An external audit is an unbiased review of a company’s books of accounts by an auditor to determine if the financial statements are accurate and true. An auditor also examines whether the company adheres to accounting regulations and procedures. An independent auditor who reviews accounting records, such as the financial statements, provides readiness and assurance to the company’s stakeholders (shareholders, regulatory authorities, banks, and so on). Because an external auditor is fully unaffiliated and independent to the firm, it boosts the credibility and trust in the company and its financial reports.
External audits cover not only the accounting records but also the processes that a firm follows. As a result, it aids in the identification of inefficiencies, faults, opportunities, and risk factors. External audits are normally not required, but governments may compel them if the firm falls into particular categories (for example, if it is a publicly listed corporation).
The law that controls company auditing in the United Arab Emirates is Federal Law No. 2 of 2015 valuing Commercial Companies Law. Also known as Companies Law.
The following are some attributes of the Companies Law:
External auditing in the UAE is critical for avoiding penalties and boosting a company’s credibility, profitability, and efficiency. As a result, it is critical to understand your company environment and determine when and how an external audit would be necessary, as well as to pick the right external auditor for your needs.
This article was published on 26 May 2023
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