- Mr. Waseem
How Many Auditing Standards Are There In UAE?
Every business institution worldwide is covered with financial practices for better functionality of the company and every fiscal year auditing is required. Read on to discover why your UAE business requires auditing services and how adhering to global auditing standards can boost your business and develop it.
What Are The Auditing Standards?
- 1. Auditing Standards in Dubai:- The UAE Commercial Companies Law 2015, which took effect on July 1st of the same year, mandates that all businesses adhere to generally accepted international accounting principles when keeping their books. Accounting standards generally accepted in Europe (IFRS Standards) were previously required by Dubai's Companies Law.
The accounting records of businesses operating in the United Arab Emirates follow a variety of standards and formats due to the wide range of industries represented there. Here, a couple of the most popular norms are IFRS (International Financial Reporting Standards) and GAAS (Generally Accepted Auditing Standards).
- 2. International Standards of Auditing in Dubai:- When discussing the responsibilities of independent certified auditors in Dubai, one must look to the internationally recognised standards for auditing. This set of guidelines is published by the International Federation of Accountants (IFAC) via the International Auditing and Assurance Standards Board (IAASB).
The primary purposes of auditing norms established at the international level are:-
Improve the quality of corporate financial reporting in the country by helping to develop and implement a national action plan for institutional capacity enhancement.
Analysis of the strengths and weaknesses of the institutional framework to support high-quality financial reporting, including a comparison of national accounting and auditing standards to international norms and an evaluation of the extent to which relevant auditing and accounting standards are followed.
Types of Financial Audit in Dubai
Compliance with international standards for financial auditing encourages meticulous record-keeping and reporting of all monetary commitments, authorizations, acquisitions, and expenditures. Purposely looking into the controls in place for cash and assets that can be easily converted into cash, as well as confirming that there are adequate controls over the acquisition and use of resources is the focus of a financial audit. Internal financial audits may not provide independent expert testimony regarding the fairness of the financial statements when compared to external financial audits. For this reason, when conducting a financial audit of their company, most companies in the UAE use GAAS.
Generally Accepted Auditing Standards (GAAS) are a set of rules and regulations that form the basis for how auditors approach audit planning, execution, and reporting.
At the end of each fiscal year, companies operating in Dubai must submit their financial records to the relevant authorities in accordance with Generally Accepted Accounting Principles (GAAP). Financial statements of publicly traded companies in Dubai must be audited by certified public accountants to ensure they follow GAAP. For the purpose of ensuring accuracy and conformity with GAAP, auditors examine a company's financial records and accounting procedures.
Despite the fact that auditors in some countries may be required to adhere to additional principles or standards, the GAAS are widely used as a cornerstone of auditing practises worldwide.
What are the Audit Procedures in Dubai?
When auditing a company, authorised auditors in Dubai use internationally accepted practises. There are only two basic steps involved in conducting an audit:
- 1. The audit process kicks off with a notification informing the auditee of the audit's start and end times.
- 2. The next step before an audit is for the auditor to conduct planning to determine where the biggest risks and concerns are likely to lie.
- 3. At this point, management and auditors meet multiple times to discuss the issues that need to be resolved.
- 4. The fieldwork that follows then starts to direct the ultimate audit strategies.
- 5. After identifying business procedures, conducting sampling tests of current business practises, conducting a legal analysis, interviewing key staff members, and verifying consistency in internal rules and procedures, the audit staff notifies the employees and creates a schedule for the audit staff's activities before beginning the initial investigation.
Audit Process Completion
- 1. After the audit is complete, the next step is to create the draught audit. The draught is made available to management so they can review it, make suggestions for improvements, and fix any issues they find.
- 2. Once the report has been received, the management is expected to respond with an explanation of whether or not they share the report's concerns, a plan for addressing each issue, and an estimate of when the work can be expected to be completed.
- 3. It is expected that any loose ends will be wrapped up, the management's response will be reviewed, and the audit scope will be discussed at the final meeting before the final audit report is sent to appropriate officials both within and outside the audit area.
- 4. The final phase of an audit would be the audit feedback, which entails implementing the suggested changes and evaluating and verifying the efficacy of these adjustments.
What are the Audit Reports in Dubai?
If the financial statements have been prepared in accordance with Dubai's generally accepted accounting principles, the auditors' reports will indicate as much. The auditor is obligated to call attention to any instances in which these principles were not adhered to consistently in the auditing report.
According to the international auditing standards in Dubai, an auditor is required to note in the audit report if they find that the financial statements' informative disclosures are not at least substantially acceptable.
What are the Benefits of International Standards Audit in Dubai?
When a company is founded with the goal of steady expansion, resilience becomes an essential ingredient. To achieve that state of harmony, sustainability, and resilience, a corporation needs a wide variety of internal and external controls.
There are firms in Dubai that provide auditing services to private companies, ensuring that their books are balanced and their operations are in line with best practices in the industry. One of the best ways to ensure compliance with international auditing principles in Dubai would have been for businesses to follow a single set of principles when performing a financial audit, as outlined by the International Standards for Auditing (ISA).
Internal and external audits will now have a universal standard to which all businesses and professional auditors must adhere. It also facilitates the auditor's use of a unified set of standards when dealing with multinational corporations. To maximize growth and profit, businesses need audits that are thorough, transparent, and accurate in order to identify internal fraud without causing any issues in the business.
Conclusion:- Auditing standards are important to follow for your business growth and this article is designed for the same and still if you are still confused a lot then get the best audit services in UAE and solve your problems in a perfect manner!