What Are The Checklists For An Internal Audit
In A Business Firm In UAE

Rajinder Nagiyal

August 18, 2023

Auditing

What Are The Checklists For An Internal Audit In A Business Firm In UAE

Audits are used to gather information and data about a particular business operation in order to compare it to the expected performance criteria.

Internal audits in particular are a tool for management to use to better understand the performance of the firm and its business procedures and controls.

To carry out an internal audit, a business firm needs to use a checklist.

An internal audit checklist is a tool or a document that serves as a reference for the internal auditors as they conduct the audit by outlining the standards that will be assessed throughout the procedure and keeping track of the company’s current performance.

This article will cover the internal audit checklists for business firms in the UAE.

Contents Of An Internal Audit Checklist

The specific content of a checklist differs from each firm based on some factors like the purpose of the audit, the company size amongst others. However here are some general contents that may be included in a checklist:

Governance and Management
Risk Management
Internal Control
Confirming the Firm’s Strategy
Financial Report
Legal Compliance
Human Resources
Informational Technology
Evaluating Performance
Fraud Prevention and Detection

Governance and Management

It entails accessing the responsibilities, relationships, and affiliations of various parties with stakes in the organization, including the board of directors, management, shareholders, staff members, and customers, among others. This also includes accessing the daily activities and decision-making within the organization and how the plans made by the board of directors are used to attain the objectives of the company.

Risk Management

This involves evaluating the risk management process and framework, identifying major risks faced by the organization and reviewing strategies, and control methods used to mitigate this risk.

Internal Control

This has to do with examining the design and effectiveness of internal controls, assessing whether the division of tasks is effective, and verifying the compliance of policies and procedures in the firm.

Confirming the Firm’s Strategy

The firm’s risks and opportunities are listed in this section. It looks at the objectives established by the organization and makes sure that the actions taken align with those objectives. Additionally, it lists the objectives of the employees and assesses if they align with those of the company.

Financial Report

In this segment, the financial statements are accessed for accuracy and compliance with the accounting standards. It also involves confirming if the accounting methods and estimates are appropriate, then checking for any potential misstatement or irregularities.

Legal Compliance

This describes the observance of laws, rules, industry standards, internal policies, and moral principles that are relevant to the activities of the business. It entails accessing the procedures and controls made, then ensuring that the organization’s operations and procedures adhere to these standards.

Human Resources

Entails reviewing the policies and procedures used by the HR, verifying if the policies complies with labor laws and regulations, then assessing the effectiveness of talent management and development processes.

Informational Technology

This involves evaluating IT governance and security controls. Assessing the integrity and security of data and information systems. Then checking for IT compliance with relevant regulations and policies.

Evaluating Performance

This aspect makes sure the company reaches its performance goals efficiently and on time. It continuously keeps an eye on the performance and corrects any discrepancies with appropriate action.

Fraud Prevention And Detection

This involves assessing the organization’s anti-fraud policies and procedures. Then checking for potential fraud risks and any indications of fraudulent activities.

As mentioned earlier, these are some general contents that can be found in a firm’s internal audit checklist. Before we end this article, let’s take a look at the benefits of an internal audit checklist.

Benefits Of Internal Audit Checklist

Consistency: A checklist encourages audit process uniformity and consistency. It serves as a point of reference for the auditors and the organization as a whole, and it may also suggest the intervals at which an audit should be performed.
Documentation: The use of an audit checklist as documentation is highly recommended. It makes it simpler to communicate outcomes to stakeholders by assisting auditors in systematizing the recording of their observations, findings, and suggestions.
Fosters A Comprehensive Assessment: It assists in determining whether all departments have been audited. It assists auditors in covering all pertinent details and lowers the chance of forgetting crucial elements.
Time Efficiency: An ordered checklist makes it easier for auditors to work because it lays out clearly what has to be assessed. This may result in time and resource savings during the audit process.
Benchmarking: The check-list may contain benchmarking criteria, enabling firms to assess their performance in comparison to best practices in the industry and pinpoint areas in need of development.
Continuous Improvement: Organizations can see recurring problems and put corrective measures in place to strengthen procedures and resolve deficiencies by routinely employing an audit checklist.

Conclusion

Overall, performing routine internal audits is essential to establishing a successful company in the UAE. Companies can gain stakeholders’ trust and credibility by recognizing possible risks, enhancing efficiency, and guaranteeing regulatory compliance. This will help them succeed over the long run.

As an audit firm in Dubai, we are dedicated to assisting businesses in achieving their objectives and succeeding in the challenging business environment of the United Arab Emirates, whether it be by completing a thorough internal audit or by offering continuous support for compliance and risk management. Get in touch with us today