Facing Audit for the First Time in Dubai? Be Prepared with this Checklist
Dealing with external auditors can be challenging for an accountant especially if he is not prepared and done the homework. Also, preparing for the first-time audits will be a daunting task, especially if you are running an SME or a startup and have no accounts knowledge. But it’s rightly said the road to success is always under construction. Too many thoughts may be running through your mind: ‘how long the process will take, ‘how to keep the costs down and most importantly ‘what should be done to get a clean opinion’.
Except for the companies operating in Dubai free zones, most small businesses go for the audit process when banks ask for the audited financial statements or while seeking outside investment. Be it a legal compulsion or for a loan, there is no need to panic while auditors in Dubai arrive at your office. Stick to the following checklist if you are the owner of a small business or startup preparing for the first audit,
Audit Must be High on Agenda
Before the audit, you must secure the commitment of all the key stakeholders in the management. The key members of the management may not feel the same sense of urgency towards the audit as they would be giving priority to tasks that are closely related to building the business. However, you need to convince them about the importance of preparing for the audit as investors or lenders may be counting on your audited financial statements.
All Accounting Records Must be in Order
Most early-stage companies don’t have a full-fledged accounting department or a Chief Finance Officer. In that case, the chances are high that the accounting records must be in disarray. You need to collect all the relevant accounting records and prepare them for the audit. Maintain the financial records in such a way that it would ease the burden on you as well as the auditors in Dubai who come for the audit.
Request a ‘Prepared by Client’ List
The best way to make the audit process smooth is to start by requesting the auditors to provide a ‘Prepared by Client (PBC) list. The auditors in Dubai will provide you with a list of all the documentation, contracts, and flowcharts they will require to complete the process. A PBC list may include YTD sales, assessed value of assets and liabilities, documentation of your data management policies and procedures, opening balances for your balance sheet accounts, etc. Go through the list and prepare the items in the list well in advance, which will help you smoothen the audit process.
Let a Knowledgeable Employee Manage Audit
During an audit, the auditors analyse the financial statements to see if they are prepared as per the local and international accounting standards such as the IFRS-International Financial Reporting Standards. The IFRS rules can be highly nuanced, which requires technical knowledge and judgement. Furthermore, the accounting standards get updated often. Ensure that at least one person who deals with the auditors has basic knowledge about the accounting standards and how they apply to the company. Prepare the staff accordingly to make the audit process less stressful.
Dedicate your Time for the Audit Process
As the owner of a small business or a growing startup, you will be engrossed all the time in key matters such as product development, sales, and customer support. Although internal infrastructure is important, the entrepreneurs may give it less priority. Since focussing on financial reporting and internal controls is equally important, you must divide the responsibilities among the staff. You can do this without leaving the focus on your core competencies or pulling employees away from vital responsibilities. Auditors in Dubai need your support from beginning to end, and it is imperative to find time for the audit process.
Engage Someone to Own the Results
An audit process doesn’t essentially end with the submission of an audit report, even though it’s the final step in the process. The stakeholders require advice on the recommendations provided by auditors in Dubai, key findings, areas that are vulnerable to greater risk and other major insights mentioned in the report. The stakeholders may also seek clarity on certain aspects that only someone with knowledge about IFRS could answer.
The audit report will contain insights on opportunities for improvement, and the company should know how to carry them out. All this would be possible only if you designate someone in the management to take responsibility for the auditor’s conclusions. The person would guide you on how to take forward the audit recommendations.
Ace the First Audit with Confidence
Proper preparation is the key to ace your company’s first-ever financial statements audit. Without adequate preparation, the process will be stressful for you when the auditors in Dubai come to your office. First of all, understand and prepare a list well in advance to make yourself ready for your first audit in Dubai. Get your records in order, divide the responsibilities among the staff and determine who will own the audit conclusions to make the process meaningful. Furthermore, entrusting the best audit firms in Dubai, such as Jitendra Chartered Accountants (JCA), will be an advantage for small businesses and startups.
JCA’s auditors in Dubai have experience in working in a wide variety of industries. This diversity in experience will come in handy for you as the auditors will be able to understand the specifics of your sector. Since JCA has worked with businesses of all sizes, small businesses may find it easy to communicate with our team of highly qualified auditors in Dubai. Contact JCA today itself for a stress-free and cost-effective audit in Dubai.