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Why does your company need an External Audit?

There Why does your company need an External Audit?

Today many companies think that auditing the accounts once a year is something they must do by law. But most business experts agree that the real value of the audit process is more valuable than that you think.

Today many organizations operate under loss but assuming that they are in profit. This is mainly due to the unavailability of correct financial information or improper maintenance of books of accounts. No doubt, Accounting is a vital success factor in a business. It is what shows the real face of a business. How do you know that your accounting process is going well?

In fact, you need independent, unbiased, and professionally qualified experts to verify and confirm your accounting process and the success of your organization. They are the external auditors.

What is External Auditing?

External auditing is an accounting term that refers to examine the company records and operations to ensure financial statements are accurate. External auditors are accountants who work independently of a particular company (Generally called “audit firms”)

They are important in establishing your small business’s credibility and ensuring compliance with relevant laws. In addition, Auditors confirm that an organization’s claims about its financial position, its profitability, and the process behind these claims, are true and fair.

 

What are the benefits of an external audit?

 

1. Government compliance 

Audit reports are required for many legal and general purposes by many government and non-governmental organizations all over the UAE.

The audit report is required by many Government Institutions and Oil and Gas companies for registration purposes. The construction companies and consultants also need the services of professional auditors in UAE for their classification purposes. It is also required for annual trade license renewal purposes by many companies.

If your company fails to perform auditing every year properly, Therefore, it may harm your company’s reputation and you may lose many business opportunities in the UAE.

Further, it should be noted that the UAE government is going to introduce VAT Tax from 2018 because it is vital to have proper auditing and proper financial records to comply with the tax law properly.

 

2. Provides credibility 

Your financial statements will be more credible if an external auditor evaluates them and agrees that they are accurate. Credibility is important to small businesses, especially during their first few years of business when they are trying to build positive reputations.

For example, the audit report is an important requirement for the banks and financial institutions when you go for finance and loans.

 

3. Re-verification of financial information

From time to time you might receive financial statements from your accountant. How do you know that those numbers are accurate, reliable, and unbiased?

For that, you need the assistance of independent professionals. In other words, They will examine your financial records and ascertain the real face of your business if it’s making a profit or not.

 

4. Fraud prevention

While it may be unpleasant to even think that someone could be defrauding your company, it’s better to know for sure than continual wonder. It’s impossible to spot a fraudster just by looking, and they often turn out to be the person least likely to arouse suspicion. Therefore, External auditors examine bookkeeping records without the filter of personal relationships clouding their judgment. For them, the financial statements will tell the unvarnished truth, and their impartial inspection could keep your business from taking a major loss.

 

5. Expertise

Many small businesses can’t afford to hire expert certified public accountants to handle their day-to-day and ongoing financial records. Using an independent external auditor provides you to verify your numbers and also to learn ways to improve your processes and procedures.

An external auditor notice areas in which you can improve your cash flow, reduce debt-service interest, depreciate assets, take more deductions, or institute other capital management techniques that improve your bottom line.

 

Benefactors of external auditing: 

An audit is always very useful for different types of people in an organization.

 

1. Owners and shareholders of an organization

In many cases, owners and shareholders of a company will not be closely involved in its day to day running.  Therefore, An independent audit is very interesting to them, since it provides a trusted second opinion on the organization’s financial statements and gives some insight into how well it is being run.

2. Company’s accountants and finance directors

These people are essentially in charge of the finances of the organization; therefore they have to make sure that everything is going correctly under their responsibility. An opinion from independent professionally qualified experts is essential for them to rectify their mistakes.

They value working closely with auditors because they can help to solve complex accounting problems and offer world-class advice and keep them up to date with the latest techniques, rules, and regulations.

 

Conclusion

Therefore, it is essential for every company to appoint an auditor to increase its profitability and to make sure that the company goes well.

 

Why Parker Randall?

 

1. Professionally qualified and experienced auditors 

Parker Randall UAE only hires professional qualified auditors, they are Chartered Accountants, Chartered Certified Accountants, Certified Public Accountants, or their professional equivalents.

 

2. Vast industry experience 

We’ve been in the business for almost 20 years and are experts in various types of sectors.

 

3. Cost-effective

Our audit fees are reasonable and affordable for all types of companies.

 

4. Compliance with International standards

As a member of a UK-based international audit firm (Parker Russell International), we are provided diverse technical skills, advice, and assistance from PRI. Also, periodic inspections are done by PRI to ensure that the quality of the audits done by Parker Randall UAE.