What Role Audit Firms Can Play in the Growth of Startups in 2022?

Most startup owners in Dubai dislike carrying out an annual audit and view it as a ‘necessary evil’, a regulatory compulsion or an unnecessary overhead. However, they fail to realise that audits conducted by the best audit firms in Dubai can aid the growth and improve the performance of their business. An annual audit gives you a valuable opportunity to glean valuable insight into your business without bias.

Carrying out an annual audit is mandatory for trade license renewal of most free zone companies in Dubai, while it is voluntary for mainland firms. Audited financial statements may be necessary for regulatory compliances, getting business loans, convincing potential investors etc. It will be mandatory for the proposed UAE corporate tax, which is set to take effect from June 1st, 2023. Apart from these reasons, audits may be beneficial to a startup to bolster its growth and add more value to its business. The following reasons may convince you of the role audit firms can play in the growth of startups in 2022:

Audit Firms Can Help You in the Prevention of Fraud

Fraud and other forms of malpractices are the number one deterrent to the growth of any business. A startup cannot afford to fail to identify acts of fraud as it may lead to its early death. Audit firms in Dubai can go through your financial statements to determine any material misstatement or fraud. Auditors can unearth a lot of information that can help you identify acts of fraud and improve the administration of your startup’s activities.

Help You Understand the Financial Health of the Startup

Audit firms can help you get a better understanding of your startup’s financial health. Getting a clear picture of your startup’s financial condition will equip you to make informed decisions about the direction the organization must take and also how to allocate the resources. Understanding the financial condition of your business is critical if you are planning to attract more investors or seeking more financing. After carrying out an audit, you will have the necessary information about your organisation, which will help you to stay on track and boost growth.

Encourage You to Implement Effective Controls

While carrying out an annual audit, the focus of the auditors is not restricted to your numbers and finances. The auditors will gain a deeper understanding of your business, which will enable them to look at your organisation with a fresh pair of eyes. The auditors will examine your systems and make recommendations for changes or improvements. Strengthening your organisation’s internal controls, systems and procedures will result in a more effective, efficient, and lucrative business.

Audit Firms Can Help to Boost Reputation

A company that regularly carries out external audits can have a good reputation among the government, lenders, potential investors and licensing authorities. Audited financial statements increase your startup’s credibility if a potential investor or buyer requests them. Financial statements audited by approved audit firms in Dubai bolster the accountability of the managers and employees in the company.

Gives Confidence to Shareholders

Companies with multiple shareholders will immensely benefit from an annual audit as it provides them with an independent review of financial statements. In this way, audit firms can be instrumental in giving the shareholders peace of mind and confidence that the company is properly run and is free of any issues or fraud. This kind of reassurance from registered audit firms in Dubai is crucial for the shareholders who are not directly involved in the day-to-day operations of your startup.

Increase the Value of Your Business

Audit firms in Dubai can uncover fraudulent or inefficient practices and make suggestions for improvement. They can add value to a startup in this way as they can identify areas where certain risks are not addressed and will not be hesitant to approach the management with potentially bad news.

Gives You the Power to Make Decisions

The audit report and the advice you received post-audit can be used to make better commercial decisions now and in the future. It could be a decision on changes in processes, systems, or controls. You can even use the audit recommendations as the business case for change to other directors or change your management team.

Assists You to Sell the Startup

Selling to bigger companies or investors is one of the core objectives of most startups. For example, successful UAE startups such as Souq UAE and Careem have been sold to Amazon and Uber respectively. Through an audit, audit firms can enhance the credibility and reliability of the figures being submitted to prospective buyers. This will speed up the due diligence process that might take place once the business is ready to be sold.

Hire the Best Audit Firms in Dubai, UAE

The reasons stated in the blog are indicative of the role played by audit firms in Dubai in boosting the growth of your startup. However, to get better results, you must hire registered and approved audit firms in Dubai such as Jitendra Chartered Accountants (JCA). JCA is one of the top providers of audit services in Dubai with more than 20 years of experience. Apart from audit, we also provide bespoke advisory services related to corporate tax, AML, ESR, UBO, ICV, VAT and accounting. If you are seeking an audit company that understands your organisation and provides you with appropriate solutions, don’t hesitate to contact us.