An external audit is one that is conducted by an independent accountant or an external audit firm. It ensures that a company’s internal processes, regulations, and directives are competent, operational, and follow government compliance rules and requirements and observe industry standards. This type of audit ascertains that there are no errors in the financial statements.
An external audit, unlike an internal audit in Dubai or elsewhere across the UAE, is more likely to be completely impartial. External auditors have no relationship with the company or organization being audited. And hence,
audits can be performed without any kind of fear of backlash. In addition, external audits can be conducted to validate the findings of internal audits. Also, sometimes it is easier for an external body to pick up something that
might have earlier gone unnoticed. Thus, external audits can often reveal system irregularities and how these can be corrected.
For their professionalism and efficiency, audit firms in UAE are ranked among the highest in the world and easily offer some of the most critical insights that can improve the performance of the business being audited.
However, before you begin an external audit from an audit firm in UAE, here are nine tips to keep in mind:
An external audit is an evaluation based on external standards. It is important that you as a company take the time to determine the standard that you are likely to be compared to. Studying the approach that an external auditor will
take will prevent you from taking superfluous actions such as revisiting topics that are outside the audit’s scope.
Firstly, set a date wherein you will provide the required documentation aske for by the external auditor or auditors. Then make sure that these documents are procured and readily available to be submitted. Always review these
documents before you hand them in. This would also be a good time to prepare a list of questions that you might anticipate being asked by the auditor.
Explain the importance of the audit to your employees and demonstrate the kind of standard that you would expect from them so that they can be prepared. In addition, there will be employees who understand and implement
certain core tasks that will be related to the auditing process. These employees, who are often called SMEs, should be provided with all the required resources that will assist them in processing the requests of the external auditor.
Organize meetings with your SMEs and run through the internal processes that will be examined during the audit. The purpose of this is to pinpoint any inconsistencies that exist so as to make sure everything is both efficiently and
consistently done.
While you are preparing for the audit, it is imperative that you assign a person within your business who is responsible for liaising with the auditor. This person must have certain key skills. He should be a good orator with the ability to lead meetings for those who will be involved in the auditing process. He or she should also have good project management skills. Usually, SMEs assist this individual to make preparations for the audit.
Let faculty members and staff be aware that they could be contacted by the auditor and that any communication with the auditor should be communicated to those in charge of the audit. The liaison or the audit manager must also have
a contact list of people who are to be kept informed of the progress of the audit, as well as a list of technical support staff who can jump in, in case the need arises. It would also be beneficial to hold a training session for those individuals who are participating in the audit. These employees would be required to hand in the required documentation and be a part of the mock interviews and discussions on the findings that are to follow.
Contacting the auditors in advance and setting up a short conference where the purpose and aims of the audit are re-discussed can help bring clarity and cohesiveness to the whole process. If you have an internal auditing team, keeping them in the loop is also essential. Most importantly, ensure that the meeting room and interview schedule are set up and ready so as to be as well-organized as possible.
While your internal procedures might be faultless, it is important to note that the external auditor is likely to ask for documentation that will act as supporting material to papers you have already submitted. These documents can include financial statements and policy documentation. Review and fact-check every document for authenticity and to determine its accuracy.
Engage with your auditors in the manner in which you would want them to behave with you in case the tables were to turn. Make sure you offer them directions to your establishment. Because the auditing process can sometimes
take a day, providing working lunches is often mandatory, but remember to keep their dietary restrictions in mind. These lunches can be a good time to relax and let your guard down and basically avoid talking about the audit and
its proceedings thus far. This is a great opportunity for both the auditor and the auditee to get some relief from the tedious auditing process. You can even give the auditor a tour of your establishment. Also, determine if the auditor
will require access to the internet, especially during fieldwork, and if so, provide the required credentials.
All audits begin and end similarly. Audits begin with an opening meeting wherein the finer points of the auditing schedule are brought to notice and discussed and the closing meeting where the findings are brought to light and the date for the next audit is discussed. The actual auditing process occurs in the period between both meetings. However, there are chances that this process might vary from auditor to auditor.
While this sounds fairly simple, being in a meeting room for long periods of time and providing the required evidence and paperwork that is to be reviewed by the auditor can be slightly tedious. As mentioned earlier, keep all
your paperwork ready so you don’t need to go wandering around the office in search of documents, and make sure the auditing process goes off smoothly, without any disruptions In addition, you could enquire and make sure the staff that is required for the audit is readily available. Auditing firms in Dubai or even established independent auditors in Dubai are most helpful when it comes to streamlining this whole auditing process.
Most audits are going to end with a findings and opportunities document that is submitted by the auditor. But there can also be suggestions for major or minor non-compliances.
The findings will be presented to you in the exit interview. Ask the auditor for a copy of the report with the findings. Ask representatives from your company who are part of the internal audit and the general counsel to participate in the discussion. Understand that a follow-up procedure will be required. And most importantly, conduct an evaluation and make the changes as per the auditor’s report.
It is easy to get agitated when the auditor finds areas in your business that might need changing, but this agitation is not going to lead you anywhere. According to top audit firms in Dubai, the job of the auditor is to work with you
to improve your system. It is best to come up with solutions that will support your cause rather than rally against the problem found.
Have a detailed discussion regarding the findings and also come up with a strategy on how to solve problems, if they have arisen. Discuss findings at the time, in detail, and how to best fix them, so that by the end of the audit, you
understand the issue and are already clear on the way forward – this is important, because there is only a little detail of a “finding” that can be put in an audit report, and the context can be quickly forgotten weeks later. Treating
“observations” the same as “minor non-conformances” (and resolving each one) demonstrates to the auditors that you value their inputs and is a good way of evidencing improvements to the overall system in the future.
Whether your business is big or small, an external audit will give you a more comprehensive understanding of the compliances that your business must follow. And though it may seem daunting, there are multiple audit firms in Dubai, audit firms in Abu Dhabi, audit firms in Sharjah, and others across the UAE that will help you tackle the external audits for your business.
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