Personal Financial Statements Auditing Checklist in UAE
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nancial Statements Auditing

A Comprehensive Guide to Personal Financial Statements Auditing

Auditing is an integral part of financial accounting. In Dubai, the business atmosphere today is more challenging and competitive than ever, with the amount of available capital at all-time highs.

Every day brings more competitors, so it’s not surprising that many small firms fail within the first year. Audit firms in Dubai add value to the business by giving pertinent data that raise the quality and reliability of financial accounts.

Audits of all kinds, including tax audits, financial audits, inventory audits, and operational audits, may be carried out.

Income statements, balance sheets, cash flow financial statements, and audit opinion letters are among the sorts of statements that are audited.

The task of preparing the company’s financial statements and any related disclosures falls under the purview of the management of the business.

Importance of Financial Statement Audits

Every company is required to maintain financial statements, and since every employee has access to the audit report, understanding the functions of financial accounting and audit principles is crucial for both HR employees and astute investors.

The amount of cash a corporation has is reported by a financial statement audit. This affects its capacity to fulfill other responsibilities, including paying suppliers and staff. It shows cash transaction activities to provide a summary of the overall liquidity of a company.

Forbes reports that say 351 executives from C-suites, finance committees, shareholders, and boards across nine countries in April/May 2020. A key finding of the survey is that an audit report is an important component of the financial reporting ecosystem, which extends to management, panels, and those responsible for governance, as well as regulators, auditors, standard-setters, and investors.

31% of respondents agree, 62% strongly agree, and 5% slightly agree that an audit of a company’s financial statements enables them to take confidence in its financial statements to some extent. 95% of respondents surveyed agreed that a financial statement audit should offer benefits beyond merely delivering an independent auditor’s report on the historical financial data.

According to these conclusions, a financial statement audit should not only certify financial statements in the past but also provide information about topics of greater public interest.

Read More : Why Financial Audit is Important for your Business?

Who Has the Right to Demand Audited Financial Statements?

Government Authorities

If your company is a relevant entity, attested financial statements are advised under the heightened compliance for ESR. Your licensing authority could also ask them if you want to renew your trade license.

Investors

Audits are frequently necessary for investors to perform any kind of due diligence. Before making any capital investment, an investor’s trust will grow due to the credibility of the accounts indicating financial performance.

Management

External audits offer a professional evaluation of the correctness of financial reporting that has been created internally. They should also point up weaknesses or dangers in procedures and safeguards.

Banks

In order to assess a lender’s creditworthiness and assure that the business can continue making timely debt payments, banks will demand audited financial statements.

Stages of Conducting Financial Statements Audit in Dubai

The steps to take when performing a financial statements audit in Dubai are as follows:

  • Planning and Risk Evaluation

The auditor needs to be aware of the company’s operations as well as the surrounding market. Additionally, he uses his expertise in the sector to assess any risks that can compromise the accuracy of the financial statement.

  • Internal Controls Testing

The auditor evaluates the efficiency of the business’s internal control practices. They emphasize the boundaries of employee authority, the safeguarding and maintenance of assets, and the division of roles.

  • Investigation Techniques

Auditors employ investigative techniques to confirm the legitimacy and precision of the financial data of the company.

Step 1: Planning Your Audit

It is not difficult to plan your personal financial statement audit. To reduce delays and qualifications to the final audit report, preparation is essential. The auditor will try to adhere to the top-level procedure:

Step 2: Appointment

To be able to obtain information from other organizations on your behalf, the auditor must be officially appointed and have the necessary paperwork completed.

Step 3: Compliance

To confirm the legitimacy of the company under audit, copies of the business license, proof of legal incorporation, shareholding, structure, and other papers will be required.

Step 4: Financial Statements

For the financial year that is being audited, internally produced financial statements must be presented.

Step 5: Transactional Checks

There will be several audit checks carried out. To confirm the validity of the sample transactions under scrutiny, the auditor will ask for paperwork and proof.

Wrapping Things Up

Your reputation could be harmed if audit reports are hurried or the necessary paperwork is not delivered. Working with companies with a solid reputation and relevant experience is crucial.

Read More : Financial Audit Procedures for Small Organizations.

Ervee is a CPA with international experience in Tax and Accounting. He has over 12 years of experience in accounting and bookkeeping and over a year in VAT implementation, registration, and accounting in UAE. He regularly drives out inefficiencies in company operations and loves the challenge of helping clients find additional ways for an easier and improved compliance and verification of transactions. Read more