- June 13, 2020
- Posted by: Dhivya Krishna
- Category: accounting, audit
Audit firms providing essentially professional auditing services is one of the major concerns of the global investing hub, Dubai. Companies need to make sure they account for and pay all the taxes. Some of the most important ones are the Value Added Tax (VAT), port duties, and personal taxes. A clean financial record is essential for the smooth functioning of the establishment and any such anomalies which may disrupt the organization’s growth has to be identified, rectified, and eliminated.
Audit firms present in each jurisdiction help various organization’s to maintain the monetary records and apart from the need for such a process for taxation, an audit also helps to identify fund mismanagement within the organization and therefore enhances the company’s prospect to grow financially sound.
Services of the best audit firms are necessary for proficient auditing, and a perfect audit is key to maintain a stable financial account of the company which holds the panorama to lure more investors to the company’s endeavor.
To be lawfully accurate, an audit is the official inspection of the financial records of a given establishment. It helps check for discrepancies regarding the monetary funds received and spent. Also, audits help to check the possibility of any tax fraud.
The Federal Tax Authority holds the power to conduct Statutory Audits and can penalize the company for malpractices if found. An external audit by professional audit firms mentioned in list of audit firms within the company’s jurisdiction help gauge the company’s policies and financial position.
Statutory audits occur under the directive of the Federal Tax Authority. The FTA can sanction a statutory audit for any company, if they feel it is necessary. They also do not need to produce documented intentions for the same. If they identify any malpractices or mismanagements through a statutory audit, the legal authority has the clout to issue a penalty. Additionally, such a penalty can severely harm a company’s reputation and goodwill with customers. Therefore, to avoid any unintended irregularities within the financial records of the company, regular internal audit is necessary and a proficient external audit considerably helps with marinating a healthy record of the company’s ledgers. Invoices, bank statements, etc.
Audit Firms in UAE:
- FTA may have an audit process conducted on the premises of an establishment they find it necessary to be. This audit is set apart from the internal audits approved by the management. These audits occur as per the guidelines provided under VAT laws and Excise Laws.
- FTA conducts an audit after issuing a notification to the organization and can conduct the audits on the premises or may request submission of the relevant and necessary documentation.
- The notification will be given at least 5 days before the audit.
- Authorities will square the returns and to avoid any predicament the companies may conduct their audit for filing tax at the appropriate period.
- After their audit, a report will be filed which may include violations if any found and may decide a penalty for the same.
Audit Procedure and Documents Required:
External audits are proved to be essential and various audit firms in Dubai help with the process, nevertheless it is necessary to find out the auditing firm that best suits your need and can provide service conferring with jurisdictional specificities and guidelines.
- The notification for a statutory audit usually comes 5 days before the audit. However, for external audits, the company and the authority can agree on a date after negotiation.
- With the issuing of the date, the process of forming the audit strategy begins. The strategy chosen should align with the decree of the federal authority as well as the company’s policies.
- Test of Controls is necessary to evaluate the record-keeping protocols which also shall govern the factors that may lead to mismanagement.
- The companies must also provide previous audit reports to help the present audit firm prepare.
- The UAE Commercial Companies Law directs all the establishments within the jurisdiction to maintain their financial record to a minimum of 5 years. This helps in continuous evaluation and helps in identifying growing incongruities.
Preparation of Audit Records:
- Firstly, for mainland operations, external audits are a necessity. Therefore, companies should produce and maintain their audit records efficiently.
- Secondly, to gauge internal operations, auditors might need to take employee interviews. Such talks will help them evaluate the firm’s functioning, efficiency and operations.
- The establishment should submit all tax invoices received and issued, ledgers, bank statements, import and export duties’ records, investment records, and expenditure records.
- The evaluation checks for proper tax return records and ordered payment records, and embezzlements shall also be identified with the incongruities within records and statements.
- Once the auditors go over all the findings, they create an audit report accordingly.
- The audit report shall also carry all necessary corrections and propositions for the company to implement.
- Once the auditors finish the audit report, they call for a consultation meeting to discuss the findings. The company and audit firm then work together to improve the financial vigor of the company
How much do the firms charge for VAT and audit services?
VAT is fixed at 5% by the government. The registration processes and filing will be according to the company ledgers, profits, and statements. After the prospecting evaluation of the records by the firm, an estimation can be reached.
The charge of the service provided by various firms differs. A conclusion requires the contemplating of all the company’s demands and added services delivered.
How long will it take to complete an audit?
The expanse of an audit can vary from one month to three months. Essentially, the expanse or duration depends on the expanse of the company. It includes the time from initial strategy formation, fieldwork to the preparation of the final report.
What are the best audit firms in Dubai?
There are various audit firms in the expanse of Dubai which can help provide the auditing services a company needs. KGRN is a leading audit firm providing a stretch of auditing services. The company is also one of the best in the state.
The reports of KGRN audit firm are acknowledged in banks throughout the UAE and provides the companies with the proficient service of recognized and authorized auditors.