A Glimpse into Key External Audit Procedures in Dubai
Audit in Dubai is voluntary for mainland companies and mandatory for companies operating in most of the free zones in the emirate. The external audit process is defined as an independent examination of the financial information of a company to express an opinion on its financial statements, representing a true and fair view means that the financial statements are free from material misstatements and represents as per the prevailing accounting standards. During an audit, auditors in Dubai examine a company’s financial records, books of accounts, and documents with applicable laws and regulations. Audit firms in Dubai follow procedures based on local and international standards such as the IFRS.
During an audit engagement, auditors in Dubai collect audit evidence that is adequate and appropriate. To achieve that goal, the auditors always apply various audit procedures. Let’s have a look at the audit procedures adopted by audit firms in Dubai:
What are Audit Procedures?
Auditors use certain processes, techniques and methods to derive an audit objective, which is collectively called the audit procedure. Audit procedures enable the auditors to achieve their audit objective and express an independent opinion on the company’s financials. Auditors in Dubai design the audit procedures to identify all types of risks to ensure that sufficient and appropriate audit evidence has been obtained.
Before the audit process commences, the auditors create an audit plan and procedure. This method helps them to ensure that they can address all areas and risks in the audit procedure. It’s also important to note that the audit procedure may vary from client to client and the year to year in which the audit is conducted. Leading audit firms in Dubai employ the best audit procedures to make the process smooth.
key aspects of Audit Procedures
The standard audit procedures include AEIOU, which is the acronym for Analytical Procedures, Enquiry and Confirmations, Inspection of material items, Observation, and Recalculation & Reperformance. An audit procedure is designed based on various factors, among which obtaining and evaluating audit evidence is the most crucial. Another critical factor is the objective of ensuring the quality and quantity of the audit evidence obtained. Auditors in Dubai also check how the obtained evidence is related to each other. Even though the lion’s share of information received by auditors will be financial, they also look at the non-financial data.
A Look at the Audit Procedures by Audit Firms in Dubai
Audit procedures are key for audit firms in Dubai to conduct a flawless audit. Robust audit procedures carried out by auditors to test the following aspects in a company’s financial statement:
- Auditors check whether every transaction has been recorded in the financial statements, including assets, liabilities, equity, income, and expenses
- Auditors check whether the transactions recorded in the financial statements are related to the company
- Auditors in Dubai will verify whether the transactions are recorded at their appropriate amount/value
- Auditors will check whether the transactions are presented, disclosed, or classified in a clear manner that can be easily understood by the users
- Audit firms in Dubai will verify whether the company has recorded its transactions, support documents are provided
- The company can rightfully use or dispose of its assets and is obligated to pay off its liabilities
- Auditors implement an audit procedure to confirm the accuracy of transactions by examining the sample of transactions and the corresponding documents
- Auditors will confirm the closing bank balances using the bank confirmations or statements provided as of that date
- Auditors will confirm customer & supplier balances by using their confirmation as third-party confirmation
- Physical inventory confirmation will be used for inventories held at the end of the period
- Auditors will inquire about management confirmation for the contingent liabilities at the end of the audit process
- Auditors in Dubai will check sales invoices of the client, supporting documents for the purchases and expenses, or may check the payments vouchers for the audit period
- The auditor will recompute or recalculate depreciation calculation or provision for end-of-service benefits or provision for doubtful bad debts.
- Auditors shall issue their audit reports after they examine the company’s financial statements and related documents. This includes the auditor’s opinion, financial statement, and management report.
Hire Auditors from Jitendra Chartered Accountants
During an audit, auditors in Dubai will check whether the company’s accounts are properly maintained and complies with local and international accounting standards. The basic objective of a financial statement audit is to provide an independent assurance that the company has presented a true and fair view of its financial performance in the financial statements. Only leafing audit firms in Dubai such as Jitendra Chartered Accountants (JCA) can help to achieve the core aim of the audit efficiently.
JCA is one of the leading Audit firms in Dubai, UAE with over 20 years of commendable experience and reputation. We have highly qualified audit professionals in our team who can ensure that the clients comply with the requirements as per International Reporting Standards, Auditing Standards, and relevant legal requirements. Apart from providing accounting and audit services in Dubai, JCA offers compliance services related to VAT, Economic Substance Regulations (ESR), and Ultimate Beneficial Ownership (UBO).