What is External Audit and How it is Done?
An external audit is conducted by an independent auditor examining, analyzing, and certifying the accuracy of the financial statements prepared by the company. It is binding by law on all companies registered under the UAE Commercial Companies Law, to be audited annually. Further, even some Free Zone authorities have made it mandatory to submit the audit reports.
The purpose of a statutory audit is to determine whether an organization provides a fair and accurate representation of its financial position & if funds were handled properly by examining information such as bank balances, bookkeeping records, and financial transactions.
The shareholders of a company can choose any registered statutory auditors or audit firms in UAE in general meeting.
Companies in the UAE are required to complete their audits in accordance with international financial reporting standards. We can advise you on what is the best reporting to meet your financial needs.
An external auditor must be professionally qualified and specialized in the field of Auditing. An external auditor can also be appointed by the government to go through and conduct an examination of the financials of a company if the government detects a case of fraud or misleading information.
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Auditor presents an audit report which will simplify and present all the workings of the company which would help the management to take remedial actions regarding any slow or faulty process.
An auditor sees to it that the books of accounts are made according to the rules and regulations of the concerned authority.
After properly scrutinizing the audit report, the management of the company can decide if any of the processes needs tweaking. This would help in understanding the weakness in the process and the management will take remedial measures accordingly.
Having your financial statements verified by an external auditor can lead to more credibility in the business marketplace than those that have not. Should you be seeking to raise finance or sell your business in the future, providing audited accounts gives security that your accounts are free from material error or misstatements, making you more likely to be successful in achieving your goals.
An independent review of the financial statements can provide transparency to the shareholders that the company is being run within their best interests and can highlight any issues that have occurred which may not have been brought to their attention.
As the external auditor is a separate third party and has no relations to the company whatsoever, he would be unbiased towards the company and would present his reports and the corresponding views in such manner.
We at RVG Chartered Accountants can assist you with external Audit Service in Dubai.
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