Auditing in UAE
Auditing in UAE is defined as a systematic and independent examination of data, statements, records, operations and performances (financial or otherwise) of an enterprise for a stated purpose. In any auditing the auditor perceives and recognizes the propositions before him for examination, collects evidence, evaluates the same and on this basis formulates his judgment which is communicated through his audit report. Traditionally auditing can be understood as an examination of accounting records undertaken with a view to establishing whether they completely reflect the transactions correctly for the related purpose.
Importance of conducting an audit for the Business
Financial audits are performed to ascertain the validity and reliability of information, as well as to provide an assessment of a system’s internal control. The goal of an audit is to express an opinion of the person / organization / system (etc.) in question, under evaluation based on the work done. Auditing in UAE seeks to provide only reasonable assurance that the statements are free from material error. In the case of financial audits, a set of financial statements are said to be true and fair when they are free of material misstatements. Auditing is also useful for business for getting business loans. The reputation of borrowers increases through auditing. Thus auditing of accounts helps the businessman to expand his activities.
Types of Audit
Financial Audits: Reviews accounting and financial transactions to determine if commitments, authorization, receipt, and disbursement of funds are properly and accurately recorded and reported
Determines if there are sufficient controls over cash and other assets and if adequate process controls exist for the acquisition and use of resources
Operational Audit: Examines an operating process to determine if resources are being used in the most efficient and effective way to meet the unit’s mission and objectives.
Internal control reviews are a major portion of an operational audit
Activities such as cash handling, procurement, equipment inventories, and human resources services are generally subject to this type of audit.
Auditing in UAE is the close examination of the financial report of an organization, as presented in the annual report by someone independent of that organization. The financial report includes a balance sheet, an income statement, a statement of changes in equity, a cash flow statement, and notes comprising a summary of significant accounting policies and other explanatory notes. Emirates Chartered Accountants Group is a well known audit firm in UAE head quartered at Dubai. For enquiries contact us through firstname.lastname@example.org