Small and medium-sized businesses (SMEs) make up about 95% of all businesses in Dubai, accounting for nearly 42% of the emirate’s GDP. As a result, SMEs are the backbone of Dubai’s economy. Despite this, many small firms and startups struggle to raise funds and expand because they are unaware of the need of having auditors in Dubai. Many of them perform annual financial audits in Dubai to comply with regulations or at the request of a lender.
If they operate in a free zone, SMEs or startups, for example, use audit firms in Dubai. Annual audits are required by all Dubai free zone administrations, while they are optional on the mainland except in Abu Dhabi. The submission of audited financial accounts is not required in most free zones in the northern emirates. As a result, we have our doubts about whether small businesses in Dubai understand why they require an annual financial statement audit.
We will unpack this multibillion-dollar question and provide answers for you in this article. Let’s get started with the reasoning.
Small firms, unlike large corporations, do not have a large team of competent accountants to verify that their books of accounts are accurate. SMEs can have their books of accounts audited to guarantee that they are correct and meet international accounting standards. This is since an audit is carried out by competent auditors in Dubai who examine your books of accounts and internal controls. They would provide you advice on how to correct accounting problems and enhance internal controls. As a result, your books of accounts will be accurate and compliant with local and international standards by the end of the audit.
Management will be able to analyze your financial accounts and make better decisions for the company if they are correct. If the figures in the accounting records are incorrect, the judgments you make for the company will be incorrect as well. And this will have an effect on your company’s performance. In short, employing the top audit firms in Dubai is your greatest bet for accelerating your company’s growth.
When Dubai auditors examine your internal controls and systems, they may be able to point out any flaws. You can create a certification based on these ideas that will considerably reduce the danger of fraud. If a corporation decides not to do an annual audit, a potential fraud may go undetected. Big corporations are aware of this, which is why they choose the best audit firms in Dubai to do their audits. While conducting an audit can not guarantee that fraud will not occur, it does help to lessen the risk.
You can create trust among the company’s partners, investors, lenders, regulators, and other stakeholders by analyzing the financial statements regularly. An audit guarantees that such stakeholders have confidence in the financial statements provided by management or an accounting team. Consider a company that has an active partner who is involved in the company’s day-to-day operations. In addition, the company has some inactive or silent partners who want assurance that the active partner is not defrauding them. The audited financial statements ensure that all of the partners’ trust is preserved.
The auditor will check that the company is following all applicable regulations, such as the Commercial Companies or Free Zones Law, the Value Added Tax (VAT), the Ultimate Beneficial Owner (UBO), and the Economic Substance Regulations (ESR), among others.
To make the selling process go smoothly, business owners who wish to sell their company should undergo frequent financial audits. The audited financial statements will provide a clear picture of the company’s financial health to potential buyers. An audit may also assist business owners in raising the selling price of their company.
Regular financial audits in Dubai send a powerful statement to government officials, investors, and customers about your organization. This assists you in gaining trust in your company’s financial stability and growth.
It’s a frequent practice among small businesses and startups to undertake audits only when they’re required by law or for a specific reason, such as receiving a bank loan. Small businesses in Dubai that do not undertake financial audits risk fraud and a lack of understanding about the company’s financial health. Small enterprises and startups should contact the top audit services in Dubai to get their books of accounts reviewed to avoid such hazards.
Look no further than Alya Auditors if you’re looking for the best auditors in the UAE. With years of experience serving SMEs, startups, individual entrepreneurs, and large corporate groups, we are one of the most reputable audit organizations in the UAE. We provide the highest quality auditing services in the UAE and provide value to your company.