How to achieve a successful annual audit for your company

For good reason, audit firms in Dubai are regarded as the gatekeepers to a company's reputation. They uphold corporate governance while assisting shareholders and other company parties in making important financial choices. The business companies' law Federal Law No. 2 of 2015 helps to explain the auditing procedure in the UAE.

Every joint-stock company that is a limited liability company LLC is required by Article 27 of the Commercial Company's Law or Company Law to select one or more UAE auditors to audit the accounts each fiscal year. It enables alternative business models, such sole proprietorships, to choose an auditor in accordance with legal requirements.

The type of companies determined under the law should prepare financial accounts yearly and need to follow the international accounting standards and practice while creating or preparing the report, that’s why giving a clear overview of the profits and losses of the company.

Practices to successfully achieve an annual audit are as follows:

It is crucial to keep in mind that a little pressure can be expected if it is your first time undergoing an audit in UAE since auditors are occupied during audit season, given the partaking of audits for other companies on the same days. Auditors have to deal with monetary restrictions. Taking time to aid auditors with all the information they need will be beneficial for both of you and will make way for a smooth operational audit process.

Keep key documents ready to give auditors for preparation of the annual audit report:

1. Payroll Records
2. List of all bank accounts
   
3. Legal documents such as Memorandum of Association, Number of shares, Trade license, Tax registration number and share incorporation certificates.
   
4. Minutes meeting
   
5. List of all transactions
   
6. General ledge
   
7. Trial balance
   
8. Copies of leases, loans, contracts
   
9. Current loan statement
   
10. VAT returns filings
    

In auditing, there exists a term PBC which means provided by the client. The auditing firm you hire will set a timeframe and request a list of information they will need. Remember, this information needs to be given as quickly as possible.

To know exactly what to provide the auditor, it’s always best to communicate with the auditing firms in UAE

In the case of detection of errors in auditing, assist the auditors

When an auditor carries out testing, he may go through detection of errors in auditing, or several inconsistencies. In such a situation try to determine what the auditors were testing for as this could be an unintentional blunder on your part, clarification and communication are key. You can either provide them with new data or be honest by letting them know that you don’t have the needed data.

This is a common situation that occurs often with a lot of small businesses during their first audit or when they hire a new audit firm in Dubai, so, there is nothing to be afraid about.