Auditing is the periodic inspection of books and records of an entity / business, in order to detect irregularities or illegal activities, and thus determine whether the information provided are true and compliant with the regulations. Auditing not only ensures transparency in an organization but also helps analyse to the activities of the firm so as to take necessary decisions or make suitable changes. Periodic auditing also enhances the credibility of the management as it provides assurance to creditor, investors, and shareholders. Moreover in UAE, auditing is one of the important methods of ensuring whether the activities of the firm is in compliance with Federal VAT Laws, AML, or ESR regulations as government insists on the accurate presentation of financial statements. Further benefits of getting the books of accounts audited are:

• Auditing makes sure that the book of accounts is maintained properly and updated regularly.
• Auditing of account books helps detect irregularities and fraudulent activities so as to avoid tarnishing the integrity of the business.
• Auditing helps in the valuation of assets and calculation of profit or loss.
• The auditor advises and instructs the accountant in maintaining the books and helps analyze and detect errors and misinformation.
• The advice of a professional auditor contributes to the accuracy of bookkeeping and accounting.
• Audited statements are used by lenders and banks to assist the firm and by investors in case of any business losses.
• The auditor helps determine accurate taxes and presents them to the authority.
• Audited statements have required information on the situation of the company and its financial position, which enables the management to take appropriate future decisions.
• Auditing helps in the accurate analysis of funds and thus to plan the budgets for future endeavors.
• Assist the client making financial and investment related decision and also, helps in capital budgeting.
• Auditing also helps determine the functioning of the company, its departments and thus focus on the areas that need more consideration.
• Periodic auditing instills confidence in the clients, investors, shareholders, buyers, etc. about the functioning of the organization, thus increasing its credibility.
• Auditing ensures that the firm is in compliance with the recent laws and has not failed to meet any requirements proposed by government regulations. Thus it helps minimize risk and prevents the incurring of fines and other penalties.
• An auditor is entrusted with evaluating the assets and liabilities of the company, which aids in easier judgments when it comes to selling or transferring the firm.

Regardless, auditing the book of accounts regularly is crucial for the proper functioning of a firm, in order to determine its financial position, and to maintain faith and integrity in the organization

To learn more about Benefits of Getting the Account Books Audited, book a free consultation with one of the Flyingcolour team advisors.

Disclaimer: The information provided in this blog is based on our understanding of current tax laws and regulations. It is intended for general informational purposes only and does not constitute professional tax advice, consultation, or representation. The author and publisher are not responsible for any errors or omissions, or for any actions taken based on the information contained in this blog.