Auditing is a process of evaluating an organization's financial and operational activities to ensure that they comply with laws and regulations. It is an important function in any organization, as it provides transparency and accountability.
There are two main types of audits: internal audits and external audits. Many audit firms in Dubai offer quality services. However, it is important to choose from top audit firms in Dubai that have a good reputation and experience and will be able to meet your specific requirements.
All organizations in Dubai are required to have an internal audit function. The purpose of this article is to guide how to make an internal audit report in Dubai.
The internal audit process evaluates issues relating to firm business procedures and risks, whereas the external audit process evaluates financial records and offers an opinion on the company's financial statements. Internal audits are carried out all over the year, whereas external auditors carry out a single annual audit.
What is Internal Auditing?
Internal auditing is an independent procedure, unbiased assurance, and consulting activity intended to improve the effectiveness of the organization’s strategy. It instills a methodical and controlled approach to the company’s financial performance. It is a review of the internal controls, risk management, and governance practices of a business.
Advantages of Internal Auditing in Dubai
- By enhancing efficiency while maintaining strict control over operations, internal auditing supports the establishment of efficient management in the company.
- Simplifies the final auditing process by resolving inaccuracies and frauds discovered in the books of accounts.
- Improves employee performance in the company because any errors are corrected right away.
- It hides the weakness of the firm and aids in the methodical identification of risks.
- Serves as a useful tool for cutting costs and maximizing resource use.
- The organization uses a system of continual review to identify and correct any problems.
Read more: Responsibilities of Internal auditors
What is an Internal Audit Report?
A formal report detailing the findings of an audit is known as an internal audit report. The internal auditor uses it to demonstrate what was looked at, emphasizing advantages, issues, and conclusions so that management may see what is working well and what needs to be corrected.
An effective internal audit report encourages readers to follow the recommended actions by clearly communicating the goals, parameters, and conclusions of an auditing process.
Steps to Create an Effective Internal Audit Report
First and foremost, you must acknowledge that you are aware of the report's goal. What aims does internal auditing have? You can begin gathering the required information after you are aware of the report's objective. Numerous sources, such as financial documents, personnel interviews, and business records, can provide this information. The stages listed below have to be followed to complete the internal audit report process:
The Planning Stage
The planning stage is where the internal auditing process begins. A meeting is planned to go over the audit process, scope, objectives, risk factors, and other topics with the primary organization contact. The clientele clarifies the objectives and other information to the auditor during this stage. To move forward, every element is thought out and documented.
Fieldwork Stage
The steps outlined in the planning phase are repeated in this step, including interviewing people, examining legal guidelines and best practices, and confirming sample transactions. On the data gathered regarding the business activities, the internal auditor conducts transaction testing. Testing confirms that controls that were found to be operating properly during the preliminary examination are doing so.
Risks associated with the system are investigated and assessed. During this stage, the auditor shares the major results with the client for evaluation. During this phase, there will be constant communication between the auditor and the clients.
Read more: Top reasons to outsource internal audit services in Dubai
Providing Reports
In this stage, internal auditors create an internal audit report. Clients prepare a draft report that includes conclusions, judgments, and suggestions. The audit customer reviews the report and offers observations, remedies, or other changes along with a timetable for completing the improvements. At the conclusion, a record of each response is made and given to the appropriate authority.
Follow-up Phase
The auditor conducts a follow-up to ensure that the suggestions have been implemented as planned. Unfulfilled plans are notified to the higher authority each year.
Internal Auditors in Dubai
Organizations face emerging risks in today's challenging global business environment that pose a threat to old strategies and assumptions. The top audit firms in Dubai focus on providing independent, objective support for the design, implementation, and operational efficacy of controls when delivering internal audit services. Therefore it is always preferable to go for an independent AFD providing quality internal auditing services.
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.
