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External Audit

External Auditor Responsibilities in Dubai, UAE

Regular auditing and account maintenance contribute significantly to the success of a business. Audit firms in Dubai ensure your company’s compliance with UAE accounting laws. For auditing the accounts of a company of any size, regardless of industry, an approved chartered accountant firm licensed & registered with the Ministry of Economy is required according to UAE Commercial Companies Law/Federal Law No. 2 of 2015.

What is External Auditing?

The external audit process of the financial statements is an important function in corporate governance and a cornerstone of good corporate governance practices. The external audit firms in Dubai carry out the work of externally auditing the financial statements of the client company and provide their unbiased judgment based on the findings in those financial statements.

During the external audit process, an organization's financial data is verified for accuracy and reliability by an external auditor.

What are External Auditors?

External auditors are independent accountants who operate outside of organizations. A company's financial records, including payroll, purchasing records, spending reports, inventory, tax payments, accounts payable and receivable, and more, are objectively examined by an external auditor who serves as a third-party consultant. They check for financial mismanagement brought on by fraud, negligence, or embezzlement and suggest the best ways to fix them.

Responsibilities of External Auditors in Dubai, UAE

Ensuring Adherence to Government Regulations

For the financial dealings of small, medium, and large-scale firms, the UAE government maintains strict legislation. Therefore, if you are operating a business in the UAE, you may require the assistance of external auditors who can carry out the annual audits required for the annual renewal of your trade license. 

Since the UAE government began imposing a VAT tax in 2018, effective accounting and auditing are essential to ensuring compliance with the law and minimizing the risk of needless legal troubles.

The Requirement for Expertise

All businesses might not be able to afford to hire an auditor full-time. Thus, the majority of businesses seek out external auditing services. These auditors can regularly check your financial statements for compliance and identify any issues. They may also propose adjusting the operation to avoid the dangers by boosting cash flow, reducing interests, depreciating assets, and other measures. They could support overall profit optimization.

Boosts Financial Credibility

The top external auditors in Dubai assess your business's financial transactions to make sure they are correct and in accordance with the country’s regulations. When you request loans and financial aid from banks, a legitimate audit report by a licensed professional auditor is crucial to demonstrate trust. Therefore, choose the best auditors in Dubai to ensure your future is worry-free.

Fraud and Malpractice Prevention

There may be fraudsters working for your company, and their wrongdoing frequently goes unreported. When it is exposed, it will be too late and your business will have suffered irreparable damages. Therefore, using external auditing services might assist you in identifying any fraud or financial misconduct. Your financial statements can remain streamlined and transparent with routine auditing by an auditor.

Making Sure that Financial Data is Accurate

To help you analyze the current status of your business, including whether it is profitable or operating at a loss, what changes need to be made in the current functioning, and so on, your accountant regularly provides financial information that must be verified by a professionally certified auditor.

Read More: Frequently Asked Questions on Auditing in Dubai

Conclusion

The external audit process is a critical component of any business's successful operation. It provides an opportunity to evaluate the financial health of your company and identify any potential problems that could impact the future viability of your business. By taking advantage of the expertise of external audit firms in Dubai, you can be sure that your company is being properly managed and monitored.