An Essential Guide To Conduct An Internal Audit In Your UAE Organisation
Performing consistent internal audits is essential for businesses to accomplish their corporate objectives by analysing the efficacy and consistency of their best practices. Unlike an external audit, an internal audit aims to ensure that the corporate policies and procedures are strictly adhered to. Typically, an internal audit is done with internal resources but, to achieve efficiency, companies outsource it to the best audit firms in Dubai.
Internal auditors review the internal controls and process and alert the management of any serious gaps. If done consistently, internal audits in Dubai can help the businesses manage performance and ensure consistent quality. An internal audit is mainly associated with risk management and is performed to assess the effectiveness of a company’s internal controls, corporate governance, and accounting processes.
Internal audits help management and the board of directors to identify flaws in a process and correct them prior to external audits. If you really want to improve the efficiency of a business or prevent fraud, perform an internal audit by executing the following eight steps:
1. Identify Areas that Need Auditing
It’s not viable to audit every process within your organisation. A better alternative is to identify specific areas whose auditing will help your organisation grow in real terms. For instance, an internal audit of financial processes will let you understand whether or not its expenditure is on the right path. If your company succeeds in identifying the areas that need review, it means you have taken the first step in driving the organisation to success.
Start by preparing a list of each area that requires an audit. Internal audit is a sure-shot process that can ensure continuous improvement of the internal controls or accounting process. However, you need to maintain clarity right from the start to achieve the desired results. Work with the top internal audit firms in Dubai to successfully audit the internal controls within the organisation.
2. Determine How Often Auditing Needs to be Done
Accurately deciding the frequency of audits is vital for performing successful internal audits in your organisation. On a closer examination, you may see that some areas need annual audits while some may require half-yearly or quarterly. Typically, areas of quality control may require more frequent audits while financial processes may not. For example, the HR function in your company may require only an annual audit while a manufacturing process needs to be audited frequently
3. Create an Audit Calendar
An internal audit will not be successful without adequate planning and proper scheduling. Planning ahead by making an audit calendar will help you avoid clashes with the processes. Proper scheduling ensures that the team members required for the internal audit are available at the time. In short, it helps you ensure that no single area is left unaudited. Adopting a structured and systematic approach to the internal auditing process is vital for the smooth completion of the audit.
4. Alert Departments of Scheduled Audits
As a common courtesy, you should notify every department about an upcoming internal audit, which will help them stay prepared. The department members can come with the required documents and other materials such as evidence for the action plans if they are notified in advance. Notifying in advance means you are respecting your team’s right to be informed about the organization’s activities. However, if the audit is related to suspicious activities you are excused for not notifying the team members.
5. Record and Analyze Audit Findings
Once the audit is completed by internal auditors in Dubai, you should record the audit findings to understand whether the processes are working fine or not. It will also help you identify the areas that warrant improvement. Once the audit findings are documented, you can proceed to analyse the areas that require immediate attention and the areas that can be reviewed or rectified later.
6. Investigate to Develop and Implement Action Plans
Now, it’s time to investigate the areas mentioned in the audit findings to find out the root cause and come up with an action plan accordingly. The Investigation, Development of Action Plan, and Implementation depend on the level of risk associated with the issues identified. You may choose your preferred methodology to investigate the root cause. However, it should be done efficiently as you can’t afford to let the issues repeat, which may lead to overhead expenses. It is better to entrust the best audit firms in Dubai with your internal audit requirements to ensure accurate audit findings.
7. Perform the Effectiveness Review and Audit Follow-Ups
At the final step, you can conduct an effectiveness review and audit follow-up which will enable you to gauge the efficacy of the action plan. Remember, this is as important as scheduling and the internal audit process. Also, follow-up on audit findings works like a reminder for the audit activities that warrant immediate attention. These steps are vital because a streamlined and standardized audit process ensures that you adhere to compliance standards and the best industry practices.
Hire the Best Internal Audit Firms in Dubai, UAE
Conducting internal audits prior to an external audit will help you to understand the weaknesses of your organisation’s internal controls and processes. Even though some companies use their internal resources to perform internal audits, better results are yielded when they hire top audit firms in Dubai for the audit. If experience and qualified auditors matter more to you, then look no further than Jitendra Chartered Accountants (JCA) for conducting internal audits. JCA has completed twenty years of exemplary service in the UAE and boasts of some highly reputed clients. Our internal audit services in Dubai will help you implement the best practices of corporate governance within your organisation.