The nation’s economic and military power is dependent on the maritime industry. The maritime industries include vessels afloat, cargos, passengers, and shore activities that serve ships. Internal auditing services are a fundamental part of marine and shipping companies in Dubai and UAE because they use reports and accounting records to make decisions.
The shipping industry can be broken down into three main categories:
- Tramp Shipping,
- Liner Services, and
- Industrial Carriers.
Each service performs a specific function and is managed accordingly. One of the most distinctive features of UAE marine companies is their ability to operate vessels, despite the existence of accounting and finance practices.
The ship’s voyage is an accounting unit. This means that all freight expenses and passenger revenues are recorded under vessel/voyage. Each voyage is considered a separate venture. The maritime tax system is completely different from those in other industries. Special finance audit techniques are used to implement tax. Budgets and standard costs are the two most important planning and control tools.
Sequence of Accounting
Finance auditing begins chronologically when a business transaction takes place. Accounting data is essential for making timely decisions. The following sources can be used to obtain accounting data: purchase invoices, shipping bills, fuel-filled statements, seaman payroll, vessel repair bills, fuel-filled statements, marine insurance policies, and agency fee memos. These documents are used to prepare vouchers.
These vouchers can be used to record entries in bookkeeping. Each business has its own vouching device to control cash and non-cash transactions. These objectives include the identification and monitoring of a maritime company’s financial position, as well as the measurement of shipping costs. Accounting can be done within the accepted accounting methods. It is essential that the accounting events are presented in the books.
Marine Accounting: General Information
Internal auditing in marine companies involves the following: Voyage accounting is also known as vessel accounting. Marine shipping companies are responsible for this. As a means to transport on water, vessels can be used. It includes: Water Line Operating Revenue & Cost, Subsidies and Other shipping revenues & Credits, Vessels supplies, equipment, and stores ashore.
This inventory account records all supplies, equipment, and stores that are available for delivery to vessels in the future. These payments include fuel, lubricants, supplies, spare parts, and other general appurtenances. Maintenance and repairs are performed on the main and auxiliary engines (machinery), navigational instruments, and facilities of telecommunications.
Why is internal auditing important for companies that deal with marine services?
UAE’s primary income source is the oil industry. There are many tax laws that apply to transportation services between the mainland and the free zone, as well as vice versa. A fiancé audit system is essential to protect the interests of marine companies. This includes record-keeping, frequent analysis and tax compliance.
Read also: 6 Things You Should Prepare for Your Auditor Before an Initial Audit
What Audit Firms in Dubai Can Do For Your Shipping Company
Our audit firm in Dubai boasts the best accountants and auditors to offer high-quality accounting services for UAE marine companies. Our services offer the following benefits:
1. Financial Record maintenance
- Notify the owner of technical supplies and repairs to vessels of any pending invoices.
2. Processing of Vessel Payroll
- Calculation of the salaries of crew members, payment of wages to seamen, preparing reports for customers, administration of ships. Preparation of monthly expense reports.
3. CFO and Controller Services
- Prepare monthly budget vs. actuals reports, management reporting upon request from the owner/manager, and develop accounting policy and reports.
4. Financial Reporting Quarterly and annually
- Management will be required to submit quarterly and annual reports. They may also request a customized report.
5. Revenue Reports
- Provide the income statement report, including vessel-wise report, to management. It is based on direct and indirect expenses. The right proportion.
6. Internal Audit Services
- Ensure proper internal controls, frequent review of accounts, with accuracy and materiality.
7. Profitability and project costing analysis
For determining the total project cost, we consider direct material costs, overhead costs, and direct labor costs. Profitability is a combination of actual and estimated figures.
- Cash Flow Analysis
- Analyze of the cash supply to the vessel
- Verification and payment for crew salaries
- Managers receive statements of accounts
- Foreign exchanges and vessel bank accounts should be maintained
- Reconciliations
- Strategic Tax Planning
Audit Firms in Dubai Portfolio You Can Put Your Trust On
We are a group of financial experts that can provide the right solutions for your business. Our goal is to build lasting relationships with clients and provide high-quality service. As part of an internal audit, we ensure that marine companies have proper internal control procedures. To ensure smooth operation, we set up a database management program to keep all records.
So, are you ready to streamline auditing operations in your shipping company? Farahat & Co is your one-stop solution for the leading auditing companies in Dubai. Visit the top audit firm in Dubai now to learn more about our audit services.
