‘The When & How of Audits’: Top Reasons it’s essential for Your Business in Dubai
SMEs account for nearly 95% of all companies operating in Dubai, contributing to around 42% of the emirate’s GDP. That makes SMEs the backbone of Dubai’s business landscape. Despite this status, many small businesses and startups struggle for finance and to grow as they don’t realise how important it is to have auditors in Dubai. Many of them conduct annual financial audits in Dubai either to meet a compliance requirement or at the request of a lender.
For instance, SMEs or startups hire audit firms in Dubai if they are operating in a free zone. All Dubai free zone authorities have made annual audits mandatory whereas it is optional in the mainland other than Abu Dhabi. Most free zones in the northern emirates don’t force the submission of audited financial statements. So, this makes us doubt whether small businesses in Dubai truly understand why they need an annual audit of financial statements.
Here, through this article, we are going to unlock this billion-dollar question and find the answers for you. Let’s start listing the reasons.
1. To ensure accurate financial statements
Unlike the big corporate groups, small businesses don’t have a big team of qualified accountants to ensure that their books of accounts are accurate. By having an audit, the SMEs can ensure that their books of accounts are accurate and comply with international accounting standards. This is because an audit is conducted by qualified auditors in Dubai who would check your books of accounts and internal controls. They would advise you on how to rectify the accounting errors and how to improve the internal controls. So, at the end of the audit, your books of accounts will be accurate and comply with local & international standards.
2. For Better Decision Making
If your financial statements are accurate, the management will be able to analyse them to make better decisions for the company. If the numbers from the accounting records are not accurate, then the decisions you make for the company will also turn out to be wrong. And this will also impact the performance of your company. In short, hiring the best audit firms in Dubai is your best shot at increasing the growth of your company.
3. To Minimise the Risk of Fraud
When auditors in Dubai review your internal controls and systems, they could point out to you where the weaknesses are. Based on such recommendations, you can make the certification that would significantly reduce the risk of fraud. A potential fraud may remain undiscovered if a company decides not to do the annual audit. Big MNCs know this and that is why they hire the best audit firms in Dubai to do the audit. Doing an audit doesn’t guarantee fraud won’t happen, but we can reduce it.
4. Audit Helps to Build Trust
By periodically reviewing the financial statements, you can build trust among the company’s partners, investors, lenders, authorities and other stakeholders. An audit ensures that such stakeholders trust the financial statements shared with them by the management or an accounting team. Imagine that a company has an active partner who is involved in the day-to-day operations of the company. The company also has some inactive or silent partners who want assurance that they are not being cheated by the active partner. The audited financial statements ensure that the trust between all the partners is maintained.
5. Verification of Statutory Compliances
The auditor will verify that the company is complying with the various laws of the land like Commercial Companies or Free Zones Law, Value Added Tax (VAT), Ultimate Beneficial Owner(UBO), Economic Substance Regulations (ESR) etc.
6. For Selling a Business Smoothly
Business owners who plan to sell their company must conduct regular financial audits to make the selling process smooth. Potential buyers will get an accurate picture of the company’s financial health by looking at the audited financial statements. An audit may also help the owners increase the selling price of their business.
7. For Good Business Practice
Conducting regular financial audits in Dubai sends a strong message about your company to the government authorities, investors and customers. This helps you build confidence in the financial stability of your company and aids its growth.
Hire the Best Audit Firms in Dubai to Audit your Small Business
It’s a common trend among small businesses and startups to conduct audits only if it’s a compliance requirement or for purposes like obtaining a bank loan. Small businesses that do not conduct financial audits in Dubai face the risk of fraud and a lack of knowledge about the financial health of the company. To avoid such risks, small businesses and startups are advised to hire the best audit firms in Dubai for getting their books of accounts audited.
If you are searching for the best auditors in UAE, look no further than Jitendra Chartered Accountants (JCA). JCA is one of the most reputed audit firms in the UAE with experience of 20 years of serving SMEs, startups, individual entrepreneurs and big corporate groups. We offer the best audit services in the UAE and add value to your business.