Is Auditing Actually A Benefit?
Absolutely! As auditors who like to add value for clients, we’re surprised how many organisations still think an audit’s only purpose is to meet their UAE’s obligations. From investor confidence and business expansion to fraud and risk, an independent and thorough audit delivers business benefits far beyond regulatory compliance, both short and long term. Here are some of them.
More transparent financial reports for greater investor confidence
Financial statements that have been audited by a qualified and independent auditor provide greater transparency to investors, suppliers, and financial institutions. Stakeholders view audited financial statements as more reliable than unaudited ones and have greater confidence that the financial data is a sound basis for business decision-making.
This is especially important for businesses that are expanding. If you are looking to obtain finance, acquire or merge with other companies, an audit will help you identify unknown default risks and support the due diligence process.
Improved internal controls for better fraud prevention
Most auditors issue ‘management letters’ at the closure of their audits to give management an understanding of the control issues (‘exceptions’) that they have identified. However, good management letters go beyond simply what went wrong and make recommendations on how to improve the issues so they don’t recur, or worse, turn into major problems in future financial periods.
Once you implement your auditor’s recommendations, your improved internal controls should give you a powerful means to prevent misleading errors in financial reporting and to tackle the growing threat of fraud.
The latest audit technologies improve risk identification
Alya auditors use Computer-Assisted Audit Techniques (CAAT) and data analytics to improve the efficiency and productivity of their external audit process. CAAT equips us with the tools to manipulate data, identify unexpected and unexplained patterns, and uncover indicators of possible fraudulent financial reporting. The graphs and reports that we generate clearly depict our findings of anomalies, reveal trends in financial data, and highlight control weaknesses.
CAAT enables us to find cracks in internal controls that may otherwise be overlooked. This is invaluable to improve governance, financial risk management, and fraud prevention throughout your organization.
Better tax risk management
Part of your auditor’s job is to investigate the existence of major tax risks and bring them to management‘s attention. We do this both verbally and through the management letter, minimizing the likelihood of filing erroneous tax returns, tax violations, and the occurrence of other tax risks that could incur substantial penalties.
Access to industry experience for insights into best practice
Auditors typically possess years of experience with a wide range of companies at different stages of their business life cycle and from a multitude of industries. You can tap into this knowledge and experience for the long-term benefit of your business. For example, Accru Felsers specializes in working with Australian distributing subsidiaries of European multinationals and is able to provide strong insights into best practices for international businesses in the UAE as part of our communications with management and those charged with governance.
A platform for future expansion
The business benefits that result from a professional audit can be significant – industry insights, identification of control weaknesses, improvements to internal controls, and ensuring sound foundations for tax compliance. An insightful audit provides a platform from which your business can tackle future challenges and evolve over the course of its life cycle.
The bottom line?
An entity that has had their financial reporting processes and controls subject to a detailed analysis by a qualified professional is in a much better position to be successful than one which has not.
Alya offers external audit and a range of other audit and assurances services for a huge diversity of organisations. In Dubai, Alya specialises in audits for all kinds of businesses, international hotels, not-for-profits and financial services organisations. Our clients typically perform above industry benchmarks.
If you’d like to know more about how we could add value to your audit, please contact us.