Audit Firms – Roles and Responsibilities

 

External auditors have a critical role to play in validating the company’s finances. Many organizations with potential lenders and investors often require externally audited financial statements before offering credit or providing funds to other businesses. An auditor’s failure to detect material misstatements reflects poorly on the firm and the profession in general. Precisely for this reason, various accounting entities and Best audit firms in Dubai release auditing standards and expectations to define the role of external audit firms.

Opinion on Financial Statements is provided by External audit firms. Best Auditors in Dubai are responsible for providing reasonable confidence that the financial statements are free from material misstatements and prepared according to a standard accounting framework. External auditors however do not fix the problems but offer recommendations for the growth of the company.

• Comprehending the Entity and Its Environment -Typically considered a number-crunching exercise, auditors admit that financial statements don’t exist in a vacuum. External auditors are equipped to acquire a thorough understanding of the work environment, operations, and internal controls after performing an initial risk assessment and comparing your business to others in the industry to identify any irregularities that could originate from incorrect financial reporting.
• Sufficient Evidence is obtained to Form an Opinion -External auditors’ opinions are based on the evidence they examine during the audit. To confirm they’ve collected a good amount of evidence, auditors should gauge the high-risk factors of the enterprise. The quality of the evidence is equally crucial as some evidence must be obtained from reliable third-party sources, such as banks and lenders, to corroborate your financial information.
• Independent attitude from Clients-The audit firm is responsible for maintaining an independent attitude from the business. An auditor must ensure working independently and avoid –
• Serving as an officer for your business or participating in company management.
• The firm or the auditor shouldn’t have any sort of financial interest in your work.
• None of their auditors should have any joint ventures or meaningful investments in the company before starting an audit.

Role of approved (Jebel Ali Free Zone Authority) JAFZA Auditors in Dubai. The companies registered with JAFZA are required to appoint an auditor to do the following:

• Examine and report on the accounts prepared by local and international regulations.
• The auditors’ report states the auditor’s opinion about the accounts that have been properly prepared in accordance with these regulations and in particular whether a genuine and unbiased view of the company’s financial statement is furnished.
• The auditor’s report must deliver details on whether the accounts present an authentic and honest view of the company’s affairs at the end of the financial year and accounts are free from material misreports.
• The companies operating in JAFZA are not allowed to do business on any other activities that are not specified as per the trade license otherwise it should be stated in the report.

The Main Functions of an Auditor include different audit functions, the auditor’s duties, and the scope of work such as:

• Internal Audit -An internal auditor responsibly performs procedures that test the efficiency and effectiveness of company internal controls put in place to attain business objectives. The scope of an internal audit includes all financial and operational controls that are used to build maximum productivity at a company. Auditor’s duties include:
• Provide recommendations to improve ineffective internal controls.
• Investigate instances of potential fraud (even those considered immaterial.)
• Perform reconciliations of financial and operating data.
• Monitor compliance with industry standards, laws, and guidelines.
• Evaluate whether processes and procedures are working properly
• Forensic Audit-The scope of forensic audits is necessary. It can take a significant amount of time and resources depending upon the types of monitoring a company has in place. Thus, allowing a forensic auditor to utilize logs and information captured as part of monitoring to put a precise timeline together.
• Attestation Services-An external auditor provides different services to clients such as guidance on accounting-related matters, technical disciplines, or industry knowledge. Scope of work depends on services generated and is usually bound by an agreement between the client and the auditor.
• Information System Audit-An external auditor is responsible for assessing the internal controls relevant to a company’s IT infrastructure to ensure the Effectiveness of maintaining information security and privacy. They also Evaluate whether the system development life cycle meets necessary standards.

TGS Koya is a trusted name in providing expert auditors and delivering accurate and detailed reports of a company. As per DMCC regulations, every Company must appoint a DMCC approved auditor in Dubai or an equivalent to examine, prepare and report error-free statements in accordance with International Financial Reporting Standards.