A company's management is vitally important. A business can use many tools and techniques to achieve this. Auditing the company regularly is one such method. Auditing your company is a mandatory requirement in many jurisdictions, including the United Arab Emirates. Even if the audit is not mandatory, management must do it. This will enable the management to understand the current shortcomings of the business and give them a glimpse into the future.
The management can perform many types of audits to determine the current state of the company.
Read More : Advantages of Outsourcing Internal Audit in Dubai.
What are the Different Types of Audits?
Types of audits include Internal Audit, External Audit, Tax Audit, Sales Audit, Forensic Audit, Operational Audit, Compliance audit, Information system audit, Payroll audit, and Pay audit.
Internal Audit
An internal audit is a type that aims to assess the current state of a business's internal operations and resources. This audit helps to identify bottlenecks and determine how resources can be better used for the business. A team of auditors or an auditor who is part of the company usually conducts an internal audit. This gives the auditor all information about the company.
A business with little money can opt for an internal audit. However, an internal audit can still be biased and may even be influenced to provide a false report by other members of the company.
External Audit
For organizations that want independent answers, an external audit is a great option. External audits should only be undertaken by organizations that have financial backing and can afford it. An external audit is less likely to be biased because the auditor is independent and has no ties to the organizations. This decreases the chance of the auditor favoring or being biased against the organization.
This audit provides information from a third-person perspective about the current condition of the company. This type of audit will provide an in-depth view of the company's market perception and information on how it can compete with its competitors.
Tax Audit
Businesses should consider taxation. According to the Tax Procedure law, the Federal Tax Authority can inspect all records and documents of any tax-exempt entity within the United Arab Emirates. The FTA must ensure that the entity complies with all applicable rules and regulations. Businesses must ensure compliance with all rules and regulations in order to avoid penalties. External third parties can also be used to assist companies in tax management.
Sales Audit
All businesses that operate in malls must provide all necessary information to the auditors. These businesses can only provide the required business data to an approved auditor if they are located in a non-regulated area. These retail businesses must also provide the statement on Gross Turnover for the financial year to auditor.
Forensic Audit
A business can conduct a forensic audit, also known as fraud investigation, to identify and track transactions. This audit can be used to help a company file a police investigation. The audit will help management identify and address operational bottlenecks within the company.
Operational Audit
Operational audits can be compared to internal audits. An operational audit examines the goals, planning, processes, procedures, as well as operation results of your company. Operational audits are generally conducted internally. An operational audit may be conducted externally. An operational audit is designed to evaluate the operations of your business and identify ways to improve them.
Compliance audit
Compliance audits examine your business's policies, procedures and practices to determine if they are in compliance with external or internal standards. Compliance audits are a way to determine if your company is in compliance with worker's compensation and shareholder distributions. They can also help you determine whether your business is in compliance with IRS regulations.
Information system audit
Information system audits are most relevant to software and IT companies. Information system audits are used by business owners to identify issues related to software development, data processing and computer systems.
This audit makes sure that the system is accurate and users have all information they need. It also ensures that no unauthorized parties have access to your private data. Mini cybersecurity audits should be conducted by IT and non-software companies to make sure their systems are protected from hackers and fraud.
Payroll audit
Payroll audits are performed to verify accuracy of your payroll processes. Payroll audits should consider different factors such as pay rates and wages, tax withholdings, employee information, and tax withholdings. Most payroll audits are internal. Internal payroll audits can help prevent future external audits. To ensure compliance, businesses should annually conduct an internal payroll audit.
Pay audit
Pay audits can help you identify pay discrepancies between your employees. An audit of pay can reveal unequal pay in your company. Pay audits can help you identify disparities due race, religion, gender, and age. You can also use pay audits to ensure that workers are being paid fairly, based on the industry and geographic location of your business.
Why Internal Auditors are Important?
Audits are essential to gain a thorough understanding of the business. Audits can catch problems early before they become big problems. You could find yourself reviewing incorrect information that can have a negative impact on your business.
Companies in the United Arab Emirates are most likely to use the five types of audits mentioned above. A third party can help a business determine which type of audit it needs. The third-party can also conduct the audit on behalf of the business.
You can find such a third party by looking at the service offered by Farahat & Co, the top audit firm in Dubai. Our audit firms in Dubai team well-respected financial firm that is also one of the top internal audit firms in UAE. Our certified internal audit in Dubai teams also offers other services like Accounting Services, Auditing Services, and Tax tax-related services. For more information, please contact us. We are happy to assist you.
Read More : All you need to know about External Audit in Dubai, UAE.
