Why an External Audit is required?

internal auditor

Why an External Audit is required?

An External Audit is an inspection and review of the financial status of a corporation undertaken by an audit firm not associated with the auditing company. In order to assess the accuracy of calculations and the documentation procedures used, this method typically starts with a review of the company’s accounting records. To assess whether the company’s reporting correctly represents the condition of the company’s assets and overall fiscal well-being, the auditor’s analysis of the company’s accounting is compared to the financial statements.

In certain cases, business owners need an external audit as a means of supervision of the management of the company. For large companies where ownership and control are separate, this is especially true. Owners/shareholders seek reassurance that the management team is working competently and that their investments in the company are safe. External audits mandated by the government are specifically intended to identify illegal activities by corporations. Businesses in Dubai and other UAE emirates are expected to use accounting firms that have been approved by the authorities.

External Audit in UAE:

Since 1984, audited financial statements and the adoption of Commercial Companies Federal Law No 8 have been required in the UAE. This condition will be met by an external audit carried out by auditors in Dubai and other UAE emirates and the company will be isolated from the possibility of fines or other penalties. The penalties were established in a new federal law on commercial companies released in 2013.

UAE Free Zone requirements of External Audit

As part of the licence renewal process, the UAE authorities will request audited financial statements. Audited financial statements for licence renewal will still be submitted by Free Zone Authorities. It will make licence renewal rapid and reasonably painless to have the audit report ready.

Reasons for faith in the work done by audit firms:

Independent External Auditors are mandated by law to be fully independent of the audited organisation. There are laws banning auditors from taking any interest in the audit’s result. Auditors should have no investment in the company being audited. The principles of auditor independence are articulated by these professional organisations which provide auditors with education. There are several organisations that provide auditors with a watchdog feature. Individual audit practitioners and audit firms must retain both their appearance and their independence in order to remain licenced or accredited as auditors. Questions regarding the independence of an auditor are investigated and it is possible to revoke licences or certifications. When the auditor’s certification is checked by a stakeholder in an audit, that stakeholder is encouraged to trust the work of the auditors.

We are one of the leading and reputed auditors in Ras Al Khaimah. Sharjah & Dubai 

• Audit & Assurance: With our audit and assurance services, we can independently check the information you rely on for business decisions.
• Risk based audits: We will investigate the internal audit process to assess if our risk-based audit services are successfully managing potential risks.
• Assurance services to shareholders, regulators, bankers and lenders: Thanks to our assurance services, shareholders, lenders and regulators may have faith in company financial results.
• Compilation & review services: We will help you prepare standards-based financial statements and, through our compilation and analysis services, report our views on the quality of those statements.
• Attestation services: We will examine your financial reports and express our opinion on the validity of information in the reports with our attestation services.
• Statutory audit services: As approved Auditors in Dubai we are qualified to perform statutory audits.
• Compliance with IFRS: We can ensure that your financial statements are prepared according to International Financial Reporting Standards (IFRS).
• Attestation of Financial Statements: We can examine and attest your company’s financial statements with our formal external audit services.
• Management reports: We can analyze company performance and provide you with in-depth management reports of business performance.
• Internal controls review: We can investigate your company’s internal controls and report on their effectiveness.
• Assurance to lenders: Our auditing services can provide assurance to the shareholders, bankers and lenders regarding the performance of the company.
• Assurance to relevant authorizes: We are familiar with the regulatory financial landscape in UAE and we are authorized to perform auditing services. We can provide assurance to authorities that your financial statements are valid.
• Review or reporting and other processes: We will work with your designated audit personnel to assure proper internal audit procedures and reporting are being used.
• Performance reporting: We can provide regular reports on on-going performance of the company.
• Company’s policies & procedures: We may monitor transactions and report compliance with the policies & procedures of the organisation.