary, the external auditors are independent of the organization, and they provide an audit opinion on the financial statements to the business. A well coordination of optimal effectiveness and efficiency is to be maintained in their work.
What are the responsibilities of external auditors?
External Auditors responsibilities include (1) inspecting financial statements to find errors, misstatements and fraud, (2) performing audits on systems, operations and accounts, (3) reporting audit findings and recommending improvements.
How is the working of external auditing firms within the UAE?
The External Audit is conducted through the following procedures (1) review the corporate accounts and statements and Prepare an Auditor’s report with an Auditor’s opinion formed, (2) the approved auditor makes sure that the annual financial reports prepared by are accurate and are free from any deceit or error, (3) they emphasise that the accounts are prepared consistent with the International Financial Reporting Standards.
