This article is to inform the business owners as well as the aspiring ones to know how important auditing to business is.
Auditing is a means of evaluating the inefficiency of a company’s internal controls. Retaining an effective system of internal controls is vital for The Company’s aim, gaining trustworthy financial reporting on its operations, precluding fraud and misuse of its assets, and lessening its cost of capital.[h3_heading]Why do we need an auditor?[/h3_heading]
An effective auditing system is a vital for any company because it facilitates to pursue and attain its several corporate purposes. Corporate process needs several forms of internal control to simplify supervision and observing, prevent and identify irregular transaction, measure the corporate performance, maintain adequate business records and to promote productivity. The Auditors review the design of interior controls and informally propose improvements, and all documents and irregularities to enable further investigation by management if there is to be found.[h3_heading]Misstatement[/h3_heading]
Auditors will assess the risk of material misstatement in a company’s financial reports. Without a system for internal controls or an auditing system, a company is incapable to create reliable financial reports for interior or external purposes. And it would not be able to define how to allocate its resources and would be unable to know which of its divisions or product lines are profitable and which are not. To sum it, they could not manage its undertakings, as it would not have the ability to tell the status of its assets and liabilities and would be rendered untrustworthy in the marketplace due to its inability to consistently produce its goods and services in a reliable manner. Hence, an auditing system is crucial in preventing debilitating misstatements in a company’s records and reports.
Audit firms in dubai serves an important role for companies in fraud prevention. Frequent analysis of a company’s operations and preserving rigorous systems of internal controls can prevent and detect countless forms of fraud and other accounting irregularities. Audit professionals, like Farahat & Co. can assist in the design and modification of internal control systems with the purpose of which includes, between other things, fraud prevention. One of the important parts of anticipation can be deterrence, and if a business is known to have an active and diligent auditing system in place, by repute alone it may prevent an employee or vendor from attempting a scheme to defraud the company.