External Audit

A statutory audit or an external audit is an independent evaluation of all the financial records of an enterprise. The execution of this comprehensive audit is essential as it provides a complete overview of an enterprise’s financial standing. Moreover, financial statements issued by a statutory audit suggest whether the business is following the “true and fair” means of financial dealings in the UAE or not.  These audits are performed by independent auditors who present the audit report to all the UAE authorities, banks, shareholders, and the public.

Hisab Taskmaster CAdvisors is one of the leading providers of statutory audit services in Dubai, UAE. Our certified and qualified auditors and accountants carry out the auditing procedure as per the International Standards on Auditing and follow all the ethical guidelines issued by IFAC. Therefore, businesses can trust us with their annual audit for all departments and areas involved in their business.

What is an External Audit or Statutory Audit

A Statutory Audit is a financial assessment of a company that is mandated by law. This comprehensive audit verifies if the company’s financial statements are accurate and follow the rules set by the government. In the United Arab Emirates (UAE), companies must prepare their financial records based on International Financial Reporting Standards (IFRS). This kind of audit is usually done by professional auditors and not by the company’s directors or managers.

Why is an External Audit or Statutory Audit Important?

Statutory Audit or External Audit plays a key role in the overall business success. Here is why it is important:

1. Makes Financial Reports More Trustworthy

The statutory audit assures authorities in the UAE that the company’s financial records are correct. This helps to build trust for the individuals who are dependent on the key information like company leaders and investors. Through statutory audit reports, they can make smart decisions based on accurate data.

2. Ensures Management is Doing Its Job

A statutory audit examines whether the company’s management is handling its responsibilities adequately or not. If they are not, then it could damage the reputation of the company, affect its profits, and threaten investors. 

3. Meets Legal and Government Requirements

The UAE authorities require companies to follow some specific rules. A statutory audit makes sure that the business is following these rules, which further helps to safeguard both the company’s and the government’s interests.

4. Helps Management Understand the Business Better

Auditing aware managers on how different elements of the business are working. This understanding helps them to make reliable strategies for the future growth of the business. 

5. Makes It Easier to Get Loans or Credit

A clear and accurate audit report builds trust with banks and lenders. This makes it extremely easy for the company to borrow money or get other financial support. It also boosts investor confidence in the company.

6. Reduce Business Risks

Since the auditor reviews how the company operates, they can point out problems and offer solutions. This lowers the chances of financial or operational issues in the future and helps the business reach its goals.

Documents Needed For Statutory Audit in Dubai, UAE

To carry out an accurate and unbiased audit, statutory auditors usually need the following documents:

• Fixed Asset Information:  Auditors need records of fixed asset acquisitions, including receipts and invoices, to accurately compile the balance sheet and other financial statements.
• Bank Account Information:  Auditors need complete bank transaction records in the company’s name for audit verification.
• Payroll Data:  Payroll documentation is essential to know salary payments, expenses, and tax obligations.

Benefits Of An External Audit

• Comprehensive Report: The performance of the company’s overall operations is presented in the external audit report. An external auditor likewise ensures that the information accuracy in the accounts books is unavoidable. This would help management to consider action towards any wrong procedure which would be found in the report.

• Identify The Weakness: The external auditor does work on all methods and controls the organization’s environment. By external audit, weakness within the organization, particularly accounting systems, that being recognized. Along with this, an external auditor would create recommendations as to how to create a business very efficient and less risky of fraud. 

• Confirm With The Law: the external auditor does work on the account books of the organization, ensuring that they are following the laws and regulations of the respective authority. Likewise, they would ensure that the company’s accountants are updated with the same laws and regulations of the respective authority and government.

• Save Time And Resources: with the external auditor report’s help, the organization’s irrelevance can only be ascertained, and through it, this would become easier to find out where the task in particular needs improvement. Due to this, time and resources will be less likely to be wasted.

• Unbiased: the external auditor has no direct connection to anyone within the organization. The audit report would be unbiased or impartial.

Our Statutory Audit Process in Dubai, UAE

The process followed by a statutory audit firm in Dubai, such as Hisab Taskmaster CAdvisors, generally involves the following essential steps:

• Appointment of the Auditor: During the company’s general meeting, independent and qualified auditors are appointed to execute the comprehensive statutory audit responsibilities.
• Engagement Acceptance: After the appointment, the auditors from Hisab Taskmaster CAdvisors review and accept the audit engagement and confirm our readiness and independence to undertake the assignment.
• Development of the Audit Plan: Our auditors begin a structured audit program, which includes a detailed evaluation and planning phase where all relevant company data, departments, and financial systems are carefully evaluated.
• Collection of Audit Evidence: Hisab Taskmaster CAdvisors auditors proceed to collect substantial audit evidence by verifying financial records, transactions, and physical assets. This guarantees accuracy and transparency.
• Audit Reporting: After completing the review, our team compiles the findings into a comprehensive audit report. This report is then formally presented to shareholders, authorities, and relevant stakeholders.

Common Challenges in Statutory Auditing

Here are some key hindrances that can cause several challenges in statutory auditing:

• If there are any incomplete or incorrect financial statements, it can lead to delays or discrepancies.
• Auditors need to be aware of all the latest local and international laws, such as IFRS and UAE-specific protocols.
• Extremely complex auditing of businesses with complicated financial connections can cause delays in presenting auditing reports.
• Generally, intra-team communication with auditors is less frequent, which can lead to delays in providing the needed documents and views.

How Hisab Taskmaster CAdvisors Can Assist You?

As UAE authorities make it mandatory to carry out statutory auditing practices, the need for reliable auditors has increased. Hisab Taskmaster CAdvisors is a top-rated audit firm in Dubai, UAE, that provides comprehensive statutory audit solutions to businesses of all sizes. We follow an accurate and proven approach to make sure that each element needed for the scrutiny and verification of the financial records is properly documented. Therefore, you can trust us with your business’s statutory auditing solutions in Dubai. Get in touch now!