The UAE Is Increasingly Focusing On Professional Audit Services
An audit determines whether an entity presents a true and fair view of its financial statements and position. The year-end audit service in the UAE is very important for decision-making within the company. It can provide assurance on the accuracy of accounting records or reveal errors that occur regularly.
The Ministry of Economic Affairs (MEEA) has announced that it is mandatory for all licensed companies to engage an auditor. The audit service carries out procedures to determine whether the financial statements are free from error and fraud.
What Is The Purpose Of The Audit Service?
- Assessing corporate governance
- Checking account balances and transactions
- Investigating and verifying the authenticity of the accounts
- To examine how the company operates and discloses its earnings and to look for any evidence of manipulation or fraud
The service may also include recommendations on how to improve the quality of financial reporting and put in place controls that will help the organization to operate more quickly and efficiently once the audit is complete.
Under the Companies Act, all mainland companies are required to have their financial statements audited. These companies are required to keep financial records for at least five years.
Companies operating in free zones are required to be audited. Companies must submit an audit report to the free zone authorities. These include free zone companies (FZCOs) and free zone companies. Although the free zone authorities do not oblige specific companies to prepare an audit report, they cannot ignore the fact that the company itself must prepare an audit report.
Problems Are Identified
It will be easier for management to understand the financial position of the company and to anticipate all the possible outcomes that the company may face if audit services are used.
Business Demand
Many SMEs do not have access to comprehensive audit services. In order to obtain accurate and reliable financial information about the company, the administration should have the company audited by a third party.
The Needs Of Borrowers And Vendors
Both lenders and sellers want audited financial statements of the company in order to understand the current situation of the company and to take appropriate actions.
Different Types Of Audit
External Audit
External audits improve internal standards by allowing them to identify weaknesses in accounting systems and make recommendations.
External audit acts as a strong pillar to ensure that your records are free from material errors or omissions, thus ensuring that you will be successful in the long run.
Internal Audit
The internal audit identifies errors before the external audit. Thus, it is likely that by the time the external audit is carried out, management will have corrected these errors.
Internal audit helps to analyze many aspects of the company correctly. In each situation where problems arise, the internal auditor can use appropriate techniques to identify what is not really being done properly.
Conclusion
We are all aware of the need to audit a company in this rapidly
