UAE’s Digital Transformation and Its Impact on Accounting and Finance

accounting and finance in the UAE

Over the past few years, the United Arab Emirates (UAE) has undergone a digital transformation that has had a significant impact on various sectors, including accounting and finance. The rapid adoption of new technologies has transformed the way financial transactions are conducted and managed, leading to increased efficiency, accuracy, and transparency of accounting firms in Dubai.

Therefore, today we’ll explore how digital transformation has impacted accounting and finance in the UAE.

Ways in Which Digital Transformation Impacted Accounting and Finance in the UAE

Let’s look at some of the ways digitalization has impacted the accounting & finance sector.

Automation of Financial Processes

One of the most significant impacts of digital transformation on accounting and finance is the automation of financial processes. With the help of software and other tools, financial transactions such as invoicing, payment processing, and reconciliation can be automated. Reducing the need for manual intervention. This has led to increased efficiency, faster processing times, and fewer errors.

Real-time Financial Reporting

Another important impact of digital transformation on accounting and finance is the availability of real-time financial reporting. With the help of digital tools, financial data can be collected, processed, and reported in real-time, allowing for better decision-making and more accurate forecasting. This has also enabled greater transparency and accountability in financial reporting, which is particularly important in the UAE’s business environment.

Improved Data Management

Digital transformation has also led to improvements in data management, particularly in the area of financial data. With the help of cloud-based storage and data analytics tools, financial data can be stored securely and analyzed more effectively. This has enabled businesses to gain insights into their financial performance, identify areas for improvement, and make informed decisions.

Increased Focus on Cybersecurity

As digital transformation has accelerated, cybersecurity has become a key concern for businesses in the UAE. With the increased use of digital tools and online transactions, the risk of cyber-attacks has also increased. This has led to a greater focus on cybersecurity measures, including the use of advanced encryption technologies, firewalls, and other security measures.

Increased Efficiency in Financial Operations

Digital transformation has enabled companies to streamline financial operations by reducing manual interventions and automating tasks. The use of digital tools has led to faster processing times, increased accuracy in data entry, and improved cash flow management. This has allowed companies to focus on core business operations, reduce costs, and improve profitability without having to worry about managing cash flow.

Enhanced Customer Experience

Digital transformation has also led to an improved customer experience in accounting and finance. With the availability of online banking, mobile applications, and other digital tools, customers can easily access their financial information and carry out transactions from anywhere at any time. This has made it easier for customers to manage their finances and has improved customer satisfaction and loyalty.

Integration with Other Business Processes

Digital transformation has enabled better integration between accounting and finance and other business processes. With the use of digital tools such as enterprise resource planning (ERP) systems, financial data can be seamlessly integrated with other business processes such as sales, supply chain management, and human resources. This has enabled most accounting and auditing companies in Dubai to gain a holistic view of their operations, improve decision-making, and optimize their business processes.

Opportunities for New Business Models

Digital transformation has also created opportunities for new business models in accounting and finance. For example, the use of blockchain technology has enabled the creation of new financial instruments and payment systems, such as cryptocurrencies and smart contracts. This has opened up new possibilities for financial transactions, increased transparency, and reduced costs. As a result, you can clearly see a rise in people trying to establish a new business setup in Dubai.

Challenges of Digital Transformation

Despite the numerous benefits of digital transformation in accounting and finance, there are also challenges associated with this process. These include the need for skilled professionals to manage digital tools, cybersecurity risks, and the potential for errors and data breaches. Companies need to have a comprehensive digital transformation strategy that addresses these challenges and ensures a smooth transition to a digital financial system.

The Way Forward!

The digital transformation of accounting and finance in the UAE has led to significant changes in the way we used to conduct and manage financial transactions. Automation of financial processes, real-time financial reporting, improved data management, increased focus on cybersecurity, increased efficiency in financial operations, enhanced customer experience, integration with other business processes, and opportunities for new business models are just a few examples of how digital transformation has transformed the financial sector in the UAE.

As companies continue to adopt digital tools and technologies, it is important to address the challenges associated with digital transformation and develop a comprehensive strategy that ensures a smooth transition to a digital financial system. So, if you also want to take your company to the next level hire a new-age accounting firm such as Profits plus Accountants.

How To Write An Audit Report – Contents of Internal Audit Report 

audit report

To write a high-impact audit report, you need lots of practice and time with proper guidance. It must be done per the standards and in alignment with the primary objectives to effectively explain the whole audit management process. To learn how to write a good audit report, you must look for some tips and best practices.

The first step should be penning down the detailed writing format for the report. Utilizing the standard internal audit report formats provided by ISO and other organizations is always better. Brainstorm how you will present your information and what stats you will be including because overwhelming them with unnecessary facts and figures will bore them sooner. Keep the 5 C’s of internal audit report writing in mind.

You can search for audit report templates (audit report samples) to get a quick idea.

How to Write an Internal Audit Report?

Do you know the what is the best internal audit report format? For an Internal audit summary report, a standard template is usually followed to meet the core objectives and requirements that the addressee has asked for. The better the report format, the clearer the picture of the business’s financial status.

The audit report structure must have the below-mentioned sections in the same sequence but you can make slight changes such as adding follow-up section:

  1. Title & Cover

How to prepare internal audit report? Let’s start with a simple yet engaging cover that must leave a good impression. After all, it will be the first point of contact with the reader. A quality internal audit report cover page speaks for the auditor’s efforts. Your cover should provide the readers with the title, auditor’s name, the end date for audit, and the company’s name being audited. Don’t forget to mention “Independent Auditor’s Report” in the title as per the internal audit report structure.

  1. Addressee details 

Addressee means the person who will be addressed in the report, a person responsible for hiring the auditors. It is usually the shareholders of the company. Their professional life, designation, duty roles, and essential employment incidents or experiences must be highlighted. It makes the internal audit report presentation more engaging.

  1. Introduction

One of the most important headings in an internal audit report writing format! This section must highlight the significant points to have a better understanding and give a quick overview to understand why the audit report is presented, such as:

  • The area/departments being audited
  • The processes being audited
  • The standards followed while conducting an audit (ISO 9001, ISO 14001, etc.)
  • Any historical financial information
  • Any facts that readers must keep in mind while reading the report

It must be concise but legible and authentic. No false facts or unverifiable statements must be made.

  1. Scope & Objectives

As the heading implies, the scope and purpose of the audit must be explained thoroughly. After reading this section, the addressee must understand:

  • What the audit is really about
  • The reasons why the audit risk areas are of importance to the company
  • Any limitations on the scope of work completed
  • The members responsible for conducting the audit
  • Why internal controls are tested 
  • How Company’s accounts are inquired about and verified

The auditor must provide credible proof that the audit examination of the company’s financial reports has been completed per the country-wide accepted standards. The evidence must be legitimate and free of material misstatements to make the shareholders or investors believe you.

internal audit report
  1. Opinions

One of the essential sections of any internal audit report is the auditors’ opinions concerning the business’s current financial status. It can be:

Unqualified or Clean OpinionThe highest grade opinion signifying that the report is generated and maintained in full compliance with the Generally Accepted Accounting Principles (GAAP) without any misstatements in financial records.

Qualified Opinion: It is issued only if the company fails to maintain financial records following GAAP. However, the report is free of misstatements or when unacceptable disclosures are provided for the financial accounts.

Adverse Opinion: Lowest-grade opinion, or the worst type of opinion given on the internal audit review report explaining that records are neither conformed to the GAAP nor free of misrepresentations. It directly puts the company in the lousy spotlight, being called a fraud.

Disclaimer of Opinion: If the company fails to prove its financial status or the auditor is unable to determine the status due to the lack of details.

  1. Results

Once the reason for auditing is explained, issues with their root causes are identified, flaws in financial records are highlighted, opinions are made, and the final verdict of the auditors’ team is provided. The result section summarizes the major findings supported by credible references and criticizes the performance of the management in resolving formerly acknowledged problems.

  1. Recommendations 

It is a point where you suggest new action plans to meet the deficiencies of the financial department considering the records. The skilled auditors can only play an advisory role, making recommendations or encouraging them to take certain actions to get rid of problems, but the final decision will be taken by the management

  1. Conclusions

It is considered the end of the internal quality audit report format where auditors are asked to add more comments (positive or negative) that cannot be mentioned in the result section. It goes beyond the individual issues of a company’s corporate governance. You can write an internal auditor’s opinion in this section as well. Most importantly, it gives you extra space to write positive notes to appreciate the management team.

The internal audit annual report is finalized after examining the company’s internal control systems deficiencies, which have some common sections, as mentioned above.

  1. Terminologies: 

Provide a short and easy-to-understand definition for each and every term you have used in the structure of internal audit report. It makes it easier for everyone to understand the information.

  1. Auditor’s signature and Place of the signature

At the end of the internal audit reporting structure, don’t forget to add the auditor’s signature on the report for credibility. The auditor must mention the city in which the report is signed.

  1. Date of the Internal control audit report: 

Always mention the date when the auditor signed the audit report.

Create an Executive Summary

Do you really think that senior executives read every word or go through every page? Well, they don’t have enough time to do so. That’s why draft internal audit report with an executive summary highlighting key points such as important dates, procedures, factual statements, and figures.

It must summarize all data and present it to the decision-makers to determine if they need any new action plan. It must not take more than 30 minutes to read. 

In literal meanings, “it is a compact debate of the conclusions of the auditing tasks completed in a complete audit report layout.”

Audit Services to Improve Operational Control

With the help of experienced, professional, and skilled accountants at Profits plus, you can handle an organization’s internal audit more efficiently. We have assurance and consultant services with risk advisory to help you reach your ultimate goal. Our team always selects the most beneficial standard policies for Dubai-based businesses while guiding them through auditing and supervising financial operations.

8 Different Types of Accounting Practices

How do you plan on expanding your business without knowing how many resources you are left with, how much revenue you can expect, and how much money has been spent on taxation? You simply can’t! 

Every business needs a stable accounting department responsible for keeping the owners updated about the current financial position along with anticipated percentages of profit or loss. 

8 Types of Accounting Practices 

To keep your finances straight and up-to-date with the company’s cash flow, you must be familiar with all eight types of accounting. 

  1. Public Accounting 

As the name suggests, public accounting is a practice where a businessman allows an independent accounting firm’s certified public accountants (CPAs) to keep their company’s accounts, financial records, bank statements, and related information in check and balance as a few of the financial documents are necessary to be publicized. UAE has plenty of well-known public accounting firms offering additional services, such as bookkeeping, financial consulting, and payroll services, apart from auditing and taxation. 

The firm will be held accountable for strategizing business plans, suggesting profitable mergers, and making acquisitions while keeping the internal accounting system streamlined. 

  1. Private Accounting 

It is an accounting practice where an accounting professional (expert) is recruited to bring the business’s accounting and other information in order. He is responsible for recording finances properly and keeping them updated. The accountant will be provided full authority to tackle all financial, tax-related, and managerial accounting issues within the organization. 

  1. Government Accounting 

A practice where government agencies responsibly deploy state auditors (or equally eligible individuals) for recording, creating, and anticipating budget (income and expenditures) in accordance with the Governmental Accounting Standards Board (GASB). Agencies will set reporting standards and track: 

  • How public money is being spent 
  • Amount of the remaining available funds 

 It is a valuable step in ensuring that financial, accounting, and related information is accurate.  

  1. Financial Accounting 

This accounting principle is a traditional practice and serves the purpose of keeping an updated record of each transaction, maintaining a balance sheet for trailing the financial situation, pinning down assets and liabilities, informing shareholders about the financial shifts, and providing the owners with the detailed summary of cash flow. A financial accountant expert (secretaries, stock intermediaries, chartered accountants, etc.) is obliged to follow internationally or locally recognized accounting standards to prepare financial statements and the statement of change in equity. 

Two main types of financial accounting are cash accounting (mainly practiced by SMEs) and accrual accounting (suitable for larger businesses). It is necessary to define the company’s existing financial status. 

  1. Cost Accounting 

It only collects and analyze information regarding the company’s expenditure on manufacturing products. Cost accounting helps you make sensible decisions about future inventory, production, manufacturing, and supply spending. It comprises fixed costs, variable costs or input costs, etc. and is aimed at finding the cost gap between the estimated and the actual cost of production. 

  1. Forensic Accounting 

Forensic accounting is inevitable for any business as it serves the function of a financial detective, responsible for: 

  • Scheduling timely evaluations to get a hold of financial fraud 
  • Finding lawful proof of malpractices 
  • Submitting evidence to the courts to prove the case of embezzlement 
  • Writing an accounting report in easy terms for the court to explain if the company is carrying out illegal procedures 
  • Analyzing data to determine the missing amount  
  • Suggesting practicable solutions to recover the lost amount 
  • Highlighting misstatements and verifying controls 

You can either keep it in-house or hire forensic accountants. 

  1. Management Accounting 

Like financial accounting, management accounting involves using statistical tools and approaches for recording data and analyzing financial transactions. By using these statistics, accountants manage to infer current or upcoming trends as well as forecast financial liabilities. It not only considers the company’s expenses but also non-financial aspects of the business to make profitable decisions.  

The three most common categories of management accounting include strategic, performance, and risk management. Depending on your business needs, you can implement one or all three at once for obtaining information. 

  1. Tax Accounting 

A type of accounting solely designed to check the company’s tax liabilities: registration, returns, deregistration, and payments.  

In UAE, tax accountants take care of VAT-related issues. They check if your company needs to pay tax, what amount, and when. With their proper help, you will be paying the respected amount of taxation without delays, saving you from administrative penalties. It ensures that you are following all-time changing tax laws. 

How Profit Plus Can Help in Accounting 

Outsourcing your accounting needs is beneficial for highlighting high-level risks of future events and preparing you to embrace unforeseen circumstances. Profit Plus has qualified British accountants for delivering high-class accounting practices and maintaining financial transactions properly for SMEs and large companies to survive in the long run. We will not only let you save big on money but also give you a golden chance to benefit yourself from professionalized and personalized VAT services.  

Contact us to consult about different types of accounting practices in the UAE and audit-related queries, as we will help you select the most suitable approach for your business. 

 

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