Internal auditing plays an important role in streamlining and boosting company performance. Best audit firms in Dubai help organizations in Dubai uncover key risk factors. This allows the entities to project potential future concerns and discover current weaknesses. Moreover, the company can identify underperforming controls and processes and opens up an opportunity to improve on these.
What is Internal Auditing?
The main goal of internal auditing is to guarantee a company that its risk management, internal control processes, and governance are working effectively. Internal auditors should be independent of the activities they assess and report to the company’s senior managers’ audit committee or the board of directors.
With the help of the managers, internal auditors review operations and systems. These audits help evaluate how well the company manages risks, whether appropriate processes are in order, and whether stakeholders follow procedures to the letter. Lastly, they discover an area of improvement and where processes should be improved and streamlined.
The Difference Between an External Auditor and an Internal Auditor
External auditors report findings to shareholders and other associated parties outside the firm’s governing body. On the other hand, internal auditors report to the senior management and board of directors of the company. The latter analyzes and suggests ways to improve a Dubai company’s control processes. Internal auditors are often employees of a company and report to the management.
But, companies that don’t have an internal audit team could hire internal audit firms in Dubai to carry out audit services. The auditors will evaluate various arms of the company, especially risks and practices. External auditors normally check financial records and offer recommendations concerning the firm’s financial statements. External auditors also work for independent audit services and are chosen by a shareholder vote. Therefore are answerable to the shareholders.
How does a company benefit from internal auditing?
Let’s find out:
1. Evaluation of Internal Controls
A crucial reason for carrying out an audit is to assess internal controls’ design and operational efficiency and assure company managers of these controls. The main goal of internal audit firms in Dubai, UAE, is to uncover gaps and weaknesses in the internal controls and provide actionable recommendations. As such, the certified internal audit in Dubai strives to avoid misappropriation, prevent fraud, and streamline the financial viability of operations.
2. Evaluate the Risk Management Processes
In a world experiencing immense globalization and rapid technological advancements, companies in Dubai, UAE, are compelled to be dynamic and subject to different legal, financial, technological, and compliance risks.
As aforementioned, internal auditing services in Dubai are meant to discover crucial risks and suggest ways to transfer or mitigate the risks. They measure the risk management processes within the company and confirm if they are working well.
3. Protects Assets
Every business person in Dubai, UAE conducts minimum investment in assets from the beginning to the exit of the business. These assets are prone to misappropriation or theft over some time.
Therefore, internal audit firms in Dubai, UAE, are important in protecting and deterring misappropriation and theft of assets by developing effective internal controls on acquisition, usage, and disposition.
4. Ensure Timely and Reliable Reporting
Internal audit services help the accounting and finance department with periodic and smooth management reporting. The audit function checks the business performance concerning previous budgets, periods, variances, and trends. It also provides reasons for the same via regular management reporting, such as profit/loss.
Dubai internal auditors review reports that accountants submit before submitting them to management. This allows managers to make the right decisions and plan effectively.
5. Provides Value Additions and Process Improvements
An internal audit helps promote value additions and improvements to the current business practices and processes. It improves the current standards at the industry level. It gets rid of redundant and outdated processes, hence creating opportunities for innovations and betters ways of handling things. It also enables employees to improve efficiency, be more productive, and enhance the quality of operations and organization growth.
To fulfil the responsibility of maintaining an internal control system, management would benefit from having an internal audit function to assist it in its risk assessment process.
Setting up an internal audit function does not have to be expensive. It is unnecessary to hire a department when an entity is just getting started. Outsourcing or co-sourcing can be done just as easily as internalizing the function.
Starting with a preliminary risk assessment and prioritizing the areas of need would be very efficient, like wading into the shallow end of a pool. When that time comes, you will be able to make a meaningful decision about how to staff the priority projects effectively and benefit an internal auditor.
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Umapathy Anuruthan, is a Senior Auditor at the firm, holds a Business Management Degree and carries with him an experience of 6+ Years, having worked in two of the Big 4 audit firms. He has a ‘hands-on’ understanding of external audits and financial reporting and is well-known for his approach to ensuring the highest quality and accuracy in audits for clients of numerous industries.