- June 17, 2020
- Posted by: Dhivya Krishna
- Category: accounting, audit
Audit Firms in UAE
The auditing process and the service of the audit firms have become an integral part of the industrial set-up. Hence, accounting and book-keeping serves as the basis of any financially stable endeavor. The audit firm’s services have risen to grave importance because in a competitive market. The business must be incorporated with the most updated methodologies regarding management, financial records, and judicious use of resources.
The business is to be considerate of the fact that they have to completely devoid of any legal trouble that may harm the reputation of their enterprise. The auditors make sure that the company does not involve itself in any form of tax fraud or has undertaken activities contrary to the guidelines provided by the legal authority.
The UAE has a market considered to be a gold mine and rising endeavors keep the market extremely active. To survive the sky-rocketing growth of competition, the companies must establish their credibility in the market. The audit and auditor’s report serve as the basic forms of accreditation that investors, legal authority, and bankers look at. Therefore, the audit certifies a company’s financial stability and an audit always concludes with a report for the betterment of the establishment.
The mainland operations in UAE are liable to submit their annual audit reports within 3 to 6 months from the date of closure of their financial year.
The free-zone authorities have issued guidelines stating the necessity for the preparation of an audit report for the companies located in the free-zone. But there is no obligatory rule of submission in these zones. Though submission is not obligatory the audit is mandatory and records and audit reports may be sought after by the legal authorities on a notification.
The UAE commercial Company’s law states the mandatory necessary for the companies to maintain their financial records for a period of up to 5 years which includes all the audit reports.
Federal Law No. 2, Article 27, Chapter 2 as issued under the UAE commercial company’s law. Urges all the establishment for the audit process and are liable to appoint an auditor approved by the Ministry of Economy to carry out the same.
The Audit Firms in Dubai offer establishments with the service of approved auditors/CPA. The accounting and auditing services are becoming the key to forms of financial and management firmness of the enterprises.
Administrative Factors of Audit Firms:
The variation in the financial viability and feasibility in the small scale industries can be a causative factor in possibly avoiding recruiting professional and efficient accountants for full-time service. These SME companies may have issues regarding proficient book-keeping and financial records. The possibility of having a CFO in such industries are not feasible and sustainable to these small capital bases-businesses.
But the taxation laws and necessity of the auditing are still obligatory and have to be duly pursued. The auditors appointed by the auditing firms on request of service are a much me feasible temporary option for them and with prevalent updates provided by the auditor regarding financial notions are helpful for the establishments to enhance their endeavor’s dimensions.
The large scale industries have the necessity for the audit firms to maintain and trace out incongruities in the plethora of records they hold which can be caused by negligence in big endeavors.
Even a minimal amount of mismanagement multiplies quickly becoming a serious financial threat in a later scenario. Such possible risks, fraudulent activities, and tax frauds have to be found and eliminated and often can go unnoticed if the company only depends on internal audits. Added to the factors, the government enforces the need for external/statutory audit, and thus audit firms are closely associated with issuing the credibility of an organization and also providing with a risk assessment.
Sign of Approval:
The legal guidelines relevant in the jurisdictions have made external audits mandatory on an annual basis. The audit reports and the records of financial stature help legal authorities to validate a company’s performance. Hence, they their satiation is necessary for the establishment’s smooth persistence.
The FTA forms the basic guidelines of taxation and commercial law. The auditors make sure establishments meet these guidelines to avoid legal complications. The Department of Economic Development helps with the incorporation of any endeavor in the UAE. It also plays a major role in ensuring compliance with all the necessary factors by checking audit submissions.
Help With Capital:
Additionally, any enterprise that wants to expand its horizon with increasing market cap or infrastructural advancements require huge capital sum. These companies receive such capital from the banking sectors. The bankers often look for the eligibility of any applicant that has applied for credit or other financial assistance. For instance, in case of business or industrial endeavors their current market stability is their collateral. The bankers need the audit report for the confirmation of any claims. Hence, these reports serve as a proof of credibility that bankers and officials need.
Not only bankers, possible investors for SMEs also seek for their financial records that majorly mean their audit reports. The audit reports of any establishment serve as a piece of documentation that is vital in the country’s future endeavors. The auditor’s function, therefore, does not limit itself to the assessment of the financial records. Rather, it helps with the regulatory and performance audits that seek to improve the overall function of the company. Such improvement includes management skills, employee regulation, resource utilization, water conservation, energy conservation, frauds, and operational policies.
The auditors suggest and make sure the company advances in several key aspects. They also help keep the company from falling into the possibilities of bankruptcy, insolvency, or liquidation.
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