Audit firm in Dubai
The auditor is defined as the person responsible for examining and verifying the accuracy of the accounting records in the company, and he can be an external auditor from outside the framework of the organization’s system or he can be an internal auditor specializing in this process. It works to ensure the integrity of the internal control mechanisms to fill the gaps that lead to fraud or theft.
What is the purpose of the audit?
The primary purpose of auditing is to provide comprehensive reports to employers in a clear and unbiased manner on the company’s financial position. And also stand on the status of the company culture, policies, procedures and operational performance.
Understand the nature of the client’s business.
One of the most important points that the auditor should pay attention to is knowing the legal entity (company – corporation – charitable association – government agency … etc.), as this results in knowledge of the details of the work. And knowing the type of the facility’s main activity as well as its sub-activities. He must know the form of the organization’s organizational structure, and know the type of application or accounting program used in the organization. Based on these data, we determine whether we will accept this mission or not.
Understand the components of an internal control system.
In this aspect, we have to know the concept of the term internal control, and it is defined as a set of procedures that guarantee a percentage of the correctness and safety of operations within the organization. Whereas, the auditor must understand the internal control system in order to arrive at the audit work plan, so that he can determine the nature, extent and time suitable for conducting the tests that will be carried out. This helps in avoiding many embezzlement.
With regard to internal control, it is the duty of the administration to supervise the preparation of the internal control system so that it helps to control the institution and help in achieving the objectives of the institution and helps the auditor and provides him with fairly prepared financial statements. Research, integrity and professionalism will assist in implementing internal control. There is great importance for the client’s internal control, as it helps him to rely on the reports resulting from the internal control system, and through it, he can ensure that the work is running fully and with high efficiency, and also helps him to respond to the laws and regulations. With regard to the auditor or auditor, internal control helps him to determine the extent of reliance on the financial report of the internal system, and to ensure the elements of internal control.
Evaluate the degree of risk of the internal control system.
What is meant here is to define a measure of the auditor’s expectations that internal control will not prevent material change or distortion, and through which misstatements will not be detected and corrected in case they occur.
In order for an auditor to perform the actual audit, he must first obtain the trial balance and then analyze the materiality to determine which items are the most important and which have a greater impact on the financial statements, then he designs the audit program and then selects a sample and tests it and through you all these procedures collects evidence. Finally, he must keep the task performance sheets so that he can use them as evidence of his work and diligence in accomplishing the task optimally.
Evaluate the results.
After obtaining the results from the selected sample, a specific matrix is used to take the decision to accept or reject this sample.
Issue the report.
It is the last step of an auditor in the task of auditing and issuing a report. The report is considered the final product of the certification processes, expressing opinion, and the auditor informing the users and beneficiaries, of what he has done and the results obtained.
Reports are classified according to results and in several forms, including.
First: the standard report, which is a clean report in which there is no problem.
Second: A conservative report, meaning that there is a slight reservation about a certain part that does not prejudice an opinion on the performance of the enterprise in terms of accounting principles.
Third: The negative report. It is clear from its name that it carries a negative perception about the performance of the facility and may indicate a defect.
Fourth: Abstaining from expressing an opinion.
The difference between internal and external auditor
There are two types of auditors: internal and external auditor.
Whereas, the internal auditor focuses on implementing the company’s systems and procedures, how to implement them, and their suitability for the institution’s situation.
As for the external auditor, he is appointed by the institution to audit its accounts.