External Audit Services in Dubai
Farahat and Co Auditors provide external audit services in Dubai and other Emirates of the UAE. As the name suggests, an external audit is an independently conducted statutory audit examining the firm’s financials.
Read more about an External Audit in Dubai.
UAE has a statutory requirement for legally registered companies to conduct an audit of the financial reporting process, such as the financial statements, to determine its accuracy and integrity. An external auditor is required to report any misstatement or error through fair representation and transparent communication to the company. The audit cannot be conducted by a company related to the parent company or has any vested interests in it. It is where the scope of external audit gets generated. An external Audit is an independently conducted audit by an authorized audit services company like Farahat and Co.
What is the Scope of an External Audit Firms in Dubai?
The primary scope of an external audit is to identify any misstatement in the financial statements prepared by a company’s accounting department. Farahat and Co always appoint a qualified and experienced CPA to conduct an external audit. Our auditors confidently communicate the accuracy and completeness of the company’s financial reporting and internal controls process. In turn, it helps the management, owner and investors to make better decisions for the benefit of their company’s growth strategies,
Once the gap in the financial reporting is investigated and identified, the external audit proceeds to the next step of providing an audit plan to determine the cause and prepare an internal control design for avoiding any future occurrence of such errors in the financial reporting.
Understanding the external audit process in UAE
#1. The decision to audit
A company’s key decision-makers confirm for an audit to be executed. Farahat and Co have always encouraged consultation with its clients before the external audit process begins. It ensures that each client receives a focused audit service rather than a uniform approach.
#2. The issuing and accepting of an Engagement Letter
Once the audit scope is finalized, an engagement memo or letter is drafted to be signed by both parties, confirming that the party conducting the audit is an independent audit firm. The engagement letter also includes the scope of the audit and the period for which the audit will be conducted. The audit letter is then accepted by both parties by signing it off, provided all the terms are clearly stated in the engagement letter.
#3. Conducting the Audit Procedure
The most common audits conducted during an external audit are Audit of Financial statements, operations audits and compliance audits.
#4. A financial audit
Examines the fairness and accuracy of the company’s financial statements and its compliance with the standard accounting principles. The external auditor must publicly issue a report on the health of the company’s financials, especially of publicly traded companies.
#5. An operational audit
Examines the organization’s activity flow and if the performance aligns with the organization’s goals. The external audit will provide recommendations and an action plan for improvements to achieve maximum results from the company’s daily operations.
#6. A compliance audit
A compliance audit is to know whether or not the company is following the standard procedures of rules and regulations, inclusive of the local laws and code of conduct.
The Final Audit Report.
The external auditor must ensure that the financial statements provided by the organisation can be easily interpreted by the users such that they are presented in a comprehensive yet reasonable manner. The audit report mirrors the accurate picture of the company’s financials & operations and states the company’s actual financial health.
A typical external audit attests to and confirms the fairness of the organisation’s financial reporting. It also provides recommendations on the flaws and gaps in the accounting, compliance and operating procedures. Therefore the final audit report submitted by the external auditor comprises various methodologies, recommendations and opinions on improvising internal control procedures of the organisation.
A Typical External Audit Report May Contain:
- An Unqualified opinion- is the most favorable opinion an external auditor mentions. It means that the company provided all the requested information by the auditor, and the financial statements and the company’s operations and compliance have met all the audit requirements.
- A Qualified opinion- When most of the company’s transactions and compliance are in order except for a few, the external auditor points out.
- Explanatory Paragraph- For an explanation required regarding certain transactions in the reporting, the auditor adds a descriptive paragraph.
- An Adverse opinion- As the name suggests, an adverse opinion is not much of a favorable report for the company’s financial reporting and compliance. The adverse opinion means there were many anomalies found during the audit, and the external auditor did not satisfactorily complete the audit due to the operations or cash flow inaccuracy.
- A Disclaimer- The auditor has as much right to present the fault in the company’s reporting methods. Suppose the company has not provided information up to a satisfactory level, and there are several gaps in its financial and operating procedures. In that case, an external auditor can refrain from finalizing the company’s financial statements and provide a disclaimer report based on the insufficient information provided.
Work with Farahat and Co for Your External Audit Requirements.
When selecting an audit firm in Dubai or an Audit firm in the UAE, a business may have many concerns. However, with decades of expertise and middle east business experience, Farahat and Co are the leaders in statutory audits in Dubai. Our multidisciplinary external auditors are highly qualified Certified Public Accountants in Dubai and Chartered Accountants trained to work independently with organisations of every type in the UAE.
Bringing you the right Audit Team
For executing your audit plan, we ensure a multidisciplinary team in place who can understand complex transactions using the latest industry standards. We believe in tailored services and provide you with our subject matter experts, who have experience working in the UAE and the middle east. Auditors on our team have experience with the Middle East and worldwide industry insights.
We invest in technology.
Farahat and Co are on track with the latest digital technology and provide the correct exposure and latest tools available. We are consistent with our approach, and our investment in technology helps our team to provide better insights into a company’s risks, failures and opportunities. We invest in training our staff so they bring out their brightest self during external audit engagements.
Accuracy and Efficiency
Farahat and Co have been known for their undoubtedly accurate external audit methodologies and a comprehensive understanding of businesses in the middle east for several decades. We have always held the values of transparency in our audit engagements through confident and accurate reporting on your business information.