Internal audit firms in dubai is a function that gives an independent and objective assurance that an organization’s internal control and risk management system are functioning efficiently. In contrast, internal control is the system implemented by a company to assure the integrity of financial and accounting data.
Objectives of internal audit:
Check Accuracy of Records:
To check the correctness and authenticity of the accounting records, which are reported to those charged with governance.
Identify Accounting Practices:
To recognize whether the standard accounting practices which are deemed to be pursued by the entity are complied with or not.
Ensure Fraud Detection and Prevention:
To ensure detection and prevention of fraud.
Examination of Assets:
Consideration of appropriate authority for the procurement and disposal of assets.
Verification of Liabilities:
To confirm that the liabilities are incurred only for business purposes and not for any other purposes.
Review activities of Internal control System:
To evaluate the activities of the internal control system to report management regarding deviations and noncompliance.
Internal control is a system that contains measures, policies, and procedures which help an organization in achieving business objectives. An internal audit is an activity performed by professionals audit firms in Dubai to ensure that the internal control system implemented in the organization is effective.
Objectives of internal control:
Considering whether the transactions are performed as per the management’s authorization.
Check to record of Transactions:
Checking prompt recording of transactions, the correct amount, and the accounting period to which it belongs.
Comparing reported assets with the existing ones, at various time intervals and taking actions in case differences are discovered.
Differences between Internal Audit and Internal Control:
Internal Audit is the frequent or ongoing audit conducted by an organization’s personnel. The Internal Auditor primarily monitors operational results, verifies financial records, ‘evaluates’ internal controls and assists with enhancing the efficiency and effectiveness of operations. Internal Auditors serve based on objectivity, i.e., they attempt as far as possible to reduce or eliminate bias and prejudice or conduct the subjective evaluation by relying on valid data.
In terms of Internal Control, its role is to examine the adequacy and effectiveness of internal controls processes and make recommendations where improvements are needed. Since Internal Audit should be independent and objective, the Internal Audit does not have responsibility for promoting or maintaining internal controls. It is the leading role of management to implement the policies adopted by the Board or the Chief Executive and to identify, evaluate, avoid or mitigate and control the risks the organization could face in achieving its objectives.
On the other hand, Internal Control is one of the essences of business processes. An internal control system is an essential part of an organization’s financial and business policies that control the strategic, economic, and operational procedures of an organization. The process is based on a system of management information, financial regulations, administrative proceedings, and a method of accountability.
There is a view that an organization could live without an internal audit but could not survive long without adequate internal controls. There can be no doubt that both Internal Audit and Internal Control add value and improve an organization’s operations, albeit in different ways.