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It’s not just the jingle bells; December is also the time for the financial audit in the UAE. The fiscal year of the UAE starts on January 1st and ends on December 31st. Since businesses may need adjustments and modifications, it is important to start preparing for the financial audits earlier. Auditing in a business plays a key role in ensuring trust and efficiency within the financial markets. In simple words, it reflects the real financial position of your business. Financial statements are to be prepared in compliance with the accounting standards and principles of the UAE. Always remember that your financial statements say a lot about the financial health of your business. Apart from that, it is a piece of information for investors, creditors, and stakeholders. Since it plays a vital role in business and undermines the stakeholders’ willingness to engage with us, it should be prepared efficiently.
The following are a few measures companies must take before facing a financial audit.
Make sure you are aware of the applicable regulations in the UAE regarding financial audits. Review the laws and regulations that apply to the company and ensure that they are being followed. Gather the necessary financial information to be audited, including financial statements, balance sheets, and income statements. Make sure that all documents are complete and up-to-date.
You must obtain the agreement of all the important management stakeholders before the audit. Due to their prioritization of duties that are directly relevant to growing the firm, the key members of management might not feel as urgent about the audit. However, you must persuade them of the value of getting ready for the audit because lenders or investors might be depending on your audited financial statements.
You need to ensure that your business is functioning in compliance with UAE norms. Every year, updates are made to both accounting standards and legal and regulatory obligations. Therefore, it's crucial to acquaint the finance team with any new accounting advancements put forth by regulatory agencies. It takes less time to track data and make changes to comply with rules when you keep it updated.
Before the financial audit, you need to review the list of requirements from the auditor. Once you know what to do next, assign each task to responsible team members. Make sure that the members get the task done on time. For a smooth and efficient process, coordinate with the auditors. Also, make sure that at least one individual who interacts with the auditors is familiar with the fundamentals of accounting standards and how they relate to the business. To make the audit process less stressful, prepare the team appropriately.
The accounting department of a company plays a critical role in managing its financial resources. The accounting department is responsible for producing financial statements such as the balance sheet, income statement, and cash flow statement. It is also responsible for analyzing the financial data to identify opportunities for cost savings and to help identify potential risks. But the majority of start-ups lack a formal accounting department.
Even though it's the last stage in the process, submitting an audit report doesn't mark the conclusion of the auditing process. In addition, stakeholders need advice on the recommendations provided by Dubai auditors, key findings, areas at risk, and other major insights. They might also ask questions about specific details that only an expert in International Financial Reporting Standards (IFRS) could respond to.
The above-mentioned measures may be helpful while preparing for a financial audit, but it is best to seek help from any of the leading accounting and auditing firms in the UAE, like Reyson Badger. With our audit and assurance services, we support companies in achieving their goals by understanding their organizational structure and internal functions. Our team ensures that all financial records comply with UAE law and are tracked and maintained efficiently.