"By failing to prepare, you are preparing to fail." - Benjamin Franklin
The saying of Benjamin Franklin brings the truth even when it comes to the financial audit of a business. Lack of proper planning is one of the most fundamental reasons for audit failure. Keeping this into consideration, the business owners should comply with the planning requirement to stay prepared for an audit.
There is no denying that excellent audit planning is a crucial activity for ensuring a successful audit. It means that the companies should manage everything starting from the documentation to the preparation of required equipment and human resources.
Is your company ready for an audit? If not - the article is aimed at helping you get an extensive reading on the audit planning process and its elements. Keep reading!
What is the audit planning process?
In the simplest word, the planning process of audit is the phase when companies prepare for an audit. It is one of the fundamental components of internal and external audits. A comprehensive strategy to fulfill the requirements is necessary to minimize the risks and to improve the efficiency of the audits.
Generally, the business owners acquire the services of top audit firms in Dubai for handling the affairs related to financial review and examination of accounting records. It helps the companies to prepare for better compliance with commercial laws and accounting standards.
Importance of audit planning
Planning for financial review is certifiably not a straightforward activity, but it is a cycle of various processes. It includes the considerations of the customer industry and administrative variables besides all other things. The business owners have to manage the customer tasks and organizational assets for heading towards their mission.
Luckily, the difficult work of appropriate planning may empower more effective review execution. However, it furnishes evaluators with significant risks of the executives’ methods in the auditing process. For this reason, the companies should focus on the guidelines provided by the government institutions for audit review. In this way, the planning for audit plays a critical role in the successful financial management of an organization.
Audit Planning elements that every business should consider
Nevertheless, planning is the first and foremost important step in the overall management of financial audits. However, business owners may overlook the importance of conducting an internal audit owing to complexities.
Are you among those? Let’s consider a few essential elements of audit planning to help you go through the process successfully:
Perform a detailed research
It is essential to comprehend the business cycle for adequate preparation. You should inspect the business capacity. If you are inexperienced with it, perform a detailed researched to identify the key areas. Don’t forget to survey inner systems, scan the web for assets, and look for help from industry specialists.
Initiate open communications among the teams
It is better; the reviewers and auditors contact the auditee sooner because business owners know the health of their business at the right time. But, there is a certain element of anxiety associated with any audit. Therefore, it is better to start open communication within the teams of the accounts department.
It will considerably help the accountants to gain confidence for facing the auditors. The review of the financial assets of a company can become tricky without ensuring the same page of trust and clarity among the employees.
Don’t forget to ensure face to face communication as it is consistently ideal. In case that it is unimaginable, calls are the designated teams are the best thing. Abstain from conveying by email if conceivable.
Conduct a walk-through Process
Rehearsals are always an excellent way to prepare the accountants and other staff of the financial departments. However, it is imperative to recognize key business goals, strategies utilized to meet destinations, and relevant principles or guidelines.
A walkthrough is a process of visiting the offices for an in-house audit. It helps the business owners to collect and analyze the essential accounting data with nature, reason, volume, size, or unpredictability. In this way, the professionals filter financial archives or records for general auditing conditions. Every one of these exercises furnishes chances to interface with the auditee and construct compatibility before the proper passage of the actual auditing process.
Identify the risks in the planning process
Most importantly, the auditee must realize the risks before it actually starts affecting the audit process. Through investigation and examination of accounting, records can help in recognizing perils. Don’t get nightmares when you can hire top audit firms in Dubai for a comprehensive analysis of all your assets to eliminate the risks in financial statements.
No doubt, the business people should focus on meeting the business objectives while controlling and eliminating the risks. Evaluate the chances with the auditee reliant on the probability of occasion and anticipated impact. Consider control design, gaps, or assuaging factors to choose whether the control system enough mitigates possibilities.
Ensure Financial Integrity with Improved Audit Planning
Summing up, auditing planning is one of the main processes for financial evaluation. However, it is not an easy feat, as you have to deal with a lot of things crucial for effective preparation. You can do this by start planning today as the earliest is the best when it comes to optimal management of accounts in the business.
It is essential to recognizing inconsistencies to affirm a condition or shortcoming earlier to ensure a successful audit. Don’t forget to perform information investigation before starting the financial evaluation work in accounting departments.