International Standards On Auditing in DubaiSeptember 21, 2022
Companies need elite standard controls and management to streamline observation and supervision, identify and overcome irregular transactions, simplify business processes, detect financial challenges, measure performance and maintain business records. Investors and entrepreneurs can assure the increased productivity of business with the quality assistance of auditing services; majorly, internationally implemented auditing standards. In Dubai, businesses are operated in a highly competitive environment. Thus, to remain ahead of the industry, accurate auditing services become crucial.
Continue reading to learn why your company need auditing services in Dubai and what are the benefits of international auditing standards for your company’s growth.
Auditing Standards in Dubai
Came into force on 1 July 2015, the UAE Commercial Companies Law 2015, requires all companies to exercise international accounting standards when maintaining their books of accounts. The former Companies Law had required compliance with internationally recognized accounting standards, which had been interpreted to mean IFRS Standards in Dubai.
Companies working across UAE in different sectors adopt different formats and rules to manage and maintain their business’s accounting records. In this regard, International Financial Reporting Standards (IFRS) and Generally Accepted Auditing Standards (GAAS) are two of the most commonly used standards.
International Standards of Auditing in Dubai
International standards on auditing in Dubai refer to practiced standards addressing the duties of the independent certified auditors when carrying out the financial audit of data of a company. Through the International Auditing and Assurance Standards Board, the International Federation of Accountants (IFAC) publishes these standards (IAASB).
International standards on auditing aim at serving the two crucial elements:
- Assist the nation in creating and executing a national action plan for institutional capacity enhancement to enhance the nation's corporate financial reporting system.
- Comparing national accounting and auditing standards to international norms, assessing the extent to which relevant auditing and accounting standards are followed, and evaluating the institutional framework's strengths and shortcomings in support of high-quality financial reporting.
Types of Financial Audit in Dubai
Financial audit as per international standards helps pay close attention to logging and reporting financial transactions, including commitments, permissions, and the acquisition and utilization of monies. This type of audit aims to verify that there are sufficient process controls over the acquisition and utilization of resources, as well as enough controls over cash and assets that resemble cash. In contrast to external financial audits, internal financial audits might not offer expert opinions on the accuracy of the presentation of the fiscal accounts. Companies, therefore, typically follow GAAS to conduct a financial audit of their business as per UAE’s laws.
Generally Accepted Auditing Standards (GAAS)
A collection of guidelines and regulations known as Generally Accepted Auditing Standards (GAAS) serve as the foundation for how auditors plan audits, carry them out, and present their findings.
According to a set of accounting guidelines known as GAAP, companies working in Dubai are required to disclose their financial records to the concerned bodies at the end of the fiscal year. Approved auditors in Dubai are responsible for examining whether the financial statements of publicly listed firms comply with Generally Accepted Accounting Principles (GAAP) in Dubai. Auditors analyze a company's financial information and accounting practices to ensure that they are correct and compliant with GAAP.
While noting that there may be other principles or standards an auditor needs to follow depending on the country, auditors frequently use the GAAS as a fundamental foundation for auditing activities.
Audit Procedures in Dubai
Approved auditors follow auditing standards in Dubai when conducting an audit of a firm. An audit can be done in two simpler steps including:
- The audit procedure commences with a notification alerting the audited party about the date and time of the process.
- The auditor conducts planning as the next stage prior to the audit in order to identify the primary areas of risk and areas of concern.
- This stage is often finished in a series of meetings when management outlines the areas that need to be addressed to auditors.
- The following stage, fieldwork, begins to guide the final audit plans.
- Employees are informed about the audit, schedules for the audit staff's activities are created, and the initial investigation begins following the identification of business procedures, sampling tests of current business practices, legal analysis, key staff interviews, and checks for consistency in internal rules and procedures.
Audit Process Completion
- The draft audit is created in the next stage after the audit is finished. The management is given access to the draft so they may examine, modify, and suggest changes as well as identify any problems and correct them.
- The management is then requested to respond to the report by outlining if they concur with the concerns listed, how they intend to solve each issue, and when they anticipate finishing up.
- As the final audit report is sent to appropriate officials inside and outside the audit area, the final meeting is expected to tie up any loose ends, review the management's response, and address the audit scope.
- The audit feedback, which entails putting the proposed modifications into practice as well as reviewing and confirming the effectiveness of these adjustments, would be the last step of the audit procedure.
Audit Reports in Dubai
The auditors’ audit reports show whether the financial statements are prepared in line with generally accepted accounting standards in Dubai. In the auditing report, the auditor must highlight any occurrences in which such principles have not been consistently followed.
If the auditor finds that the financial statements' informative disclosures are not at least substantially acceptable, they must disclose it in the audit reports of a business as per the international auditing standards in Dubai.
Benefits of International Standards Audit in Dubai
Resilience is one of the core components in every business as businesses are formed to grow uninterruptedly. Corporate processes need numerous forms of internal and external controls to meet that level of harmony, sustainability, and resilience.
Auditing for private companies in Dubai are companies that help conduct audits of businesses with respect to internationally recognized accounting and auditing standards and practices. Businesses should follow a single set of principles when performing a financial audit, according to the International Standards for Auditing (ISA); as this would have been one of the best methods to ensure compliance with international auditing principles in Dubai.
In addition, this establishes a universal standard that businesses and professional auditors alike should adhere to for both internal and external audits. Additionally, it makes it much simpler for auditors to use the same set of guidelines when working with global corporations. Otherwise, they would have to account for all the variations among the many geographic areas where the firm operates. A quality, transparent, and accurate audit helps companies to detect frauds within the business and make appropriate financial strategies to maximize growth.
How Avyanco Auditing Services Can Help Your Business
In Dubai, a mandatory audit has to be done by certified and approved auditors for companies operating in various industries and jurisdictions with an exception for a few companies working in free zones. The UAE government made audit a crucial element in the country. It is done to ensure your financial records are accurate and up-to-date as well as no malpractices have been done in your company’s financial records.
Avyanco is an approved and internationally recognized auditing firm that aspires to help businesses manage their finances and books of account while complying with the UAE accounting and auditing laws. Our approved auditors are all well capable of conducting a transparent audit of your company. Feel free to get in touch with us.