External audits are the audits that an independent certified party from outside your company carries out. The party examines your company’s financial statements and assesses whether the accounts are accurately reflected in your statements.
As a corporate firm owner, you must ensure that your internal audits occur regularly so that your company is ell-prepared for external evaluations. Businesses in the UAE are saving themselves from falling into legal troubles y getting the services of professional auditors. If you own your business there, you can take the services of a professional from one of the best accounting firms in Dubai to ensure that your company is practicing its financial affairs within the premises allowed in local laws.
This article elaborates on you the steps that an external audit entails.
A stepwise guide to an external audit
Every business has to go through external audits. Thus you must stay prepared for the process and the way a certified auditor will carry it out. The steps are as follows:
1. Preparation for the audit
The audit is not a simple process. In any organization, there is a complete framework required for the whole process to conduct. External audits occur once or twice a year according to the local regulations. Before an external authority comes to check your company’s books and audits them, your company will have to prepare all the documentation and set the records right.
2. Evaluation of irregularities
When the preparation phase is done with, then comes the time for the auditor to check if all the statements are correctly presented. All documents and records are consistent with the practices and ground facts. In this phase, the auditor evaluates your financial statements and identifies the irregularities, if any.
3. Assessing fraud opportunities
In every system, there are some loopholes. In the case of financial matters, those loopholes are identified in the process of auditing. The external auditor will evaluate your auditing and accounting practices to find out if there are any grey areas in your records. The professional auditing authority will find out if your system has a strict check and balance system for dealing with opportunities for fraud.
4. Assessment of internal control
A certified external auditor will study who controls whom and which area of your accounts. Your company’s hierarchy and chain of command will go through a certain check to ensure that the administration is following the binding regulations applicable to your company.
5. Presenting the Audit report
When an independent external auditor has completed the assessments and analysis of your financial records as well as practices, now he/she will provide you with his/her opinion. At this stage, the auditor will mention any loopholes in the system regarding bookkeeping and dealing with unethical practices, if any.
Does your company conduct regular audits?
Regular audits are essential for transparent financial practices. They save you from facing charges resulting from non-compliance with local regulations.
To be safe from any anticipated or unanticipated calamity, your business must take professional services for accounts, bookkeeping, and audit. If you are in the UAE, you have good firms operating around you. You can take the services of the Best accounting firms in Dubai to ensure that your company sails through external audits without any trouble.
Make sure your financial matters are always transparent and free of lenience for fraud.