Stages of external Audit Process | Internal audit & External audit | Financial statement
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Stages of external Audit Process

An external audit occurs focuses on a company’s performance and compliance. All the records related to the audit examined in an external audit to make sure no errors exist in the financial statement. Which is important for investors and regulatory requirements. External auditors have no affiliation with a company being audited, which offers the business an unbiased audit. An external auditor in UAE passes through some key formalized phases when they are auditing financial statements for clients. why an external audit is important?

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Preparing an Audit plan

The first stage of an external audit involves the auditor looking over the information contained in the documents and plans out how the audit will be conducted. A workshop may conducted to identify possible problems in future. An audit plan then drafted. Auditors from top auditing firms in Dubai also need to identify the key areas of inquiry, concern and the specific information they wish to examine in order to analyze those areas.

Find out more info: 5 Tips for Preparing for an External Audit

Obtaining an Understanding of the Client

Auditors in Dubai, UAE must attain a sufficient background of a company to assess the risk of material misstatement on financial statements and to design the nature, timing, and extent of further audit procedures. The risk assessment procedures used here which may include inquiries of management and others within the entity, analytical procedures, observation and inspection, and other procedures.

Obtain an understanding of internal control is an essential part of this stage. As it allows the auditor to identify areas that may misstated. And to design other procedures based on characteristics of the existing system.

Assessing the risk of Misstatement.

Auditors in UAE use the information collected while obtaining their understanding of the client. And its environment to identify classes of transactions account balances, and disclosures that might be materially misstated. however, risk assessment provides auditors evidence on potential risks of material misstatement.  The risks of material misstatement composed of inherent and control risks for relevant assertions. Inherent risk is the susceptibility of a relevant assertion to material misstatement, assuming that there are no related controls.

read more : Difference Between Internal Audit and External Audit

Performing tests of Controls

Performing Tests of controls are to determine whether key controls properly designed and operating effectively.

Consider the control activity in which the accounting department accounts for the serial sequence of all shipping documents before preparing the related journal entries.  The importance of this control is to ensure that each shipment of merchandise recorded in the accounting records.

Completing the Audit

Also, the audit finalized and some procedures re-performed to ensure validity. At this point, final decisions made relating to the financial statement disclosures. The auditor will hold meetings with senior management to discuss the findings.

Audit Report

A standard unqualified audit report is issued when examination and the results thereof are satisfactory. This report is also modified as the audit examination deviates from normal.

Find out more:  What is the Difference Between a Qualified and Unqualified Audit Report?

Audit services in Dubai

There are several certified auditors in Dubai and the rest of UAE but for an effective audit, the system you need to hire seasoned intelligent auditors to track the financial status of your company. Farahat and Co have years of experience in providing auditing services in UAE. We have extensive knowledge that helps clients conduct an external audit.

An audit firm in Dubai, Sharjah, Abu Dhabi UAE with certified auditors in Dubai, we provide results-oriented services to our clients. If you are searching for expert auditing firms in UAE, you may contact us for further consultation.

Jose’s entire educational and professional career has circled around audit and assurance. While in India, he became a CPA and worked as an accountant and an auditor. Afterwards, he relocated to Dubai, where he joined Farahat & Co. as an auditor. He is currently assisting UAE mainland and free zone businesses with their compliance needs. With a reputation for proficiency, quality, and reliability, clients refer to Mr. Jose for independent assessments of organizations structures and operations. Read more