The financial records of your company must go hand in hand with the transactions you claim to represent.To ensure the same financial audit is required.
Do you know what the core value of your business is? No, it’s not your punchline. It’s integrity. And with integrity comes transparency. Both are linchpins holding together your professional reputation and business relationships. Therefore, ensuring integrity and transparency becomes paramount for businesses alike. That’s where the audit hops on and presents the “true and fair” picture of your company’s standing to help the management in making big-little decisions regarding future planning. It exhibits the financial position (assets, liabilities & shareholders’ equity) and financial performance (profit/loss) of a company. Therefore, you can’t go wrong by appointing an independent external auditor to audit the financial statements of your company. After all, this is something you want to be handled by experts who have a great eye for detail. your company must go hand in hand with the transactions you claim to represent.To ensure the same financial audit is required.
Financial Statements Audit: Brief
Audit (or a financial statement audit) points to an independent examination of a company’s financial statements and its concerning disclosures by auditors in order to determine that the financial records don’t contain material misstatements and faithfully illustrate the financial performance and position of the entity (“true and fair” view of the company’s financial standing). The auditor’s report is accompanied by financial statements when they are issued to the recipients. In short, a financial statements audit is done to attest financial standing of a company. You may be required to present them when requested by third parties such as government entities, banks, investors or management.
If you are doing business in the UAE, you have to adopt International Financial Reporting Standards (IFRS). No matter where your company is registered – in NASDAQ Dubai (formerly known as DIFX), Dubai Financial Market (DFM), or Abu Dhabi Securities Exchange (ADX), you are required to manage the accounting records of your company in accord with IFRS. IFRS Standards bring transparency by heightening the international comparability and quality of financial information, enabling investors and other market participants to make informed economic decisions. The standards render information that is necessitated to hold management to account.
Financial Statements Audit: Importance
Your financial statements do the talking for you! They reveal a lot about your company’s financial condition including your borrowing capacity to the bank or vendors you are heading to for loans or business expansion. They sure need a third eye to cut an appealing figure in the market. Therefore, you can’t afford even a single error in those. You’ve got to be very mindful about who audits them. Audit plays the first fiddle in any company when it comes to keeping track of its financial transactions. It helps you enhance communication along with internal control & operations, bring down cost of capital, elevate compliance and reporting, take crucial decisions and most importantly appeal to third parties. After registering a company in the UAE, it’s mandatory to file annual financial statements accompanied and attested with an auditor’s report as per the UAE Federal Law on Commercial Companies. Your professionally audited financial statements solve multiple purposes such as stakeholder reporting, financial statement analysis, statutory reporting, bank financing, and trade license renewals. You as a business owner have to make sure that they are available and comply with IFRS standards. Effective planning is all you need to achieve a quality audit. The process involves three phases – Planning & Risk Management, Internal Controls Testing and Substantive Testing. Engage an experienced external auditor, conform to document requests, supply financial statements generated as per the IFRS standards, and voilà! A quality audit done by an expert third-party professional specialising in the field multiplies the value and credibility of the financial statements produced by management, thus boosting user confidence in the financial statement.
Companies That Have to Undergo Financial Statement Audit
Public companies are obligated by law to ensure that their financial statements are audited by a registered CPA. The independent audit aims to ensure that the management has provided financial statements that are free from material error. Small companies can go for an audit when required by any financial institution, supervisory unit, or to meet certain conditions. However, Limited Liability companies (LLCs), Partnerships or Affiliations limited by shares, Joint-stock companies and every other business mandated by law should conduct an audit at any time of the financial year in the UAE.
Purpose of Financial Statement Audit
There are various objectives behind conducting financial statements audits. Some of them are:
To attest the financial standing of the company
To identify critical areas of concern in advance so as to take corrective measures on time
To discover any discrepancies, potential risks or fraudulent activities in the records
To evaluate the business’s ability to continue as a going concern to generate profits and revenues.
To figure out the areas and ways of improvement in the business processes
To attract investments or enhance funding options
Preparation of Annual Financial Statements in Dubai
Preparation of true and fair financial statements in the UAE has been expressly identified as one of the responsibilities of the directors of companies in the corporate law of several countries such as UAE Commercial Companies Law (CCL). Free zone businesses in the UAE must prepare their annual financial statements based on IFRS. Even though most companies limited by shares are free to prepare financial statements as per the normally expected structure, most of them prepare it based on IFRS. Subsidiary corporations registered in other places can produce their financial statements following their holding companies.
A financial statement is a formal record of the financial activities of a business. When we say we do financial statementsaudit we refer to a bundle of various types of documents including income statement, balance sheet, statement of cash flows, statement of financial position, profit & loss report, statement of change in equity and the financial statement notes (or disclosures). Our focus is always on delivering quality work while maintaining integrity and compliance with the audit standards. Speed, transparency and accuracy are our core values that make us stand apart. While working with us you don’t have to worry about confidentiality, fidelity and deadlines of your reports.
Adam Global: Your Financial Statements Auditor in Dubai, UAE
Looking for a pro financial statement auditor in Dubai? Adam Global fits the bill like no other auditors in the UAE. A go-to business set-up advisory firm for most aspiring and seasoned business persons in Dubai, Adam Global (AG) is known for providing quality services in all aspects of a business, from business inception to business expansion and everything in between. At AG, we understand the importance of establishing and fostering trust with ownership and other key stakeholders for businesses in Dubai. That’s why we are pleased to provide them with a high-quality financial statements audit service in Dubai that helps them present a “true and fair” view of their company’s financial performance and position. The qualified auditors at Adam Global can audit or review your financial statements and corresponding disclosures, furnishing an independent conclusion they are not materially misstated and assurance they meet financial reporting requirements to help your organization grow upward and onward. Whether you’re seeking investors for your business or looking to apply for credit, you can rely on our extraordinary service providers for all four types of financial statements-
Statement of financial position (balance sheet),
Statement of comprehensive income (income statement/ P&L statement),
A financial statement is said an audited financial statement after a certified public accountant (CPA) gives the third degree to it using their skills and expertise in audit. They ensure that the statement abides by general accounting principles and auditing standards (IFRS). It’s a kind of seal of approval that you receive from the CPA which is required by investors and lenders to make sure that the statement you’re presenting is reliable.
What are the basic principles that govern a financial statement audit?
Accounting principles are the rules and guidelines that companies must adhere to when reporting financial data. Below are the basic principles for trust-worthy financial statement audit. Integrity, Objectivity & Independence: The three are the foundation of professionalism. The auditor should be impartial and possess the qualities like straightforwardness, honesty, and sincereness to prepare the audit fair and square. Confidentiality: Security of information is of utmost importance for every company. Maintaining confidentiality throughout the process becomes the first priority of the appointed auditor. He should not share any confidential information to a third party no matter what. Skill & Competence: They should be skilled to conduct the audit with due professional care. Financial statement audit demands extensive training, experience, and competence. Team Work & Job Delegation: The auditor can task other auditors and experts with some of the work. But in the end, they will be accountable for their opinion on financial information. Documentation: All the document matters pertaining to the audit should be documented by them. Planning: The auditor should plan their work to perform an audit in an effective and timely manner. Plans should be established on knowledge of the client’s business. Audit Evidence: Evidence-based approach is a rational method for reaching reliable and reproducible audit conclusions in a systematic audit process. The auditor you have hired should perform compliance and substantive procedures to acquire adequate and appropriate audit evidence that will help them to draw reasonable conclusions. Accounting System & Internal Control: Internal control system ensures that the accounting system is sufficient and that all the accounting information has been duly recorded. The auditor should be able to interpret the accounting system and associated internal controls adopted by the management. Audit Conclusions and Reporting: The auditor should go over and assess the conclusions drawn from the audit evidence obtained through the performance of procedures. The audit report should feature a clear written expression of opinion on the financial statements.
What is the Audit Period in the UAE?
Typically, the audit period is from 3 to 6 months from the date of the fiscal year end. The Report/Declaration must be certified by the auditor and submitted to the FTZ administration, where the company is registered. Usually, external audits are performed annually. If the management of a company requires special purpose audits, it can be conducted for a different period or even number of years.
How much time does an auditor take to audit?
Audits are usually scheduled for three months from starting to end, considering the time taken during all three audit stages – four weeks of planning, four weeks of fieldwork and four weeks of compiling the audit report. The auditors generally work on multiple projects in addition to your audit.
Is an audit required in the UAE?
Yes, it is mandatory for the government entities to get the accounts audited by regulated statutory auditors in UAE. The shareholders of a company can opt for any registered statutory auditors or audit firms in UAE in a general meeting.
Who can audit a company’s financial statements in the UAE?
In order to know who can audit your book of accounts you may check with the bank’s (or other lender’s) list of approved auditors in the UAE you are looking to get funds from. Only a certified professional accountant (CPA) can conduct financial statements audit.
Who can prepare audited financial statements?
Any company that wants to present its financials to investors or lenders for a certain objective should prepare audited financial statements. Usually, the decisions of potential funders for a company depends on the audited financial statements. The unaudited ones can be inaccurate. Furthermore, companies that are publicly traded also need to prepare annual audited financial statements. You still can regularly generate unaudited ones throughout the year if they help you assess your finances even if your company is not mandated by federal regulatory bodies to file audited statements.
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