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There are several experts and their expertise involved in a business. When you are trying to set up a new venture in the city of Dubai, you would require some major backups. The backups might be in the form of some of the accounting services that you would require to establish a successful business in Dubai. Having a clear business mindset about the products and services with the essential workforce, you need to have the proper accounting services. There are several variants of the accounting services like bookkeeping and auditing.
Some Facts About Auditing and Audit Firms
Auditing is an area of financial operations in a business. It is also an integral part of business operations and proceeds with dedicated audit firms in Dubai. A business audit is a form of financial evaluation of the finances associated with the business. It is to verify whether the business documents containing the detailed business finances are at par with the audit standards. The concerned auditor verifies the finance-related documents with the assumptions and shreds of evidence of the audit. The auditor records it in written audit options in specific finance-related terms. The auditor usually hails from reputed audit firms in Dubai and is responsible for carrying out the audit in the business.
Types of Auditing
1. External Type of Audit-
An external audit is a form of audit occurring in a business. It precedes through the involvement of the Public Accounting firms that are government-specified. The auditor plays an integral role in making the final financial statements about the business and, his opinions are in the final audit report. A clean audit report by the auditor means there is no anomaly found in the finances. The external audit can go through the details of the financial statements of the business. It can also proceed with the internal financial reports of the company.
- There is often the involvement of the external auditors. The external auditors making the external audit may give some financial rights to the stakeholders of the business. They follow some predefined set of audit rules and regulations that may not comply with the internal audit rules. There is much transparency associated with the external audit. As there is a third-party evaluation, the external auditor’s report will solely depend on the company’s financial status. It also would not affect the daily work environment in a business.
2. Internal Audits-
The concerned auditor belonging to a particular business company also deals with internal auditing. It is to improve the performance of the company. The internal audits make use of specific accounting tools and methods to evaluate the internal business finances. It is often a managerial portion of the auditing that helps the company to take the necessary steps. It is to improve the financial operations of the company.
- The internal audit is more or less on the personal relations of a company with the auditor. The auditor may be a part of the company’s system and, the particular company itself appoints the internal auditor for the purpose. The results of the audit directly move to the board of directors. The audit depends on the internal policies and administration system and much on the in-house resources of the business.
- One of the purposes of the internal audit system is to make administrative transformations within the system. Based on the financial audit reports by the internal auditor, the management can take the necessary decisions to make major alterations within the system. It would also help in the effective functioning of the system.
3.Audits of the Internal Revenue Services-
It also falls under the umbrella of the internal audit in a business firm. Every business runs on a profitable turnover. However, it is also the responsibility of the company to pay the taxes to the government. The audits on the internal revenue services ensure the evaluation of the tax paid by the taxpayers based on specific business transactions. If the IRS reports the findings to the board of directors, it usually carries a negative vibe with it.
- The IRS audit report might indicate some anomaly carried out by the taxpayers. However, it is not always true. The IRS audit often makes use of some statistical analysis to examine the taxation. It may compare the returns of the taxpayers with that of the previous years. If there is the occurrence of any missed taxation incident, the IRS auditor may interrogate the reason behind it.
Advantages of Auditing
1. No More Space for Frauds
There several reported incidents of frauds taking place in business. Business is not always about making money and, the foundation of any business runs on its financial transparency. The ethical sides of a business come forefront only with a system of auditing. Better results come in case of the involvement of the third-party auditor. There might be some dishonest employees associated with the business who might be responsible for the downfall. Auditing is a must to put an end to the frauds in financial operations. It helps in preventing the involvement of the fraud people in the company.
2. Chronological Account Maintenance
An efficient internal auditor will also be responsible for chronological record management. Business management can expand if there is a systematic approach towards keeping financial data throughout the year. It helps the management to plan some effective business strategies.
3. You Can Recover the Loss
Property insurance is quite common in business organizations. Suppose a fire breaks out in the main office building and, you bear the jaw-dropping loss. The audit here emerges as a hero. If there is an audit report, it will help in summing the monetary aspect behind such a huge loss. Based on the audit report, the insurance companies would come forward to provide financial assistance to the business.