An external audit firm examines the financial statements of a business to determine if the statements prepared by the company are accurate and prepared in accordance with the International Financial Reporting Standards. An external auditor reviews the financial documents to ensure the business presents a ‘true and fair’ view of their financial standing. Audit firms in Dubai specialize in external audit process that help an organization in preparing their annual financial statements accurately.
Also read: Difference Between Internal Audit and External Audit
Some of the main reasons why businesses in UAE should conduct an external audit:
Compliance with the Regulation in UAE
It is beneficial to appoint an External Auditor to review if the financial statements are compliant with the set standards. An external auditor can identify the items in the books of accounts that are not complying with the governing regulation. It is advantageous to appoint an external auditor as unbiased feedback will help an organization to modify its financial statements in compliance with the rules and regulations. Hiring an external auditor is also beneficial as only appointing an internal auditor may not be sufficient. The internal auditor may find it difficult to provide unbiased feedback to the management and may delay providing such important information.
External auditing prevents fraud
External auditors examine financial reports and bookkeeping records also to inform the management of any suspicious activity or transaction. An external auditor also provides advice and feedback if any of the activities or transactions conducted by the organization can put the business at risk of possible fraud. Auditors in Dubai go through extensive research to determine risks and financial crimes and provides advice on improving risk management in the company.
Credibility
The appointment of an external audit firm will increase the credibility of the business as the financial statements are checked and approved by an external auditor. A successful external audit informs the public, finance companies and government authorities that the business is a reliable organization. The financial reports approved by an external auditor is considered more credible and reliable than that approved by an internal auditor.
External auditors critically examine and provide advice for Improvement
The suggestions and advice provided by an external auditor after thoroughly reviewing the financial reports can improve the financial health of the organization. The auditor can also suggest the expenditure requirements in different areas of the company and offer various strategies to increase the efficiency of the business. An auditing firms in Dubai, Abu Dhabi UAE provides a team of qualified and experienced auditors that can provide an amicable solution to uplift the financial health and status of the company.
Quality Control of the Internal Audit
It is advisable to appoint an external auditor as he can limit any errors made during the preparation of the company’s accounts. Business organizations may assume that an internal audit is sufficient for checking the financial records of the company. However, this assumption is not always true; an internal auditor may have worked for a long period with the organization that results in a biased approach that fails to modify certain errors made in the accounting and bookkeeping records. External auditors seek to restrain such errors while also examining the reports prepared by an internal auditor of the company. The external auditors can also provide advice and suggestions to the internal auditor on improving the financial analysis and examination in the company.
External Audit helps to gain the Shareholders confidence
The shareholders invest money in a company and require information about the financial health and status of the company. A shareholder’s main concern is that his money is securely financed in a profitable venture. By conducting an external audit in the company, it provides the shareholders' transparency of financial stability and whether the organization is a profitable entity.
Long term benefits
By appointing an external auditor for the firm, the company may be entitled to various long-term benefits such as it provides an assurance to the management and the owner/partners that the modified operations and accounting controls will result in a profitable firm. This also ensures to attract more investors to the company and increases the confidence of the public towards your company.
Read More: All you need to know about External Audit in the UAE
Auditing Companies in Dubai
There are various benefits of appointing external auditing firms in Dubai. Farahat & Co seeks to offer a range of services related to auditing that can be beneficial for your company in the short and long term. They have a team of qualified and experienced lawyers that can efficiently conduct the auditing of your company as well as provide suggestions and advice for improvement.
