Why Do You Think an Audit is Important for Companies in the UAE?
Auditing is a means of evaluating the effectiveness of a company’s internal controls. Maintaining an effective system of internal controls is vital for achieving a company’s business objectives, obtaining reliable financial reporting on its operations, preventing fraud and misappropriation of its assets, and minimizing its cost of capital. Both internal and independent auditors contribute to a company’s audit system in different but important ways.
Enables the Pursuit of Business Objectives
Having an effective audit system is important for a company because it enables it to pursue and attain its various corporate objectives. Business processes need various forms of internal control to facilitate supervision and monitoring, prevent and detect irregular transactions, measure ongoing performance, maintain adequate business records, and to promote operational productivity. Internal auditors review the design of the internal controls and informally propose improvements, and document any material irregularities to enable further investigation by management if it is warranted under the circumstances.
Assess the Risk of Misstatement
Auditors assess the risk of material misstatement in a company’s financial reports. Without a system of internal controls or an audit system, a company would not be able to create reliable financial reports for internal or external purposes. Thus, it would not be able to determine how to allocate its resources and would be unable to know which of its segments or product lines are profitable and which are not.
Additionally, it could not manage its affairs, as it would not have the ability to tell the status of its assets and liabilities and would be rendered undependable in the marketplace due to its inability to consistently produce its goods and services in a reliable fashion. Accordingly, an audit system is crucial in preventing debilitating misstatements in a company’s records and reports.
Receive an Additional Perspective
People – inlcuding yourself – can become complacent, even in the best possible team. This can create significant problems in the future, which is why it is critical for you to conduct an audit as a preventative measure.
A good auditor will give you clear remarks on whether you are demonstrating full compliance and if there are any serious flaws in your system. They’ll also offer helpful suggestions on how to solve them. If you conduct the audit early on, it could mean the difference between your company flourishing and struggling in the near future.
Provide a Very Efficient Reliability
Auditing can benefit from pursuing audited financial statements for the tax authorities, financial institutions, and company management with an independent financial auditing, tax officials can depend on the accuracy of the financial information provided for thetax computation.
Provides Genuine Accuracy and Assurance to Business
Auditing can offer 100% genuine and accuracy so that assurance of the financial stability for any business is obtained.Through auditing, assurance can certainly be obtained from a well carried out auditing process and avoid any miscalculation/ misstatement of financial statements.
How can we help?
Alya Auditors serves businesses in the UAE with their experience in auditing, accounting, and VAT in the UAE. Experts will help them grow their business without having to combat challenges posed by inefficiencies in accounting tasks. We can also help entrepreneurs looking to start their dream business in the UAE. Get end-to-end accounting support coupled with the benefits of new-age technology that they use to boost your accounting tasks.
Apart from the above services we are also helping the companies and businesses in the UAE to file their ESR notification.
Learn more about Alya Auditors and its offerings.
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