Standard Auditing Process

audit firms in dubai

Auditing Process 

Auditors have a very important job. They help firms assess internal guidelines and policies, evaluate operating performance, and determine whether the policies are in line with the regulatory procedures and requirements. Aside from that, they also evaluate financial reporting process and accounting tools and systems as a way to determine whether the financial statements are accurate or not. 

With that, certain auditing processes should be taken into consideration. These are:

* Review the operating environment

* Internal controls testing

* Account testing and detailed balance

* Analytical procedures

* Risk assessment

Review the Operating Environment

An auditor’s job is to evaluate the business entity’s operating environment. This would allow him to determine the crucial factors that affect the operations. This could range from internal to external, and short to long-term factors. Likewise, an audit specialist should also review the organization’s activities and ensure that most of these are legal and comply with the regulatory rules set by the government. For external factors, this could be comprised of the governmental mandates, business practices, industry trends, as well as economic sector outlooks. On the other hand, internal elements that could have an impact on the company’s activities could be senior management’s leadership ethics, style, human resource procedures, and safety policies or occupational health.

Internal Controls Testing

Auditors should also review the firm’s policies, procedures, and internal control. Aside from that, they should also evaluate the operating performance, detect risk trends, and determine the human resource guideline. They must use the operational knowledge in order to evaluate the efficiency and the control designs. Controls are specifically and adequately designed if goals, decision-making processes, and step-by-step procedures are clearly presented. This is considered to be very important, because effective controls could prevent the occurrence of mistakes and flaws for which they are designed. With that, auditors are tasked to focus on controls in “high-risk” areas and cooperate with segment managers as a way to correct the deficiencies detected. For example, an auditor could review the plant’s safety handbook, assess detailed step-by-step procedures and give an advice to the management, asking him to modify the procedures, because they don’t follow the regulatory guidelines one must comply with.

Account Testing and Detailed Balance

An auditor’s job is to give extra attention to detail on balances and accounts. They should monitor if the operating procedures and controls are either weak or high. Whatever the findings may be, they should report these financial statements, especially if it seems to be inaccurate. Aside from that, they could also focus on the income statement key accounts or balance sheet instead. This could be expenses, sales, accounts receivable, accounts payable, and cash. The balance sheet is a type of financial statement that presents the firm’s debts, assets, and owner’s equity at the end of each quarter. Furthermore, the income statement should also present the firm’s revenues and loses periodically. For instance, an auditor should review the details of a firm’s revenue account in order to verify if the sales and customer discounts are accurately recorded, without any discrepancies.

Analytical Procedures

Analytical procedures help the auditors in determining and confirming the relationship between balances or financial statement accounts, compare current and historical data, assess key operating trends, and assess accuracy in financial reporting. Additionally, auditors should also ensure that the financial information is thoroughly prepared and reported professionally in accordance with accounting principles, as well as regulatory guidelines generally accepted in industries in which the organization is currently operating. For instance, an auditor should know that receivables, sales, and non-collectable accounts in the balance sheet are linked to each other. Then, he should verify whether these sales revenues, excluding the discounts, are really consistent with the non-collectable amounts as well as the customer receivables.

Risk Assessment

Auditors evaluate if the business is at risk, through reviewing the internal controls, guidelines, internal policies, and deter risk trends in a firm’s segment. They’re tasked to work in accounting, risk management, and even in the corporate finance departments in order to evaluate the risks and exposures across activities and business lines like operational and financial risks. Keep in mind, the financial risks are always market-and credit-related. This risk is associated to losses incurred because of price fluctuations in securities markets, and business partners because of bankruptcies. On the other hand, operational risk is comprised of information systems, reputation, regulatory and legal risks. The auditor should evaluate the firm’s risk profiles and delegate “low,” “medium,” and “high” ratings of areas evaluated and designate testing resources.

Looking For The Top Auditors in Dubai ?

Alya Auditors provides all kinds of Auditing including Forensic Auditing & Accounting,Due Diligence Auditing ,Statutory Auditing & Concurrent Auditing. Alya Auditors provide all services for clients in DMCC and all other free zones. Alya also combines the use of advanced software with the guidance of accounting professionals. We provide professional services in the field of Auditing, Accounting, Company Formation & VAT Consultation etc.Our customers benefit from a team of trusted, in-house experts ready to meet your accounting needs.

Our powerful software integrates with a variety of accounting software partners, such as  Xero,Tally and Quickbooks, to automate monthly reports and free you to focus on the success and expansion that you strive for with your small business.

When you are ready to hand off the chore of accounting and focus on the business you love, Alya is your financial headquarters. We have powerful software that can save you time and money to get started today.

Benefits of Statutory Auditing For Companies in UAE

Statutory Auditors in Dubai,UAE

Statutory Audit Benefits For Companies in UAE

Statutory audit, also known as financial audit, is one of the main types of audit which is to be done as per the statutes applicable to the entity and its primary purpose is to gather all relevant information so that the auditor can give his opinion on the true and fair view of the company’s financial position as on the balance sheet date.

  • The purpose of the statutory audit is to Auditor has to give his view independently without being influenced in any manner. He will check the financial records and will give his opinion thereon in the audit report.
  • The statutory audit will help the stakeholders to rely on financial statements. Stakeholders other than shareholders also get benefited from the statutory audit as they can take their call based on the accounts as they are audited and authentic.

Advantages of Statutory Audit

  1. It increases the authenticity and credibility of financial statements as the financial statements of the company are being verified by an independent party i.e., the auditor.
  2. It confirms that management has taken due care while delivering their responsibilities.
  3. It also states regarding the compliance with the non-statutory requirements like corporate governance etc.
  4. The auditor also comments upon the strength of internal control within the organization along with internal checks among the departments or segments. He also suggests the area where internal control is weak and prone to risk. It helps the company to mitigate the risk and results in improvement of the performance of the company.
  5. The financial statement of the small company for whom audit might not be applicable get more values if it is audited one because with the help of the audited financial statements it becomes easier for the companies to get banking loan and other types of facilities on producing of financial statements which are audited by an independent auditor as the audited statements are more reliable and authentic.

Looking For Approved Auditors in Dubai ?

Alya Auditors provide all services for clients in DMCC and all other free zones. We provide all kinds of Auditing including Forensic Auditing & Accounting,Due Diligence Auditing ,Statutory Auditing & Concurrent Auditing. Alya also combines the use of advanced software with the guidance of accounting professionals. We provide professional services in the field of Auditing, Accounting, Company Formation & VAT Consultation etc.Our customers benefit from a team of trusted, in-house experts ready to meet your accounting needs.

Our powerful software integrates with a variety of accounting software partners, such as  Xero,Tally and Quickbooks, to automate monthly reports and free you to focus on the success and expansion that you strive for with your small business.

When you are ready to hand off the chore of accounting and focus on the business you love, Alya is your financial headquarters. We have powerful software that can save you time and money to get started today.

Things To Be Done Before An Audit

Things To Do Before An Audit in UAE,DMCC

Documents Needed For An Audit

statutory audit is an examination of an entity’s financial records in accordance with the requirements of a government agency. A number of organizations must undergo statutory audits, including the following: Banks. Brokerage firms.

Before planning for statutory audit, we need to keep ready important document for audit. Here is list of important documents.What documents required by auditor at the time of audit?

SR NODOCUMENTATION
1AUDIT ENGAGEMENT LETTER
2OPENING TRAIL BALANCE 
3LAST YEAR SIGNED FINANCIAL STATEMENT
4COPY OF CAMPUTATION OF INCOME OF LAST YEAR
5SHAREHOLDING PATTERN
6LIST OF DIRECTORS
7LIST OF KMPs
8REGISTER 301 EXTRACTS
9MINUTES OF MEETING
10FORM 26AS
11FIXED ASSETS REGISTER
12INVOICE OF ADDITION TO FIXED ASSETS
13INVOICE OF SALE OF FIXED ASSETS
14TDS PAYMENTS CHALLANS
15PF/PT/ESIC/MLWF(WHICHEVER APPLICABLE) PAYMENT CHALLANS
16ADVANCE TAX PAYMENTS CHALLANS
17RETURNS COPY 
18LOAN PAYMENT SCH. & LOAN CONFIRMATION LETTER
19CASH BALANCE CONFIRMATION LETTER ALONG WITH DENOMINATION
20BANK BALANCE CONFIRMATION
21OUTSTANDING ENTRY PASSED:PROVIDE SUPPORTING XEROX COPY
22LIST OF RELATED PARTY AS PER AS18
23LEDGER OF RELATED PARTY FROM TALLY HAVING TRANSACTION
24CALCULATION OF FOREIGN EXCHANGE PROFIT/LOSS
25CASH LEDGER WITH TRANSACTION MORE THAN Rs. 20000/- 
26SECTION 274(1)(g) OF CO. ACT: REPRESENTATION FROM DIRECTOR FOR QUALIFICATION
27STATUS OF PENDING INCOME TAX ASSESSEMENT
28DRAFT FINANCIAL STATEMENT
29MANAGEMENT REPRESENTATION LETTER
30ANY CHANGE IN MOA/AOA
31CERTIFICATE UNDER SEC. 40(A)(3) & 269SS & 269T OF INCOME TAX 
32COPY OF ANNUAL RETURN FILLED WITH MCA
33CALCULATION OF DIRECTOR REMUNERATION AS PER COMPANIES ACT
34SECTION 383A: SECRETARIAL COMPLIANCE CERTIFICATE
35SHARE APPLICATION PENDING REFUND

Looking For DMCC Approved Auditors in Dubai ?

Alya Auditors provide all services for clients in DMCC and all other free zones. We provide all kinds of Auditing including Forensic Auditing & Accounting,Due Diligence Auditing ,Statutory Auditing & Concurrent Auditing. Alya also combines the use of advanced software with the guidance of accounting professionals. We provide professional services in the field of Auditing, Accounting, Company Formation & VAT Consultation etc.Our customers benefit from a team of trusted, in-house experts ready to meet your accounting needs.

Our powerful software integrates with a variety of accounting software partners, such as  Xero,Tally and Quickbooks, to automate monthly reports and free you to focus on the success and expansion that you strive for with your small business.

When you are ready to hand off the chore of accounting and focus on the business you love, Alya is your financial headquarters. We have powerful software that can save you time and money to get started today.