How Internal Audit Can Help UAE Small Businesses
Internal audit in UAE is done to evaluate the effectiveness of the risk management, governance, and control processes of a business and improve them. Reports are given to senior management. Internal auditors in UAE that provide services deal with issues which are fundamentally important for the prosperity and survival of any business, regardless of size and structure.
Here are ways in which internal audit services help businesses grow and thrive in the country:
- Boost in company productivity – a service such as internal auditing in UAE involves a consulting and objective assurance activity that’s designed in adding value and improving the operations of a business. It helps organizations achieve the strategic objectives they’ve set by bringing a disciplined and systematic approach in improving and evaluating effectiveness and efficiency of governance, control and risk management process.
- Providing confidence to business management and stakeholders – internal auditors in UAE provide reports to owners of a business which provide details on the evaluation of risks and highlights of necessary improvements. The directors of a business will be demonstrated how the organization is ran and whether it’s been done effectively on the stakeholders or company management’s behalf.
- Quality control – an internal auditor plays an important role of combining consulting and assurance. An assurance activity provides information to the management on how well business systems and processes have been designed in keeping the goals of the business on track. As for consulting, it’s for advising company management on ways to improve processes and systems, as necessary.
- Uncovering of potential or existing fraud – a regular internal audit in UAE is necessary as it conducts an assessment of the controls of a business and help uncover any evidence of abuse, waste or fraud. An internal audit’s frequency will depend on processes or departments that are being examined. When it comes to manufacturing, a regular audit will be required. For human resource, annual reviews will suffice.
- Ensure local legislation compliance – an internal audit evaluates the internal controls of a business and that includes its accounting and corporate governance procedures. It ensures not only accurate and timely data collection and financial reporting but also full compliance to relevant legislation and regulations. Internal auditing also helps in the maintenance of operational efficacy through the identification of issues and correcting any lapse uncovered through external auditing.
How Experts Internal Auditors in UAE Conduct Internal Audit
Although every audit process differs, depending on a lot of factors, processes for internal audit can be similar for most auditing engagements. An internal audit in UAE typically consists of the following phases: planning or the preliminary review, fieldwork, reporting, and follow up assessment or review. The involvement of clients or businesses during every stage in the process of internal audit is very important.
- Planning – during the internal audit’s planning stage, an internal auditor will notify the business regarding the audit, discussing the objectives and scope of the examination during a formal sit-down meeting with the senior or executive management. The information that will be required by the specialist will also be gathered, which are often details on important processes of the business and existing internal controls.
- Provision of announcement letter – the entire staff of a business will be informed regarding an internal audit through an engagement or announcement letter. This letter will communicate all the objectives and entire scope of the internal audit, as well as information regarding auditors which are assigned for the business.
- Initial meeting – this opening meeting will take place in order for a business to describe the system or unit that will be reviewed, the available resources which include funds, equipment, facilities, and personnel, or the entire organization. An internal auditor will meet with senior officers who are responsible for the organization or unit that will be under review. It’s important that a business identifies issues or concern areas which are to be addressed.
- Preliminary survey – during this stage, auditors will gather all relevant information on the unit or organization so as to obtain an overview of operations. The specialists will be talking to key personnel and reviewing reports and other files.
- Audit program – the fieldwork will concentrate on informal communications of a unit or organization as well as transaction testing. It’s during this stage wherein auditors determine whether or not controls are identified during preliminary review and assessment are, in fact, operating properly. The fieldwork concludes list of findings that are significant.
- Audit summarization – upon completion of fieldwork, auditors will provide reports and follow up assessments in order to ensure findings and conclusions from the internal audit done are expressed and improvement recommendations are implemented.
If you want to know more about internal auditing in UAE and how it can benefit the business you are running in the country, contact top auditing firms in Dubai like Farahat & Co today!