Managing Internal and External audit procedures is an essential requisite for businesses to function in Dubai. An Internal audit maintains the Company’s financial profile and helps companies to overcome financial stress. In contrast, an External audit procedure is conducted to enforce financial stability and to rectify last-minute mistakes. Thus, strict measurements are enforced when conducting audits to ensure a detailed and accurate audit procedure. An approved top audit firm in Dubai can ensure an efficient and seamless audit procedure for your company, in full compliance with the set regulations and laws.
An internal audit system refers to a body that evaluates and monitors a company’s internal financial control, accounting processes, and corporate governance. It is a manual process and facilitating activity designed to bring a systematic and disciplined approach to assessing the company’s internal operations, preventing risk management, providing insights on elevating results and securing assets.
An external audit involves a third person/party that examines the financial records maintained by a company to provide a statement that corroborates whether an audit is substantial. External auditors are responsible for analyzing the overall financial management and procedures of the company and making better suggestions to run and perform it. Such an examination has to be conducted by a CPA-certified outsider, not an internal employer to ensure that the results are unbiased.
Read more: How to prepare for an external audit: The ultimate guide
The entire audit procedure is conducted through the following steps:
The planning phase marks the beginning of the audit procedure. A meeting is held between the auditor and client, discussing the scope, risk factors, and objectives of the audit. Every bit of information and data are collected and the remaining details of the audit are planned to perfection.
Obtaining the client’s trust is also an important step to take when planning the overall audit. Information on the auditor designing the audit and key areas of concerning inquiry are all mentioned in the plan.
In a general overview of operations, further data is collected and everything is reviewed with key personnel.
Steps identified in the planning phase and preliminary survey are followed up and put into best practice. The major role of the auditor is to concentrate on transaction testing on the information obtained from the survey. Testing validates whether the data obtained is functioning effectively or not so that a final draft of the audit work is created concluding only significant findings.
In summary of the fieldwork, the final draft report comprising recommendations, opinions, and significant findings is presented to the client for review or to make improvements and suggestions along with a timeline to patch up the audit report.
The last course of action involves the follow-up report. As per the client’s suggestions. A few unresolved findings will also pop up in the follow-up report and can be reported annually to the higher committee.
Internal and External audits have the same objective, the audit process is the same for both, with notably slight differences in the procedures. The internal audit essentially focuses on the internal assessments and procedures to rectify and prepare an authentic report. On the other hand, External audit is engaged on a very defined scope which often leaves internal audit within limits. Thus, both audits carry out the procedure in different stages and directions.
Read more: Top roles and responsibilities of internal auditors in UAE
We are a top-notch Audit firm in Dubai that cultivates excellent internal and external audit services. We lay hold of clients’ demands and manage financial statements effectively. We have over 30+ years of experience in providing premiere audit services, in compliance with UAE law.
Kasun Liyanage is an Audit Manager with over 7 years of experience dealing with diversified corporate clients. He not only manages the team’s work schedule but also is an expert in handling audit areas such as external audits and fraud investigation, Internal control benchmarking and best practices and well as preparation of financial statements and IFRS compliance.