Termed as the independent examination of the financial records which is likewise being prepared by an organization, it is the external audit. External audit, also known as the statutory financial audit, aims to check and verify the accuracy of statements and an organization’s financial standing. Through external audit, the financial statements being prepared is similarly check whether it is done in accordance with the set laws and accounting standards. It is an independent examination of the financial records prepared by an external auditor.
Who are the external auditors?
An external auditor is a professional, and independent third party who is not actually part of the organization being audited. They perform an unbiased review of the financial records of an organization. The organization’s accounts and financial statements are similarly being examined by an external auditor. They have the access in the accounting books, payroll, purchasing records and other financial reports of the company to see its weakest points or any of its irregularities and where the strategy for efficiency or improvement can be directly utilize and recommended in the company.
Aside from the above-mentioned responsibilities of the external auditors, they are correspondingly accountable of the following:
- Meeting the organization’s staff to gather information
- Formulating strategies in audit procedures
- Implementing the audit procedures
- Spotting all the existing risks of an organization
- Evaluating the financial report of an organization
- Preparing the final audit report
- Reviewing the final results of the audit report with the clients
Advantages of External Audit
- It gives a comprehensive report: The demonstration of the overall operation of the company is being presented in an external audit report. The external auditor similarly makes sure that the accuracy of the information in the books of accounts is inevitable. By dint of these, it will help the management to contemplate actions towards any erroneous process that will be found in the report.
- It identifies the weaknesses of the organization: An external auditor works on the overall systems and controls environment of the organization. Through external audit, the weaknesses inside the organization, specifically in the accounting systems are being recognized. With this, the external auditor will then make recommendations on how to make the business more efficient and less prone to fraud or error.
- It conforms with the law: The external auditor works on the books of accounts of an organization, making sure that they are obeying the rules and regulations of the concerned authority. Similarly, they will make sure that the accountants of the company are updated with the same rules and regulations of the concerned authority and of the government.
- It saves time and resources: With the help of the external audit report, the indisposition of an organization can be simply detected and through this, it will be way easier to locate where specifically the improvement of work is needed to be done. Because of this, there would be fewer chances of wastage of time and resources.
- It is unbiased Since an external auditor is an independent third party who has no direct relationship to any one inside the organization being audited, certainly, the audit report will be neutral or unbiased.
We can be your External Auditor
A firm doing business in UAE has to submit its audit report 3-6 months at the end of the financial year and with our expertise in terms of working with the external audit, we make sure to provide your company the best external audit report in the UAE. AMCA is a licensed and approved auditor by the Ministry of Economy (MOE). We are listed in all major free zones and our audit reports are accepted across the UAE.