Discover the types of audits in the UAE, including internal, external, and VAT audits. Learn how BMS Auditing helps businesses ensure compliance, financial accuracy, and transparency to support growth and regulatory adherence.
Dubai businesses are mindful of audits as part of their operational framework to ensure financial sustainability. Every year, audits are done on a company to give an overall assessment of its financial position and its conformity to the rules and regulations to be followed. Find below all you need to know about audits and their types, including the activities of BMS Auditing.
What is Auditing?
Auditing is the examination of a company's financial records and internal controls through, among other things, the approval of auditors in Dubai. It includes physical inventory checks to verify whether all departments are following the instituted documentation method. The bottom line is ensuring that the financial accounts are correct and within commercial regulations.
There are two major types of audits:
- Internal Audits: Internal audits can be carried out by external firms, like BMS Auditing, focusing largely on reviewing a company's internal operations and processes.
- External Audits: External audits are objective evaluations of a company's financial statements and records, performed by independent auditors to ensure accuracy and compliance.
The purpose is to give an objective examination of the accounts to ensure that financial statements are correct and do not hold any false representation or fraud. All companies should conduct audits before publishing quarterly financial reports so that they comply with the mandatory legal provisions which, otherwise, may attract penalties.
Types of Audits
Audits can be of various types and nature. Some of the most common audits conducted include the following:
External Audits: External audits involve independent auditors reviewing a company's financial records to verify accuracy. Their reports provide stakeholders with insights into financial health, and operational controls, and help assess investment opportunities.
Internal Audits: An internal audit is one initiated by the owner of a company and conducted by internal auditors. In such an audit, the shareholders and board members are always updated on the finances of the company, hence ensuring that financial targets are set and whether systems are correctly operating.
Tax Audits/VAT Audits: Tax audits aim to carry out a probe of a company's verification to ensure that all tax regulations are satisfied. This includes checking a firm's accounting record, VAT return submission, and overall tax planning and ensuring all tax charges are met correctly.
Risks Posed by Unaudited Financial Statements
- No Independent Verification: They lack the independent verification of an audit, leaving room for potential errors.
- Risk of Bias: Prepared by management, they may be influenced to present a favorable view.
- Limited Scope: They often focus on core data, missing key information needed for informed decisions.
- Greater Chances of Mistakes: An audit does not occur, and greater chances of misstatements exist, whether intentional or otherwise.
- No Auditor Opinion: Unlike audited statements, they are not issued with an independent opinion on their fair presentation of the financial information.
The Benefits of Having Audited Financial Statements
For any company planning growth and success, financial transparency is of utmost importance. Audits ascertain that all of the financial transactions are done completely on record and thus provide an accurate image of a firm's financial standing status. BMS Auditing can provide organizations with periodic audits for:
- Demonstrates transparency: builds donor, volunteer, and sponsor confidence.
- Satisfies Grant Makers: For it satisfies the grantmakers by showing financial responsibility.
- Complies with Contracts: Meets audit requirements for lenders and contractual agreements.
- Reduces the risk of fraud: It detects fraud susceptibility and is a deterrent to alerting the organization.
- Identifies Improvements: Highlights inefficiencies, overspending, and areas for growth, supporting strategic planning.
- Supports Organizational Growth: Provides insights for major business decisions and regulatory compliance, driving long-term success.
Why BMS Auditing is Your Auditor of Choice
One thing a business, big or small, must do is hire an auditing firm, especially if its financial records contain inconsistencies. Whether it's a startup, an SME, or a big corporation, BMS Auditing can bring your financial operations up to corporate laws.
BMS Auditing can assist in the following ways:
- Organizing your financial records
- Recommending how to cut costs and build up profits
- Operating according to regulatory requirements
How BMS Auditing Can Help Your Organization
BMS Auditing is one of the leading auditing firms, catering to all your auditing needs. Here, our auditors are completely dedicated and committed to offering you transparent, accurate, and reliable auditing solutions. We will help you organize financial documents for tax purposes, hence making sure that the records maintained are exact.
