Resources

Frequently Asked Questions

We have listed below a few outstanding business/ management books. And though it is entirely possible that you have already read some of these titles, each is worth re-reading and adding to your personal library.

Audit & Assurance

1. What is Audit & Assurance?

Audit & Assurance is an evaluation of an organization, system and processes and testing them on the basis of statistical samplings. They are performed to ascertain the validity and reliability of financial information, and also provide an assessment of a system’s internal control.

An audit seeks to provide only reasonable assurance that the statements are free from material error. A set of financial statements are said to be true and fair when they are free from material misstatements.

2. Why is it important to engage an Audit & Assurance Service?

An audit is much more than a formality; it is a real necessity to protect business and encourage it to thrive. It is crucial to engage an Audit & Assurance Service to review the company’s financial status, system processes and internal controls, in order to assess the effectiveness and efficiency of these components. It would also increase accountability and transparency.

3. Why is it important to engage an independent auditor?

The external auditor serves the private interests of the shareholders of the company. An independent auditor is a neutral and impartial party which would be deemed to have no interests in the company. This would ensure greater accountability and transparency while reporting to the shareholder.

4. What are the benefits a business unit can get from an audit     experience?

A business unit can benefit from an audit in the following ways:

  • Independent opinion
  • Protection of the rights and interests of shareholders
  • Better internal controls
  • Detection and prevention of errors
  • Verification of books
  • Detection and prevention of frauds
  • Loan facility
  • Moral check
  • Easy valuations
  • Facility for prospective investor
  • Satisfaction of business operations

After an audit is completed, the company will be able to develop a greater understanding on the handling of financial matters, preparation and presentation of financial statements. An auditor’s report on the financial statements and suggestions for improvements would also be presented to the management of the company.

5. Would the audit process be too troublesome for my company?

The entire audit process can be divided into 3 phases. Firstly the proposal submission and approval where Ethics Plus would submit a proposal based on the key audit areas and discuss the key issues with the management of the company. Then the auditor embarks on fieldwork to obtain necessary documents and financial statements from the management. Third phase include the drafting and submission of final auditor’s report to the management. This entire audit process would be translated into a cohesive program to the mutual consent of both the Management and EP.

6. When will the audit process begin and end?

The audit process normally commences in January, if books are closed at the end of a calendar year. It normally ends within the same month. The actual time schedule of the audit assignment will be discussed and agreed upon by both the company’s management and Ethics Plus.

7. Why should a company engage EP as the independent auditor?

The increase in demand for reliable financial information has put audit and assurance services in the spotlight. Here at Ethics Plus, our main aim is to give our clients a clear insight into their corporate strategy, business processes and financial reports. We provide a range of audit, reporting, corporate governance and risk management services. We are large enough to offer a comprehensive package and yet small enough to ensure personalized treatment of each individual client. At Ethics Plus we focus our wealth of knowledge on the goals of each client. We go beyond the numbers to create strategies for financial success.

8. How much would it cost to engage EP as an independent auditor?

We are one of the leaders in providing quality accounting, auditing and consulting services to businesses and individuals. Our fee is based upon the volume of transactions, business complexity and the annual revenue/ turnover of the company.

9. How can my company engage EP as the independent auditor?

The management of the company could contact EP at ethics@emirates.net.ae. We will contact you back for arranging a meeting in order to have an understanding before submission of a proposal.

Accounting & Compilation Services

1. What is accounts outsourcing/ bookkeeping?

We are a firm of public accountants who provides specialized bookkeeping services and can carry out all your accounting requirements. There is no need to hire an accountant yourself and supervise them. Outsourcing is a cost effective solution to the problem of continually hiring and training in-house accounting staff, and the related employment risk.

2. What about software costs?

We are experts in all kinds of accounting softwares such as Tally ERP, Peachtree Premium, Sage, ACCPAC, Focus and Quick Books. There is no need for you to invest in a software if you do not want to or we can very well work on your existing software.

3. Where is the work done?

Ethics Plus provides accounting solutions specific to the client’s requirement. The scope of coverage could include complete accounting aspect for the entity to specific functional areas in accounting such as ‘accounts payable’. The service could either be performed onsite or offsite depending on the clients’ preference for service delivery, information security, logistics, and timeliness.

4. What is the duration of your engagement?

Accounting assistance agreements are usually for a period of one year (calendar year) and later renewed after a review of your new requirements. Agreements are very flexible, e.g. one or two days every week, monthly, quarterly, half yearly or annually. We will meet the needs of your business as per your requirement.

You are assured of a dedicated professional accounting service to help make the most of your business.

5. Do the accounts have to be monthly?

No, sometimes weekly accounts are more appropriate and sometimes quarterly.

6. Are there other benefits besides cost savings?

Ethics Plus can work closely with your existing team and help you leverage on:

  • Compliance and Controls
  • Best Accounting Practices
  • Timely Closing & Reporting
  • Technical & Complex Issues
  • More Management Time
  • Impressing Potential Investors

7. What other services do you provide?

In addition to the traditional audit, accounting and assurance services that we are known for, we have also transitioned into providing multidisciplinary business advisory services. The wealth of experience that we have garnered by being in the service business since 1995 is a direct testimony to the reliance that you can place on our services. Our advisory services include:

  • CFO services
  • Market Research and Techno-feasibility Studies
  • Business Valuation
  • Operational Improvement Services
  • Enterprise Risk Management
  • Information Technology Services
  • Credit & Working Capital Management
  • Incorporation Services
  • Placement Services

Our affiliation with INPACT International Ltd., UK, an international group of accounting firms, spread across 60 countries with over 150 affiliate offices worldwide, offers us access to additional resources for each areas such as:

  • Setting up overseas branches and companies
  • International tax planning
  • Offshore structures
  • International audits

Through our experience and close relationships with venture capital firms, banks, business agents and other reputable consultants, we can tap specialized areas of expertise for complex issues.

CFO Services

1. What size companies do you work with?

Our clients range from smaller NGO’s to companies having millions of dollars in annual revenue. Ethics Plus can handle everything from complex financial transactions to mundane matters like processing petty cash. Our CFO services can assist you with consistent controlling process which will help your business with both planning and forecasting. Many of our clients rely us to:

  • Review daily cash receipts, deposits and payables
  • Review contracts
  • Review payroll
  • Assist in preparation of MIS reports
  • Set up and handle insurance revisions
  • Assistance in preparation of cash flows, budgets and forecasts
  • Monitor results against budgets

2. How much time would you expect to spend at my company?

We do not work as full time employees and how much time we spend on an assignment depends on several factors – all of which are under the owner’s control. Your existing staff, revenue, accounting systems, and business complexity, as well as the scope of services requested are major determining factors.

3. Do you specialize in any particular type of business?

We service a diverse base of clients drawn from a variety of industries and sectors including professional services, retail and wholesale, manufacturing, healthcare, construction, entertainment – from sole traders to multi-national enterprises.

4. What is the difference between a controller and a CFO (Chief     Financial Officer)?

A finance controller is an experienced accountant who manages the accounting staff. The controller is responsible for making sure that the company’s transactions are properly recorded and that financial statements are generated every month.

While a controller fully understands accounting and accounting systems, a CFO will take a more forward look at business by projecting, forecasting, managing cash flow, and planning for future growth. The CFO also manages the controller and is also responsible for the overall financial health of the company. A CFO is responsible for Treasury functions (cash), Financing (debt), Information Technology, Legal, External Accountants, and provides the answers to the CEO and the shareholders. If Ethics Plus is engaged for CFO services you get the benefit of both the controller and the CFO working as a team.

5. Is my company too small to benefit from CFO services?

The need for sound financial management never depends on the size of the company. Companies of every size benefit from the services of a CFO. But small companies usually don’t need these services on a regular day-to-day basis. Ethics Plus can be retained to provide CFO services on a part time basis.

6. Is it necessary to lay off my accountant?

Many small businesses fail, not due to a fundamental weakness in the business itself or even the changing economics of their industry, but due to a lack of even the most basic financial management. Without sound financial management, companies are simply not able to realize their potential or manage risk. Our CFO services can provide the big difference by bringing a clear vision for optimal growth. Even if your company is running fine, nothing is perfect. Efficiencies and margins can always be improved and we can work with your accounting staff to improve existing financial reporting, so that you can make better decisions about your future.

7. How can I receive a quote for your CFO services?

Here is the deal…………

  • You will receive a free, no obligation initial consultation. We will offer as much advise as we can.
  • You will receive a competitive free quote at the meeting.
  • We can either come to you to help us get an understanding of your requirements or if you prefer to visit us and see our set up, that is fine. You choose.
  • If you already have an accountant, the change over is very simple and we take care of it all for you.

Company Incorporation in UAE

1. How do you incorporate in a free zone in Dubai?

Dubai has a number of business free trade zones which allow companies to set up in Dubai, while maintaining its ‘Offshore Status”. The salient features of free zone companies are the following:

  • 100% foreign ownership.
  • No corporate taxation for 50 years- a concession that’s renewable.
  • Freedom to repatriate capital and income in totality.
  • No personal income tax.
  • Full exemption from import duties.
  • No currency restrictions.
  • No bureaucratic red-tapism.
  • No recruitment problems.
  • Modern efficient communication.
  • State-of-the-art infrastructure.
  • Abundant energy.
  • Attractive working environment.
  • Owned premises on leased land can be mortgaged.

A free zone license is normally issued within 2 – 6 weeks, depending on the free zone, but some may stipulate that all work must be carried out within the free zone. Importantly, many free zones will only allow companies to trade outside of Dubai. Some free zones are set up to cater for particular types of businesses such as Knowledge Village which provides services for educational companies.

2. What are the advantages or disadvantages of incorporating a     company in Dubai itself (not in FTZ)?

Incorporating in Dubai proper (as opposed to a Free Zone) does have the advantage of allowing a company to trade freely both within and outside of Dubai. However, a local UAE national must hold a minimum of 51% of the company’s shares and balance 49% by the other party.  The local partner will have a nominee role only.

3. Is it possible to set up a branch or representative office of a     company in Dubai?

Yes. A branch or representative office of a foreign company in Dubai can conduct marketing and sales meetings and establish a real presence in Dubai. However, a branch office cannot engage in trade or actual sales of any kind, nor can it enter into contracts or complete or perform any services offered by the parent company.

4. What type of documentation is required to open a company in     Dubai?

This depends on the type of the activity and the entity you wish to establish. The documentation requirements from the Dubai authorities can be quite cumbersome. Ethics Plus can assist with full set-up service including locating a local national partner.

5. How long will it take to complete incorporation in Dubai?

This will all depend on the type of entity you wish to establish. It will vary between four to six weeks.

6. Is a Dubai LLC required to prepare financial statements?

As per corporate company act prevalent here, a Dubai LLC Company should submit audited financial statements.

General Questions

1. My company is on a growth path and how can I be sure my cash flow     is sufficient to sustain that growth?

Firstly take stock of your current situation – your current sales volume, kind of gross margin, how quickly do you collect your accounts receivable and how many times per year does your inventory turn? The answers to these questions will provide you with your requirement for cash and its availability within the business. Next, consider how much you’ll need to increase your fixed overheads in order to handle the anticipated growth. Which are the areas such as current size of the premises, selling expenses etc you anticipate an increase in cost? On the basis of the above information, projected cash flow statements can be prepared to exactly make sure availability of a healthy cash position.

2. If I need cash how can I fund it?

If you have a current banking relationship with a credit line, explain your business plan to the bank. Show them how much additional cash your plan requires, and why. If you do not have already an established line of credit with your bank, you should approach them about setting one up. Ethics Plus can assist in the entire process of:

  • Establishing credit management policies and procedures.
  • Defining and implementing action plans.
  • Obtaining credit & financing for your business through debt financing, factoring & invoice discounting, trade credit, venture capital companies and private individuals.

3. How can I enhance my working capital?

Working capital is the difference between current assets and current liabilities. If the current asset does not exceed the liabilities your business is in trouble. The key to a good working capital management is to keep the timeframe for collecting your receivables to a minimum and manage your supplier terms to the max. If you have inventory, you should compute inventory turnover ratio to evaluate how much money is tied up in inventory.

4. My inventory balance is very high. How can I free it up?

You can free up a lot of money from inventory, without running the risk of running out of essential items. You need to systematically classify and divide them into three categories:

A = Items that turn frequently (e.g., every week or month)
B = Items that you occasionally use
C = Items that are old, slow-moving, or obsolete

While keeping a healthy stock of all A-list products, for items in the B list, investigate potential alternatives. If you can find a vendor who will let you buy these products on demand (without a lead time), you can eliminate them from your inventory. The items on list C should be sold for any price you can get. Ethics Plus can help you make intelligent analyses of your inventory and reduce inventory to ease cash flow strains.

5. I am not making good profit margins and I’m thinking of selling the     business. How do I decide?

You need to compare your present profits to the profit you could make if you pulled your equity out of the business and invested it somewhere else. If you’re not making enough money from your business than from a more traditional investment, then you need to ask yourself why you’re in the business. You may have deep-seated personal reasons for holding on, but if you can’t increase your equity, you’ll never retire.

6. What is break-even sales point and how do I find it?

Your break-even point is the level of sales that produces neither profit nor loss. You can calculate your break-even sales using the following formulas:

  • Gross Profit Margin = Sales – Variable Costs
  • Gross Margin Percentage = Gross Profit Margin / Sales
  • Break-Even Sales = Fixed Overhead / Gross Margin Percentage

7. Of late, my sales are declining. Where should I concentrate my     efforts?

There are a few ways to increase sales:

  • Increase the number of customers
  • Increase the frequency of transactions
  • Increase the average transaction value
  • Improve operating processes for better efficiencies

Once you know where you stand, in terms of how many customers you have, how frequently they buy from you on average, and what the average transaction value is of those sales, then you can evaluate the situation to determine where you should direct your focus. You may decide that you need to increase your efforts to expand your customer base… or you may discover that the best way to increase your sales is to look for new ways to generate more frequent or more higher value purchases from your existing customer base, perhaps by enhancing or expanding certain products and services.

8. How—and why—should I update my customer list?

There’s a well-known rule in business, known as the “Pareto Principle”, which states that 20% of a business’s customers typically account for 80% of their sales. It’s definitely worth your while to focus your attention on cultivating your top customers. You may even want to cut off some existing clients, so you can better concentrate your efforts where they’re most likely to produce results. You can clean out your customer database to free up your resources. Start by dividing your customers into three categories:

A = Customers who buy frequently
B = Customers who make occasional purchases
C = Customers who have failed to respond to your sales and marketing efforts

The customers on your A list deserve the most attention. You may want to target them with special offers and campaigns. B-list customers are also important but don’t squander excessive time and money chasing those on your C list.

9. How can I motivate my sales team?

A number of factors come into play when it comes to the productivity of a company’s sales team. You must prepare your sales team in such a way that they understand the company’s numbers. Make sure you fully educate your sales staff about your sales mix, product lines, service lines, and margins mix. Second, you should look at how best your salespeople are compensated for their efforts. Are they receiving a commission on sales or a share of the profit margin? Find out ways to increase their motivation. There may be other issues that you need to address in order to enable your salespeople to be more successful. For example, you should examine your fulfillment process: are your services or products delivered efficiently? Are your customers satisfied with the service they receive? Businesses that provide superior customer service can charge more for their products and services, realize greater profits, and increase their market share. Customer retention is very important than to target for new customers.

You may find us at:

Suite No. 108 & 109, Mezzanine floor, Al Diyafah Shopping Center, 2nd December Street, Al Bada’a, Dubai.