How do audits work

An audit is a systematic and independent examination of books and other business records, together with related physical evidence, for the purpose of expressing an opinion as to whether the financial statements are presented fairly in accordance with specified criteria.

Auditing is a highly specialized profession, requiring the application of a wide range of knowledge and skills. Auditors should have a mastery of accounting theory and practice as well as strong abstract-reasoning skills. They should understand both business processes and financial management practices from the perspective of those who use internal controls, monitor results, prepare financial statements, plan strategies for future success, and make operational decisions that affect funds management. Many auditors also specialize in one area such as financial services or retail sales to better target their expertise toward an industry's needs

Audit fieldwork includes gathering sufficient appropriate evidence to express an opinion on the fairness with which a set of specified criteria has been applied during a specified period by a person or persons other than the auditor performing the audit. Auditors must be able to evaluate the accuracy and reliability of evidence, and they should take all necessary steps to obtain sufficient and appropriate evidence to support their opinion.

Because auditing depends on the auditor's independence and impartiality, auditing organizations have developed ethical standards that govern an auditor's professional conduct. These ethics may vary depending on the country where the company is based, but common rules include:

What can go wrong?

An inexperienced or careless auditor may produce a misleading audit report that does not identify significant deficiencies in internal control over financial reporting (ICFR) or significant misstatements in the financial statements. Reporting such deficiencies or misstatements incorrectly can cause investors serious harm they rely on the incorrect information when making investment decisions. In the worst cases, audits may be conducted for financial gain rather than in an auditor's professional capacity to add value and improve financial reporting.

How can I make sure they're doing a good job?

You should be able to get in touch with your auditor and discuss any questions you might have about their work at any time during the audit process; however, many auditors also offer a formal "pre-review" of the proposed opinion before the final report is issued to clients or filed with regulatory authorities such as the VirtualAccountants LLC (VA LLC) in the UAE. In order to maintain their objectivity, auditors are prohibited from giving advice as to whether a company's financial statements should be approved or how they should be adjusted. However, if you have concerns about the auditor's work, the best approach is to bring those concerns up with your accountant as soon as possible so that any issues can be resolved before the audit report is filed and sent out.

Auditing Standards

The International Federation of Accountants (IFAC) publishes ISA 320 – Ethical requirements for accountants – independence and impartiality which provides guidance on ethical principles that govern professional conduct for accountants globally. This document is regularly updated by IFAC in order to meet changing industry practice and regulatory expectations. The United States has specific guidance on auditing standards in the form of AU Section 508 – Independence and Objectivity which requires that "An independent auditor must be free from restrictions or obligations to the entity being audited. The auditor must maintain his or her independence throughout the planning, conducting, and reporting phases of an audit."

What you need to know if someone is auditing your books or your business" Virtual Accountants LLC (VA LLC) was founded by a group of highly experienced professionals who had one thing in common - they were fed up with the lack of financial transparency which existed amongst many companies here in Dubai.             

It seems increasingly more difficult for SMEs (small enterprises) to get funding these days. One of the main reasons is because investors are now looking for real transparency in order to make well-informed decisions. These days, any company that is audited by professional accounting Services in Dubai has an advantage over companies that are not being audited.