How to perform an audit?

by Aaa Cas Auditors & Business Consultant in Dubai

Regardless of which audit will be performed, it is important to follow a script that comprises from the phase of identification of the company's processes to the evaluation of results. This can be done as follows.

 

Start by mapping business processes

 

If you do a financial audit, for example, look at the financial sector. Start to list and identify the company's financial practices, such as cash flow management, payment of suppliers, control of accounts payable and receivable, collections, reconciliations and transfers, among others.

 

Create a task map to make the flow of financial processes more clearly visualized.

 

Identify risks

 

After doing the mapping, analyze each registered routine, checking the way the actions are being carried out and identifying possible risks.

 

The idea is to thoroughly analyze each task in search of what disobeys accounting standards. At this stage, it is essential to have experts on the subject so as not to let any details be ignored.

 

Classify internal controls

 

After identifying the risks, check if the company can mitigate or eliminate them, that is, if it has the tools to do so.

 

In the case of financial analysis, this concerns controls, such as financial reports, write-offs, electronic authentications, fraud protection systems, electronic document management , among others.

 

Test your internal controls

 

This is the time to assess whether the company's internal controls are really efficient. To this end, the audit uses techniques and procedures capable of checking whether the risks identified can be minimized in a way that brings security to the company. Thus, it is possible to guarantee that the processes are being properly carried out and to classify the level of security of each one of them.

 

It is the auditor's responsibility to verify the efficiency of the internal control and, in case of problems, evaluate its impact on the sector in which it operates and on the company as a whole.

 

Analyze the results

 

The process described in the previous steps must be redone in each routine of the company so that the audit can gather the information necessary to present results based on the evidence.

 

Thus, in the case of positive evaluations, the auditor must make a report informing about the effectiveness of the processes and recommending their maintenance.

 

In view of the fact that some routine is incompatible with the requirements, he must use this report to identify the problem, informing how and why it happened. Finally, the auditor suggests the most appropriate actions to deal with obstacles and how they can be put into practice by the company.

 

What is the importance of conducting an audit?

 

As seen, auditing is essential to improve the way the company deals with its activities. In addition, it is also important in combating problems such as fraud and even theft within the company.

 

Small errors, which may seem insignificant within departments, when added together, are capable of representing a significant obstacle to the interests of the organization, generating losses that prevent it from growing .

 

With the audit, it becomes possible to identify problems and assess the risks they bring, whether motivated by errors or fraud.

 

It is a procedure that guarantees management a better understanding of the reality of the company and the effectiveness of the different processes that are part of its routine.

Read also: ERP Accounting Software solutions in Dubai

 

In addition, by offering solutions aimed at improving the organization's internal control, the audit allows the creation of a solid basis for carrying out planning and executing practices capable of directing the company towards more expressive results.

 

In this sense, the audit goes beyond the action that aims to alleviate problems. We can say that it acts as a strategic ally for the company, as it allows greater operational efficiency in the processes and, thus, it offers security for the enterprise to grow with activities under control and without risks from the legal point of view.

 

When to do an audit?

 

It is essential to highlight that, contrary to what many people think, the audit works much more to help the company than to bring losses. Its main objective is not to “hunt down” problems and identify those responsible for them - although it may encounter eventualities - but rather to act as an aid tool so that management knows how to better handle processes and data.

 

The idea, in general, is to guide the organization in the right way so that it can achieve efficiency in its procedures, without this being incompatible with due compliance with specific rules.

 

Therefore, the ideal is for the company to use an audit whenever there is a need to direct its practices to a safer and more rational way.

 

Finally, there are many benefits that an audit can bring to an enterprise. It is through it that companies are able to find ways to improve their corporate governance practices and ensure due transparency to attract investments and win customers in the market. Likewise, it makes it possible to make decisions based on more reliable data and processes , which guarantees more rational choices for management.

 

You may have already asked yourself: how do you know if it is feasible to improve business processes safely? With an Auditors in Dubai, you can identify opportunities to transform not only the procedures and systems, but also the company's internal controls, ensuring that the activities will take place in the most qualified way possible. Thus, management will be able to recognize any risks to the company and take corrective action.

 

So, keep in mind that, regardless of the company's objectives, whether they are to improve financial, operational and even environmental practices, auditing is a procedure that can always be considered in the search for solutions. Start to see your business from this perspective and act looking for the benefits.

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Created on Oct 25th 2021 02:36. Viewed 201 times.

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