Significance of Annual External Audit

 

When you have your financials audited, stakeholders find positive value in your organization. An external audit determines whether an organization is showcasing their true and fair value – thereby enhancing the credibility of the business by attesting to its financial health. Accounting companies in UAE consider annual external audits to be very crucial. Read on to know more about the significance of annual external audits:

• External Audits are unbiased, thereby giving a clear picture to the shareholders. Banks and other funding institutions place a lot of emphasis on independent audits, so if an organization is looking for loans – it’s best if they have independent financial audits.

• There might be some issues missed out in Internal Audits, and External Audits then come into your rescue. External Audits help you find the missing gaps, and in case a business is seeking to grow external investment or sell the business – external audits come in handy!

• External Audits provide enhanced integrity on the financial statements, and ensure better financial risk management, along with enhanced internal controls, solvency, etc.

• Any discrepancy in financial data can lead to legal penalties, legal issues, or dissolutions – and to avoid this – being compliant is very important. While the owners might not always have the time to go through the minor details, an external audit helps identify the lack of financial compliance.

• An external audit provides credibility like no other. In the business marketplace, an organization has far better standing when the financial statements are verified. When you look to raise finance or sell the business – audited accounts mean that your business is free of material error or malpractices.

• Last but not the least – an external audit gives you the confidence in your business, and ensures you’re well aware of the standing of your organization at all times.

External Audits are important, as they act like periodic reviews to ensure your business is in good standing. If you’re looking for external audit services, reach out to TRC Pamco, one of the top audit firms in Dubai.

Tips to Record Daily Sales & Expenses of Your Business

 It’s essential for all small and medium businesses to keep accurate records of their cash flow for tax purposes. But daily accounting and bookkeeping can become a little difficult for business owners, given the other responsibilities of managing and maintaining day-to-day operations. Here is where accounting firms in Dubai can come to your rescue.

Now, are you looking for an effective method in recording business sales and expenses?

Read on for a few tips!

• As soon as your business incurs an expense, record it. Most sales transactions can be computerized and auto-recorded – and can be later downloaded into the accounting software. This is one of the most efficient ways to keep a track of all your sales and expenses.

• If you have different product lines, consider a separate set of books for each to handle your bookkeeping in a more meaningful way. This will also help you understand profitability in each department.

• There is various accounting software available, right from QuickBooks to Sage to more, so it’s best to understand the pros and cons of each of the software before deciding to go ahead with one. Bookkeeping services in Dubai are available in plenty, and then can be your rightful guides in this one.

• Keep a close eye on the sales invoice as well, and post information from each invoice to an entry in the sales journal for easy tracking. Along with this, keep an eye on your purchase receipts as well, and record all the receipts so you always have a backup.

• And once you have updated all the financial information – look at the reports – the balance sheet, an income statement, accounts receivables report and accounts payable report – this will give you a wholesome view into your business.

If you need further help, get in touch with TRC Pamco, one of the best accounting firms, providing efficient bookkeeping services in Dubai. Reach out to them today!

A Guide to Understand Different types of Audits in Dubai, UAE

 Before we get into exploring the different types of audits, let’s understand what an audit and the importance of conducting an audit. An audit is nothing but the examination of the various books of accounts, to ensure that all the departments are carrying out all the documentation properly. There is also a physical verification, to ascertain the accuracy of the financial statements as presented by any organization.

Who can conduct an audit?

It’s generally carried out internally by employees or can be done externally by professional auditing firms in Dubai.

Why is it important?

Well, it’s done to check and verify the accounts, to ensure no fraud is being done within an organization, so it’s best to do it in a true and fair way.

What are the different types of audits?

To understand a fair and true picture of your business, it’s important to know the below audits:

• External Audit: Conducted by a third party who has no connection to your business, this one is completely unbiased, and based on facts made available. It truly helps determine the accuracy of your business.

• Internal Audit: These are conducted within the organization by the business owner to propose improvements, monitor effectiveness and ensure your business is compliant with the laws within UAE.

• Forensic Audit: Given that corporate fraud has been on a rise, this one is quite crucial. It’s an audit conducted to understand matters of fraud, financial crimes and any disputes that might arise. In a forensic audit, auditing firms in Dubai investigate the various activities to identify fraud, embezzlement, or any other financial crimes.

• Tax Audit: It’s important for companies to comply with commercial laws and VAT laws in the UAE, and a tax audit is conducted by authorities to ensure companies are complying. There are heavy penalties in case of any non-compliance, and to avoid this – a tax audit is a must!

• Financial Audit: The most common one, this one is conducted to ensure the fairness and accuracy of all the financial statements. An auditor reviews transactions, procedures, and balances, and shares their audit opinion on the statements to lenders and investors.

If you are looking for Middle East based auditing firms, reach out to TRC Pamco, one of the best auditing firms in Dubai. With a global reach, they can be the right partners for you.

Insights on Exempted Licensees under ESR in UAE

 On 30 April 2019, the UAE enacted the ESR in Resolution No. 31 of 2019. Any natural or juridical person licensed by a competent licensing authority in the UAE (licensee) that carries out any relevant activity is subject to the ESR. And on 11 September 2019, the United Arab Emirates (UAE) issued Ministerial Decision No. 215 of 2019 containing guidance for businesses on compliance with the Economic Substance Regulations (ESR), enacted in April. 

The updated ESR states a change in the definition of the Licensees. It now applies to any corporate (within or outside UAE) or any unincorporated partnership conducting relevant activity. Previously, sole proprietors, trusts and foundations also were in the ESR scope, but they are no longer included in the definition of licensees.

The new exempted categories from the ESR notification include:

• Investment funds
• Entities owned entirely by UAE residents, and are not a part of any MNCs, and carry out activities ONLY within the UAE.
• Entities that pay taxes outside of the UAE.
• Branches of foreign parent companies where the income is taxed outside of the UAE.

With the current exemptions, come some changes to the ones that were previously exempted. Government entities are no longer exempt from ESR notifications. Unless they fall in one of the above scopes – they must comply with the updated ESR Dubai rules.

For companies that are outside the UAE but have relevant business operations in the UAE need to evaluate the impact of the updated ESR guidelines on the previous analysis.

It would be advisable to consider and evaluate the impact of the updated ESR on your business and understand if you need to submit or re-submit your Economic Substance Regulation Notification. If you need any assistance for ESR filing in Dubai, get in touch with TRC Pamco, one of the best audit firms in Dubai.