Starting a new business brings the responsibility to evaluate business performance regularly and continually. To continue successfully operating, business owners need financial audits to help them assess performance and identify problems. Audits are essential to keep business in line with plans, goals, and objectives.
The end of the financial year is a busy time for companies. Amidst all the last-minute financial statements and stock scramble, a financial audit might be the last thing on your to-do-list. However, an annual audit is arguably one of the most vital aspects, especially during the tax period. Thus it is crucial to prepare an audit checklist beforehand.
A Financial Audit Checklist for Small Businesses
Conducting an annual audit is like doing a physical exam of your business to make sure everything is working smoothly. The nature of your business will determine the type of audit for your company. Therefore, it is highly recommended that you consult one of the Top audit firms in Dubai to include all the details of your business that you need to focus on during the audit.
Here is an example of an audit checklist that you can use for your business.
Small Business Complete Audit Checklist
To begin with the checklist, the first thing to do is to break down your business into segments and departments, as shown below:
1. Organizational Structure
- To ensure there are clear and well-defined duties and job descriptions within the organization.
- To make sure all the roles of the employees and management are clearly defined within the organization.
- Identify any potential gaps in the structure and roles that need to be filled in the company.
- Analyze structural, organizational problems, and improve overall performance.
- Identify organizational issues like talent, structure, and processes that are impacting the productivity and employee engagement.
2. Business Objectives
- To ensure the company is adhering to its goals and objectives
- Promote transparency and improve corporate governance
- Analysis of business controls and ensure that they are suitable for the company.
- To assess whether the company is managing the business depending upon its organizational goals.
- To ensure the business processes are within the desired standards.
- Review all the accounting processes and bookkeeping.
- Make sure the company is using accounting software to keep the financial records efficiently.
- To make sure the company is not spending too much time and resources on bookkeeping and recording.
- To make sure the business financial system is helping with cash flow.
- To ensure business growth forecast to see where the company is headed.
- Is the company following an adequate cash flow management system as is following a budget?
- To ensure that the company is strictly following the budget system and the budget process is operating effectively.
- Identify poor budget allocation and overspending to find solutions
- To make sure that the company profit figures and expenditures are comparable against the industry data.
- Analysis and classification of costs and ensure the tightness of budget allowance
- Evaluate and review the operational procedures and purchasing systems.
- Review pricing policies
- Ensure quality control and profitability
- Conduct a supplier overview and evaluate product quality
- To compare and rank the productivity and performance of various departments in the company
- Identifying bottlenecks in the processes and provide solutions.
6. Human Resources
- To ensure that the business in compliance with local and state HR regulations and laws.
- Ensure a safe work environment with health and safety in check.
- To ensure that there is a proper system in place for recruitment, selection, and training of new employees.
- Does the business conduct regular productivity and performance evaluation and appraisals?
- To review employee wages, working hours, leaves, and overall employment conditions and details.
- To determine if the marketing budget is giving a return on the investment.
- Evaluate and adjust marketing plans according to your business goals.
- Does the business have a proper marketing strategy in place?
- Provide a benchmark for monitoring marketing activities in the future.
- To ensure communicating a consistent brand message to the customers
- Help find new and unknown market areas for business growth
- Ensure tax regulations are up to date
- Ensure all records and financial transactions meet the FTA standards and comply with regulations.
- Review all the balance sheets and profit/ loss statements for tax planning.
- To ensure all the financial statements are appropriately recorded for tax purposes.
- Analyze and evaluate tax control units to reduce taxes.
- Assist businesses in filing taxes and returns.
9. Risk Assessment
- Review all the business processes for proper risk management
- Make sure the company is insured against all employee and professional risks.
- Identifying potential risk areas and misstatement of financial statements.
- Evaluating the company’s internal controls to identify deficiencies in relation to governance and corporate culture.
Business Audits – Necessary and Valuable
Conducting a comprehensive business audit is critical in order to ensure that your company is moving in the right direction with a clear financial plan for the future. Top audit firms in Dubai can simplify all financial and business tasks to achieve before the end of the fiscal year. With the help of these experts, you don’t have to juggle all the aspects of the business and look for lost financial statements at the end of the tax period.
Contact your audit firm to help you create this checklist for your business and have better control of your company.