Value Addition for Business with Auditing
Traditionally the auditors’ role orbited around the compliance and regulatory frameworks. In recent times, businesses are keener on asking for value addition with each cost driver. Internal Auditing is not one of the most expensive cost drivers, yet many businesses in Dubai explore questions on the value addition of auditing.
From auditors’ perspective too, it has become empirical to offer explanations explicitly on value-added services they offer to businesses. Internal auditing in particular provides an unmatched valuable addition to any business. Auditing firms in Dubai need is to elaborate and communicate the values to the stakeholders.
In accounting terms, We Define Value Addition as generating profits above the cost of producing a product or service. Each business activity can be examined against the value-added definition. Similarly, the business stakeholders have been stressing more value-added activities from the auditing teams.
Let us take a glance at how and where our auditors in Dubai can offer value-added services to your businesses.
Connecting the Stakeholders’ Conflicting Objectives:
One of the most important and pivotal role, that auditing firms in Dubai can performs is connecting the stakeholders’ objective. Stakeholders of a business have often conflicting and demanding objectives. Shareholders primarily concern about the financial well-being of the business with stable earnings. Business Managers look for securing remunerations with higher performance indicators. Our Internal Auditing services in Dubai can provide valuable leadership in bringing these objectives collectively.
All auditors in Dubai have independent access to business objectives as defined by the relevant stakeholder. Similarly, each stakeholder would expect different value addition from the auditors. However, if auditors in Dubai perform the auditing tasks independently and objectively, they’ll be in a better position to satisfy all the stakeholders.
Defining the Complex Stakeholders’ Objectives:
An important task that auditors in Dubai can perform is to formally define conflicting stakeholders’ objectives. In terms of auditing, the auditing team must clearly prioritize and define the auditing scope. Clearly defined auditing scope helps all business stakeholders in understanding the conflicting nature of the objectives.
After setting a clear strategic direction, auditing can elaborate on value addition activities in broader categories. Some of the important business segments where auditing brings value-added services are discussed below.
Compliance and Governance:
Our Internal auditors in Dubai can provide unmatchable value addition when it comes to compliance with regulatory and compliance services. The cost of business non-compliance with regulators often results in business failure. Auditors strengthen the governance model by identifying and defining the internal controls, compliance procedures, and ethical business conduct.
It is pertinent for any business in Dubai to identify any conflict of interest among stakeholders of the business. In monetary terms, the cost-benefit analysis of compliance and avoiding tax and regulatory penalties outweigh the auditing expenses.
Value Addition with Risk Management:
There are numerous types of business risks. Identifying each potential threat and business risk itself requires expertise and knowledge. Our auditors in Dubai provide comprehensive information and analyses on business risk identification and management.
Business risks do not limit to financial or economic risks only. Categorically, each internal and external business risk poses a business failure threat. Internal auditors’ evaluation of financial risk management such as currency rate, interest rates, and cost of capital, alone provides invaluable benefits.
For example, what will be the reputation risk of a Tax Consultancy business being caught for tax avoidance? Or Fraud risk of a cash-generating retailer without appropriate security measures?
Far more businesses in Dubai fail due to a lack of risk management than the lack of financial resources. A business with intangible assets such as trademark software would be more vulnerable to malware risks than arranging bank finances.
Value Addition with Operational Efficiency Audits:
All business managers define critical success factors (CSFs) for the business. These CSFs are then measured as Key Performance Indicators (KPIs). As we discussed above, the conflicting nature of the business objectives does not always make the auditing work simple. Our auditors in Dubai provide in-depth analyses and value addition to the shareholders on the operational efficiency of the business.
Operational efficiency is simply the best utilization of business resources provided economically and effectively. Auditors are the ones to make sure the 3 Es of the business are well placed. It is impossible for any business in Dubai or globally to achieve operational efficiency in full. During the auditing process, auditors do point out to these operational processes lacking the full capacity.
Saving Costs for Regulators and External Auditors:
This is another neglected aspect of value addition that comes with internal auditing. Internal auditors provide essential reporting on business compliance and regulatory performance. External auditors build on the work of internal auditors and verify the facts mentioned in the internal auditors’ reports. Regulators such as securities exchange commission or Tax authorities do also heavily rely on internal auditors’ work.
The Total Cost-Benefit with Auditing:
The costs associated with auditing in Dubai are increasing; hence stakeholders question the total monetary values. If the auditing firms in Dubai efficiently and independently perform the auditing duties with a well-defined scope, it will bring value addition to the business.
Like any other business activity, the auditing expense can also be evaluated on a cost-benefit basis. However, business managers and shareholders must carefully define the KPIs for auditing work.
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