Auditing is an objective evaluation of the financial reports and reporting process of an organization. The primary focus of the financial audit is to provide assurance to the investors that the financial statements are accurate. The auditing of your company is a positive process. It will help to enhance the confidence of other people on your company.
Some people see auditing as a negative thing but it is the way to strengthen your company’s financial system. The annual audit is just a process of verification for the financial statements. The auditor will look for the accuracy of the numbers and processes so that you may know that what steps you need to take to protect your company from fraud. This process will help your company in forming an effective management in the future.
Being prepared for audit is important:
If you are prepared before the start of the auditing process, it will give the auditor a nice impression that you have all the information about the processes of your company. It will increase the value of your organization. With the help of auditor, you will be able to create new strategies and following them will improve the efficiency and minimize error. As the audit process is long, your cooperation will help the auditors to complete it in less time.
Information an auditor will need:
The audit process is based on the opinion of an auditor on the financial statements of a company. Most of the details an auditor will need is the general information which should be maintained by a company. The auditor will objectively evaluate evidence about the basic financial statement present in the form of numbers. The areas which will be addressed by him are:
- Existence or occurrence
- Rights and obligations
- Presentation and disclosure
- Valuation and allocation
The auditor will also ask you about the differences in the values over the year. The company should be prepared for the types of questions which will contain the information about the current results and the expectations. Other changes which can be asked by an auditor include the following:
- Operations, raw materials and distribution
- Governance, management and ownership
- Technology, personnel and union relations
- Impact of economic development on the operations of a country
Demands for financial audit in UAE:
The audit of the financial statement for a company is important in Dubai in the following situations:
- You will need audited financial statements whenever you apply for the renewal of license.
- If you want to have certain bank facilities.
- When dealing with suppliers, they will need the report to assess your financial credibility.
- It is a legal requirement.
- The audited financial statements are considered to be the major evidence in the lawsuits and legal disputes.
- They are helpful for the business owners in checking the reliability of the company’s financial condition.
- This process will ensure the best account management and internal control practices.