Since there are no corporate or income tax UAE businessmen often raise the question is audit important? Well answer to that question is “Yes, an audit is important”.
1. Locating Errors: Audit helps businesses by finding out the errors. Since the objective of accounting is to give a true representative of the financial information these can be achieved only by Audit.
2. Unearthing Fraud: The frauds by the guilty can be brought to light through a good audit.
3. Aids in raising finance: The banks and other financial institutions give funds only to those companies that have good finances which are audited by a reputed audit firm.
4. License Renewal: The audit is mandatory for the renewal of the license in most of the free zones in the UAE.
5. Fulfilling legal requirements: As per the Memorandum of Association of most of the company in the region it is compulsory to perform an audit on the books of accounts.
6. Settling Claims: Settling claims on the event of unforeseen happenings like fire, lawsuit, etc the audit report very much relies on. Hence audit acts as a form of insurance to help you receive the claim.
7. Morality Boost: The morals of the management and staff are strengthened by an audit by ensuring honesty is followed in the organization.
8. Aids in Planning: The audit gives the advantage of helping in planning because when reliable financial data is available to further analysis is possible.
9. Better Internal Control: The audit improves the importance of efficient internal control within the organization thus boosting the efficiency of the firm.
10. Investing Decisions: The investing decisions can be taken appropriately with the help of a good audit. When the figures are accurate that gives confidence for the investors to see the progress and make wiser investment decisions.
The audit is very important in the modern-day since investors have still not forgotten Enron, Satyam, etc. The audit helps to bring the trust in investors and thus the business can grow even to greater heights.