Six Useful Audit Tips for the Small Businesses in the UAE

Maintaining the books of accounts and having audited financial statements have become more important than ever since the introduction of new regulatory reforms in the UAE. Except for a few free zones, submission of audited financial statements was not mandatory either in the mainland or in free zones in Dubai. However, as the corporate tax takes effect on June 1st 2023 most businesses will be required to maintain their books of accounts and some of them may need to (especially the Free Zone Persons) have audited financial statements to claim tax exemptions.

Unless it is a legal obligation or a requirement from investors or lenders, most SMEs prefer to skip the annual audits in Dubai. Most SME owners fret over the thought of having their books scrutinised by audit firms in Dubai. However, audits reassure your investors, lenders, and government authorities of your business’s financial situation. Auditors in Dubai help you ensure that you follow the mandatory compliance requirements apart from protecting your organisation from potential fraud. The following tips can help SMEs survive an audit in the UAE:

1. Get Organised Quickly

Audit firms in Dubai, once you hire them, will send you a list of requirements a few months before the scheduled audit. You should examine this list and start gathering the documents and keep them in an easily accessible location. It can be a centralised storage or drive, management software, or physical file cabinet. You must ensure that the documents are stored in a format prescribed by the auditors.

2. Maintain Orderly Records Via Routine Upkeep

The evaluation of your financial statements will be completed faster if the auditors start with precise and consistent data. However, the audit will slow down if the auditors have to wade through chaotic records or look for reconciled items. You can avoid this by keeping pace with critical accounting activities such as keeping your records in order.

Do not hold over the reconciliation of bank accounts or make inventory adjustments until the last minute. Gather as much information as possible including amounts, dates, clients engaged, justifications for adjustments etc. and make them accessible to the auditors in Dubai. If it seems to be a daunting task, you can outsource the responsibility to an accounting & bookkeeping firm. It will save time for you and the auditor apart from minimising disruption for your staff.

3. Keep Auditors Informed

Once you hire the right one from the numerous audit firms in Dubai, it is advisable to keep in touch with them year-round. Furthermore, it is necessary to communicate with the auditors before accepting a big contract or doing anything unusual. If the auditors have prior information, it will save them time and allow them to assist you in arranging agreements efficiently.

4. Use The Right Tools

Using the appropriate tools enhances efficiency and saves the auditor’s validating figures. For example, a company having a point-of-sale facility that immediately uploads transactions to the ledger account can be more efficient than a company without one. Using a robust accounting system and software will allow the auditors to access and run reports in real-time. It is essential for saving time and showing the auditors that you have nothing to hide.

You can use automated bookkeeping if your business is growing and your books are becoming more complex. Artificial Intelligence and auditing are essential parts of the accounting landscape, and with the right support, you can bring innovative solutions to the table.

5. Separate Business from Personal Accounts

All business owners, including small business owners, must keep their business accounts separate from their personal accounts. If you are yet to follow this key accounting recommendation, you must start practising it now. It could help to avoid confusion and discrepancies – whether intentional or not – as you start preparing for the audit.

6. Keep an Audit Trail

Preparing an audit trail or an audit log is necessary for SMEs to easily navigate an audit. An audit trail is a sequential record of the history and details of a financial transaction, work event, product development phase, or financial ledger entry. Keeping an audit trail will provide you with a documented history of a transaction so that the auditors can manage it easily while tracing the financial data. An audit trail is the best indication that the financial records of your business are well-managed.

Hire the Best Audit Firms in Dubai, UAE

Annual audits can be a time of anxiety for small businesses but entrepreneurs can navigate them easily by using the tips listed in this blog. Additionally, hiring the best audit firms in Dubai such as Jitendra Chartered Accountants (JCA) can make a big difference. JCA is one of the top auditing companies in Dubai with years of experience. Apart from audit services in Dubai, JCA also offers bespoke services such as accounting, corporate tax advisory, VAT compliance, Economic Substance Regulation (ESR) services, and Anti-money Laundering compliance service