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Why UAE businesses should not avoid external audits

External audits are a stressful time for companies in the UAE, and owners often find the audits to be a very difficult process. Some even ask if auditing is important in the UAE, since there is no corporate tax. Small businesses on the mainland often ignore audits because submitting an audit report is not mandatory, and the same applies to companies operating in free zones in the Northern emirates.

However, companies are advised to carry out financial statement audits by approved auditing firms in Dubai to minimize fraud and other risk factors. In addition, banks and government agencies view the company’s audit report as a testimonial to its credibility and transparency. Additionally, UAE businesses should not avoid external audits due to the following  reasons:

1. Audits are valuable to business

With annual audits in the UAE, a company can gain a competitive edge by strengthening internal controls. A company that has been audited properly will have an easier time attracting investors and stakeholders. An audit ensures that the financial statements of the company do not contain any material errors. Companies can enhance their decision making, future growth, and promote good business practices by taking advantage of the best external audit services in Dubai. 

2. Auditing attracts investors

Before investing in a new company, investors look for credibility and transparency. An audited financial statement speaks volumes about the company’s credibility to investors. By evaluating the financial position of an organization, investors can make strategic decisions. In addition, investors and governmental bodies place great emphasis on audit reports. Regular audits help raise a company’s rating, as well as attracting more customers. 

2. Auditing attracts investors

Before investing in a new company, investors look for credibility and transparency. An audited financial statement speaks volumes about the company’s credibility to investors. By evaluating the financial position of an organization, investors can make strategic decisions. In addition, investors and governmental bodies place great emphasis on audit reports. Regular audits help raise a company’s rating, as well as attracting more customers. 

3. Discovering errors for business owners

External audits are used by business owners to find out the errors in their accounting process. Entrepreneurs may be prevented from making better business decisions because of accounting errors. Management is also prevented from reviewing historical financial information and discovering trends because of errors. In order to run a business effectively, entrepreneurs need to understand trends as it allows them to gauge future production or predict sales. Furthermore, an external audit ensures that the company’s accounting process follows accepted accounting standards, such as IFRS.

4. Controls' effectiveness is determined

By using external audit services in Dubai, companies can review their internal controls. The review will allow management to determine if proper approvals and authority checks are in place. As independent auditors, they can give unbiased feedback on the company’s internal processes. Business owners can use them to identify areas of operation that could be made more efficient. An analysis of internal controls reveals areas for streamlining and mitigating risks.

5. Lessens Fraud Risk for Companies

Independent auditors in Dubai are necessary since they can identify any potential vulnerabilities, such as fraud or embezzlement. An experienced auditor is capable of identifying fraud indicators and assessing fraud risk. An audit of this kind enables the business owners to implement robust anti-fraud mechanisms within their organization.

An auditor, who is not a company employee and has no interests in the company, would be better suited to detect financial misstatements that may lead to fraud. Fraud is a risk that must be identified, especially in a country like the UAE. In the UAE, the most recent example of accounting fraud involves the Abu Dhabi-based NMC Health group of companies. As a result of the scandal, one of the companies operated by the group was sold for one dollar. A good audit firm in Dubai will help companies prevent fraud within their organizations.

6. Ensures legal compliance

In the UAE, companies are required to comply with laws such as Anti-Money Laundering (AML), Value Added Tax (VAT), Economic Substance Regulation (ESR), and Ultimate Beneficial Ownership (UBO). Business owners can determine whether or not they are complying with compliance requirements by hiring audit firms in Dubai.

Are you wondering why you should hire the best audit firms in Dubai, UAE?

In addition to detecting errors in the accounting system, external audits provide comfort to a company’s management over the accuracy of the books of accounts. In addition to adding value to companies, external audits improve investor confidence and reduce fraud risk. Alya Almarzooqi Auditing (Alya Auditors) is an experienced audit firm in Dubai that can help companies plan a successful external audit.

Beyond meeting any mandatory obligations, Alya’s audit services in Dubai help companies cut risks and enhance their business strategies. Alya offers practical, hands-on advice for the audit, so that entrepreneurs can boost their business performance. Alya’s highly qualified Chartered Accountants in Dubai assist business owners in achieving their goals by challenging assumptions and resolving issues that could hinder their business growth.

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