For any business to succeed, precision and accuracy in auditing and accounting systems play a crucial role. Fortunately, over the past few years, legislation and improvements in technology have meant that when it comes to the standard of auditing, the bar has been raised significantly.
Haroon Juma, Managing Director, SimplySolved, says that accounting standards have seen great developments in the last five years.
“With the introduction of VAT since 2018, companies have made positive steps to improve systems, people skills and processes. Previously the norm was managing the accounts on spreadsheets. However, now even the smallest businesses operate better accounting procedures and, as a result, audits of internally prepared financial statements have become less onerous.”
Laws and regulations improve audit quality
As businesses adhere to comply with the regulations in the UAE, the importance of accurate financial reporting grows.
“Businesses are now more aware of the importance of financial reporting not only in terms of deriving insight into a business’s financial performance but also to comply with the strict obligations introduced under the UAE tax legislation,” says Juma, adding, “Every transaction should meet specific calculation requirements to assess tax liabilities and require supporting documentation including contracts to justify any accounting entry. These legal obligations have made the biggest impact to reporting standards in the broader UAE economy.”
Certainly, regulations and direction from governmental organisations such as the Ministry of Economy (MOE), have ensured that auditing standards remain high.
“Aligned with the UAE’s trait of constant and continuous improvement, the MOE plays a significant role in regulating the auditing and accounting profession in the country. MOE sets the standards and requirements for auditors operating in the UAE, conducts professional examinations, and mandates continuing professional education programmes for auditors. The free zone regulatory bodies further regulate the auditors with their own rules and licensing requirements for their respective free zones,” says Priju Dominic, CEO of AAAA Auditors.
Another positive impact on the industry is due to improvements in technology.
“The evolution of technology has significantly impacted efficiencies through enhanced sampling techniques, fraud detection, risk assessment and opened the windows for a continuous audit rather than a periodic audit,” says Dominic, adding, “Digitised documents enable remote auditing and have opened multiple fronts of verification for the auditors. Blockchain and AI will further elevate the audit function to newer levels in the times to come.”
Technology improves accounting processes
There is no doubt that technology has come on leaps and bounds in almost every field. However, for the accounting industry, not only do new innovations mean more accurate audits, but they also give auditors time to spend on other crucial tasks.
“The latest technological innovations have been a game-changer for auditors. Automation tools in our software, Wafeq, handle repetitive and time-consuming tasks, allowing auditors to focus on more nuanced aspects of their job,” says Nadim Alameddine, Founder and CEO, Wafeq.
“For instance, reconciliations can be done in real-time, and anomaly detection tools can highlight unusual transactions instantly. This not only speeds up the auditing process but also ensures that auditors can dedicate more time on analysis, interpretation, and offering actionable business insights. Advanced analytics also empower auditors with predictive insights, allowing them to forecast potential risks and advise businesses proactively. In essence, technology has significantly elevated the standards of auditing, making it more reliable and insightful than ever before.”
Thanks to these developments from different software providers, there are now numerous cutting-edge accounting systems in the workplace.
“Business management software providers are deeply committed to raising the bar when it comes to audit standards. They achieve this by strategically leveraging the vast array of technological advancements available in today’s ever-evolving landscape,” says Vikas Panchal, General Manager, Middle East, Tally Solutions.
“Service providers of business management software solutions embrace cutting-edge technologies such as artificial intelligence (AI) to further improve the audit process. AI-powered solutions can automate repetitive tasks, detect anomalies, and analyse large datasets with unparalleled speed and accuracy. By incorporating AI and other innovative options into their solutions, these companies make the lives of auditors and users significantly easier,” he says.
Cloud-based accounting systems are also becoming popular in the financial sector which allows easy collaboration and data access among stakeholders, including accountants, auditors, and clients, says Jiby Joseph, Partner, Jaxa Chartered Accountants.
“This improves transparency and efficiency in the auditing process. Advanced data analytics and AI tools can analyse large datasets quickly and accurately. Auditors can use AI to detect anomalies or patterns that might indicate fraud or errors,” Joseph explains.
For businesses, the benefit of implementing modern technology and a higher standard of auditing is priceless.
“Managing payments and processing money are business-critical functions, and it is impossible to eliminate emotionally driven decisions when it comes to handling and managing people’s money. Striking the right balance in this regard is key, which is why having the appropriate tools and robust auditing procedures in place is essential to fostering an environment of trust,” says Khalil Alami, CEO and founder of payment gateway company Telr.
“This means that there is no room for mistakes or errors that could lead to potential challenges and even lawsuits,” he says,
Whilst it is clear that standards in the UAE are undoubtedly being raised, improvement is not over yet. In fact, this could be only the beginning. “The UAE economy is developing at a rapid pace. In the near future, it is likely that a business’s accounting system will connect to a government system to verify the transactional data and accuracy of taxes. Managing this obligation will require businesses to further raise their standards for compliance and reporting,” Juma from SimplySolved concludes. ■