Showing posts with label Auditors in Dubai. Show all posts
Showing posts with label Auditors in Dubai. Show all posts

Monday, 17 October 2022

Audit and see how to prepare your company

Learn about the main types of audit and see how to prepare your company

 Audits are essential for companies of all sizes and sectors. After all, they ensure management in accordance with rules and laws. That's why there are different types of audits. Know the main ones and optimize your business!

 Good management involves a series of processes and adaptations to the most varied rules and regulatory laws. From tax obligations to labor, tax, accounting, among others, all must undergo some validation. That is why there are several types of audits to be applied in companies.

 Auditing is the right process to ensure security and minimize business risks. Without it, it is impossible to assess whether the processes are being carried out properly. Based on what is found in each of these audits, it is possible to certify whether there is compliance in the processes, according to the strategy of each organization.

 To optimize the control of your routines, check out the main types of audits, why it is important to implement them in your company and how to perform them in 7 steps!

 What are the most common types of Auditors in Dubai?

 As you can see, the audit is an essential tool to ensure good organizational management. But which types can you adopt, in practice?

 First, it is necessary to clarify that we can separate the types of audits in two different ways.

 ·         By the way it is performed, that is, whether internal or external;

·         According to the sector or activity.

 However, these types of audits should not be viewed in isolation. That is, internal audit is necessarily promoted in some sector, for example.

 Thus, we can structure the audit types as follows:

 1 - Internal Audit

 It is the modality in which someone or a team of professionals from the company itself is responsible for the audits.

 Here, the objective is to verify if the accounting and internal control processes are effective . In order to preserve consistency between internal procedures and policies defined by the company.

 Within this type of audit, we can have:

 Accounting audit

 His biggest concern is to preserve the company's assets . Therefore, it assesses whether the organization's assets are being managed in accordance with the guidelines established by the company itself. And also, if they are in accordance with accounting principles.

 Its objective, therefore, is to reduce corporate improbity rates .

 In this sense, the accounting audit is the procedure that thoroughly examines the company's records and documents. To verify that the information is correct and if there are any changes to be made or corrections to be provided.

 Accountants already have the conventional practice of checking documents , records and cross-checking data. Therefore, examining the performance of accounting operations through files and cross-referencing information to check for inconsistencies are already basic audit processes.

 This type of work is quite common, and only requires the organization to have a good accountant, who works with a focus on analyzing processes and results.

 Tax and tax audit

 A very important point for the legal security of the company, the tax audit aims to reach laws, regulations, rules and organizations associated with tax law.

 That is why, often, tax auditing is also included in this effort. After all, tax documents also serve to attest to the regularity of the operation, following the guidelines of the supervisory bodies.

 In order for them to be successful in their management, it is important to map out the tax and fiscal obligations related to your business, as well as to define a professional or a team specialized in the organization of documents, issues, etc.

 Operational audit

 Here, the objective is to evaluate the company's day-to-day functioning , providing an operational diagnosis and proposing solutions aimed at greater efficiency and economy.

 The main factor to be evaluated here is the relationship between the company's internal processes and the use of resources.

 Systems audit

 We know that technology is a great ally of productive and economic operations. That is why, in order to remain competitive, many companies have adopted management software to achieve success and growth.

 In this sense, these technologies also need to be audited. After all, it is necessary to evaluate the efficiency and performance of the technological solutions adopted by the company .

 Quality audit

 The quality audit assesses whether the products or services provided by the company are in accordance with the guidelines established by the company itself .

 In addition, they check whether they comply with external standards, such as those issued by public authorities responsible for health surveillance .

 Environmental audit

 As the name implies, this type of audit is concerned with the impact that the company's activities have on the environment . It consists of investigating the norms or parameters of a company, in relation to its interaction with the environment .

 Thus, choosing suppliers that pollute less or that do not promote laboratory tests on animals would be examples of solutions in this sense.

 This type of audit serves to verify that the company is complying with the regulations laid down by laws focused on environmental protection. This is because, in some cases, it can end up leaving aside the ecological aspect to obtain more profits.

 Compliance audit

 Here, we can understand compliance as compliance with established criteria and standards , as well as the agreements signed by the company and its respective mission, vision and values.

 It is an audit that aims to guide all hierarchical levels of the company in order to maintain daily compliance among employees.

 In this way, adequate supervision is ensured, attentive to transgressions and failures that may go against the company's objectives, such as standards of conduct to serious faults, such as fraud.

 This audit comes with the establishment of actions and training to raise awareness of the team and preserve the institutional image, which also helps in risk control and adds value to the brand, which operates according to ethical standards.

 2 - External Audit

 The external audit is the one carried out by independent auditors, with no employment relationship with the audited company .

 As with internal audit, its role is also to evaluate the company's internal systems. Therefore, the ideal is for the external auditor to work in partnership with the internal one.

 The types of audits performed by the external audit are no different from those promoted internally. Thus, it also makes use of accounting, tax, fiscal, operational, environmental audits, etc.

 However, what changes is the focus of each one. Generally, when performed by an outside party, the intention is to obtain an ISO quality certification . That is why the professional will assess whether all the required points are being followed in practice.

 On the other hand, the internal audit is the one that will guarantee, on a daily basis, that the processes strictly follow the rules. That is, preparing the company for this careful analysis by third parties.

 The external audit also works as a consultancy . Therefore, its focus is precisely to assess the reliability of accounting records.

 Only through audits is it possible to know if there is a gap between theory and practice. In addition, with them, we will understand what must be done in order to better use the company's resources and achieve the goals set.

 How to prepare your company for any type of audit?

 If your company is about to receive an external audit, it is worth analyzing the processes from within and starting with an internal audit to optimize management and control routines in search of non-conformities that need to be resolved.

 So, check out a step-by-step guide to implement this practice in your business!

 Create an action plan

 For the audit to be carried out, it is first necessary to prepare a document with everything that involves the organizational day-to-day.

 This involves the integration of all sectors of the company. In order to emphasize which are the processes to be analyzed, the reasons for this investigation, who are responsible for each one of them, the deadlines for carrying them out and all other questions about the audit work.

 It is interesting that this action plan covers the entire year of operations, that is, it is valid for 12 months and is reviewed annually. This will facilitate the scheduling and control of each audit, as well as the delivery of final reports.

 Formalize the planning

 This action plan must be known to all employees. After all, those involved need to know the rules and policies of the business. This involvement must be part of the company's culture, and not just happen in moments close to the audits.

 So, document all actions in order to record and explain everything to employees. It is also interesting to appoint a responsible professional for guidance and clarification of doubts about the procedures defined in the plan.

 Identify sectors and relate their actions

 Which areas should be audited? In which processes? This mapping is important because, although most processes are interconnected between more than one sector, the requirements for each area are different.

 Therefore, it is necessary to identify sectors and establish performance targets for good results in audits.

 Standardize processes

 As a complement to the previous item, standardization is essential for the analyzes to be carried out in a coherent way. In addition, they increase the chances of good results in audits, since everything is properly organized.

 Make a schedule

 Each of these types of audits is long-term, that is, they are not resolved overnight. As these are ongoing processes that must respect deadlines, it is necessary to establish dates according to the order of priority of each process.

 Organization is the watchword for the audit to be successful, therefore, the elaboration of a schedule allows employees to deliver the necessary tasks on time, as well as develop good practices for the operational routine.

 Use checklists

 The adoption of an online checklist allows the manager to monitor operations in a much more assertive way. This is because technology favors the application of questionnaires, scheduling and data extraction for analysis.

 Thus, both the day-to-day and the audit process are optimized. The company starts to follow best practices and standardize its processes.

 What is the importance of promoting the types of audit in the company?

Promoting audits is important for companies for a number of reasons. First, we can highlight that it allows managers to have a faithful picture of the business' progress.

 This facilitates the identification of processes that are correct and also of critical points, as well as everything that needs more urgent action.

 In this sense, the audit:

 ·         Allows a broader understanding , as it covers all areas of the company;

·         Presents suggestions to improve internal control ;

·         Helps to eliminate waste, promoting cost reductions ;

·         Improves operational quality , increasing productivity ;

·         Ensures that procedures are performed correctly ;

·         Evaluates whether accounting data and management reports reflect the company's reality or not;

·         Identifies fraud, losses and deviations that are impacting the company's financial planning;

·         Evaluates the activities developed internally and also by third parties;

·         It helps in the search for operational efficiency.

 And, in the midst of all these attributions, we can point out 3 main benefits of including the types of audit in your daily life:

 1. Improved internal control

 When the audit analyzes internal processes, it identifies flaws so that they can be quickly remedied. This directly contributes to optimizing the control .

 After all, it allows monitoring performance and correcting inefficient strategies. In order to promote continuous improvement !

 2. Reduction of failures and deviations

 If carried out periodically, audits allow for improvements to be made to reduce the occurrence of failures .

 Consequently, the tendency is for financial deviations to also decrease. Bearing in mind that it is necessary to prove the expenses. And yet, to match what was previously stated.

 3. Stimulates good practices

 The great benefit of auditing is that it creates a more transparent environment . After all, all deliveries are audited. Facilitating the discovery of inconsistencies.

 In this way, the employees themselves feel more motivated to take ethical attitudes. Not just because they would be discovered. But because they will be following the same line of action as the business as a whole. 

 


Friday, 1 July 2022

Types of audits that exist

 The audit is one of the best known financial resources. Although it does not always have the same objectives, since these vary in each case, in a generic way it can be defined as an examination of the accounts and assets of a company, as well as the result of internal operations.

 What is an audit: definition?

 An audit examines and evaluates the operation of a company from one or more perspectives. You can focus on your finances, your accounts, quality or job security. It can be oriented towards a specific goal, such as sustainability; or limited to ensuring that the organization aligns with the enforceable regulatory requirements.

 Audits look at things like financial statements, ledgers, processes and procedures, workspaces, or products to be marketed. Many companies have routine audits once a year, while others only does them on time, for specific reasons.

 What is clear is that, in addition to being great allies of compliance, audits can help to detect problems within the business and, in the long term, help to direct the company and boost its results.

 Who can do an audit?

 An audit must be carried out by a person in charge or a group of people specialized in this matter, that is, who have a corresponding qualification and demonstrable experience, in addition to having independent criteria.

 Objective pursued by the audit

 Every audit has the objective of preparing a document in which the results of the process are collected and that, at the same time, serves as a reference for third-party agents, whether they are members of the company itself or of an official body or institution that has requested the start of the Auditors in Dubai.

 Audit characteristics

 There are six auditing principles, on which auditing is based, in accordance with the ISO standards:

 ·         Integrity: any audit must be based on professionalism.

·         Fair presentation: Each audit has a responsibility to report its findings not only accurately but also truthfully.

·         Due Professional Care: Each audit should be conducted in such a way that good judgment and due diligence are applied to the process.

·         Confidentiality - Much of the information that is collected and shared during an audit is confidential in nature. Your safety must, therefore, be properly ensured.

·         Independence: the audit, whether carried out by an internal or external auditor, must be impartial and the conclusions must be objective, without being influenced by any member of the organization's management.

·         Evidence-based approach: The audit conclusions must be reached in a rational manner and must not only be reliable but also reproducible. The only way this is possible is for the audit process to be systematic and evidence-based.

 Main types of audit. Which one suits me best?

 Auditing as a legal resource has evolved in recent decades, giving rise to various specialties. At present, 5 main types of audits are known that differ basically by the objectives and the agents that carry them out.

 What kinds of auditing are best for the business?

 Let's see what each of them consists of:

 1. External or legal audit:

 This is an examination of the accounts that is carried out by legal request. The idea of ​​the procedure is to verify that the financial status and operations of a company agree with the official records. In these cases, the auditor is an independent person who has nothing to do with the company.

 2. Internal audit:

 In this case, it is an evaluation process carried out by the members of the company itself. The objective is almost always to review the processes that take place in it and from there to propose solutions. This audit is voluntary or at most requested by management.

 3. Operational audit:

 Its central objective is to increase the performance of a company. Although it can be performed by both an external agent and an internal agent, what is sought is to review the procedures that are part of the day-to-day life and improve the level of productivity. In other words, it goes beyond the review of financial statements. A good example of this type of audit is the one carried out to determine whether a company meets minimum quality standards.

 Read also: ERP Accounting Software solutions in Dubai

 4. Public or government audit:

 It is the one that is carried out directly at the request of a government entity. Its objective is to review the financial statements of companies and identify any type of irregularity, such as tax evasion, unjustified financing or non-compliance with labor laws. In United Arab Emirates, this task falls to the Court of Accounts.

 5. Computer audit:

 Almost all companies depend on computer systems. Therefore, it is necessary to carry out an evaluation from time to time and, if the case requires it, update and adapt them to the requirements of the context. The two main types of computer audits are those carried out in computer systems (ICS) and those of electronic data processes (PED).

 Other kinds of audit

 It is worth underlining that in recent times, types of audits specific to the context in which we live have emerged , such as environmental auditing, ethical auditing and economic-social auditing, among others.