Auditors in UAE – Internal Checking
Internal check is a system of accounts carried out in organizations under which the work of one person is automatically checked by auditors, for emiratesca we have top auditors in uae to prevent and detect the errors and frauds. Under such a system, it is not possible to commit errors & frauds without the collusion between two or more people. It is a process included in the Internal Control System for assuring the achievement of an organization’s objectives in operational effectiveness and efficiency.
Objectives of Internal Check:
- Minimizing the possibility of error, fraud and irregularity
- Enhancing the clerical efficiency in the organization
- Exercising moral influence over the employees
- Ensuring the accurate recording of all business transactions
- Preventing misappropriation of cash and goods
Advantages of Internal Check:
- Minimization of errors and frauds
- Early detection of errors and frauds
- Increased profitability
- Proper division of work
- Good Internal control over cash and other day to day transactions
- Efficient and economical business operations
- Convenience to auditors
Characteristics of Good Internal Check:
- Division of work – No single person should have independent control over all important aspects of the business
- Job Rotation – The duties among the staff of the business should be changed from time to time so that no staff should be engaged in a particular job for a long time.
- Authority Levels – The financial and administrative power should be assigned very judiciously to different officers.
- Separation of Custody and Recording Person having physical custody of asset must not be permitted to have an access to the books of accounts.
Responsibility of Auditors in Internal Check:
- The auditor should satisfy himself about the working of proper internal control system. He should examine carefully the system of internal check before deciding his scope of work.
- If the auditor is satisfied about the effectiveness of internal control then he should check the efficiency and its existence by checking various items from different areas.
- If the auditor feels that internal control system is not satisfactory then he should check those accounts where errors are likely to exist. If the internal control system cannot satisfy the auditor then he should report the client in writing.
- If the auditor feels that overall system is satisfactory except some areas of certain sections of the system appear to be inadequate, then the client should be made aware of the hidden risk.
- Auditor should also give suggestions to overcome the weakness.
Internal check is a continuous process and is an essential part of the day-to-day business routine. It relates to all the transactions that take place every day. Internal check is achieved by complementary allocation of duties and by independent verification of the work of one person by another.