How to Prepare for an Audit of your Financial Statements

It is essential to conduct audits of financial statements for businesses to maintain accuracy, transparency, and compliance with financial regulations and standards. Thus, it is imperative for businesses to seek the expert services of top audit firms in UAE to seamlessly audit financial statements and to stay compliant. 

The Significance of Auditing Financial Statements

An audit of financial statements is an examination of an organization's financial statements and accompanying disclosures by an independent auditor. The purpose of the audit is to express an expert opinion on the transparency and credibility of financial statements and disclosures, following generally accepted accounting principles (GAAP).

How to Prepare Financials for Auditing in Dubai?

Corporations conducting business in Dubai need to have their financial statements audited and it is imperative to ensure that the financials are in order. Below are some tips on how to prepare financials for auditing in Dubai:

1. Understanding the Regulatory Requirements

Primarily, the auditor reviews the corporation’s books and records, as well as any supporting documentation to ensure that the financial statements are free from material misstatement. Notable regulatory requirements must be met to effectively conduct an audit. These requirements may vary depending on the jurisdiction in which the entity operates, these include:

• Appointment of an independent auditor
• Audit committee oversight
• The establishment of internal controls and all documentation should be accurately up to date.  

Thus, to prepare for an audit, it is essential for the corporation to primarily review the applicable regulatory requirements to have an in-depth understanding of the organization’s requisites that has to be met.

Read More: Top tips to prepare for financial audit

2. Identify the Auditor, Scope, and Objectives

Prior to preparing for an audit of financial statements, it is important to identify an accredited auditor, the scope of the audit to be conducted and the respective objectives. The auditor is the independent expert figure who looks into the financial statements and assesses if there is any discrepancy and credible representation of the company's financial position. The scope includes the range of activities that will be covered in the audit and the objectives are the end results that the auditor achieves during and at the end of the audit.   

3. Review the Corporation’s Processes and Controls

Reviewing the corporation’s processes and controls assists to identify any areas where improvements can be made and to ensure that all documentation is up-to-date.

Key essentials to keep in mind when reviewing the corporation’s processes and controls:

• It is essential to ensure that all documentation includes and keeps track of any changes that will be made to the corporation’s accounting software or financial systems.
• Review your internal control procedures to ensure they are still effective. If you have made any changes to your business operations, UAE's top audit firms make sure that these changes are reflected in your internal controls.
• Evaluate your risk management procedures. Identify any areas where you may be exposed to risk and put measures in place to mitigate these risks.
• It is essential to keep updated on changes in bookkeeping principles and guidelines. 
• It is imperative for a qualified professional to review controls regularly. An independent perspective helps to identify any weak spots in internal systems and makes recommendations for improvement

4. Collect and Review Documents, Policies, and Contracts

When preparing for an audit of your financial statements, it is important to collect and review all relevant documents, policies, and contracts. This gives the auditor a complete understanding of the corporation’s financial situation and can accurately assess any risks.

5. Communicate Regularly with the Audit Team

It is very important to communicate regularly with your audit team or respective audit firm in Dubai. This ensures audit processes go smoothly and timely submission of requisite information and documentation.

Some key details that should be kept in communication with the audit team include:

• The corporation’s financial statements and any changes or updates to them.
• Any new accounting policies or procedures that have been put in place
• Any significant transactions or events that have occurred during the year
• Any progressions in your business construction or tasks

Read more: The impact of IFRS 16 on financial statements

Enhancing Financial Statement Transparency

For financial statements, transparency is key. Below are a few tips to enhance the transparency of financial statements prior to conducting an audit:

1. Keep detailed records of all income and expenses. This assists to identify any discrepancies or areas of concern when reviewing financial statements.
2. Make sure all transactions are properly documented and recorded in your accounting system. 
3. Review your financial statements regularly, this helps to note any errors or inconsistencies that may occur over time.

Tips for Choosing an Audit Firm in Dubai

When choosing an audit firm in Dubai, there are notable components that have to be considered. Below are a few tips to consider when choosing an audit firm:

• Ensure that the firm is registered with the Dubai Financial Services Authority (DFSA).
• Choose a firm that has experience auditing companies in your industry.
• Ask for references from other companies who have used the firm's services.
• Make sure the firm is independent and unbiased.
• Get statements from various firms prior to going with your choice.

Seek the expert services of top Audit Firms in the UAE

It is imperative to seek the expert services of top audit firms in Dubai to seamlessly audit financial statements and to stay compliant with financial regulations and standards. Thus, contact us today and we shall be glad to assist you!