The audit is one of the most critical financial processes that helps any organization identify and fix the mistakes in their routine financial activities. The mistakes can take place due to the carelessness of the bookkeepers, accountants, or due to fraudulent activities. The organizations have to show their progress and pay taxes to the authorities, and the mismatching numbers can make them face the external audit process.
The small and medium enterprises in developed countries like the United Arab Emirates cannot afford the external auditing process. It can hurt their reputation and as well as business relations in the market. So, they pay attention to the internal auditing process and try to uncover all the mistakes to ensure transparency and clear record.
This article will help you explore the ways of detecting errors while conducting the audit process.
Top 5 ways to catch errors during the audit process
The audit is the backbone of financial activity. It helps the organizations to manage their records efficiently and ensure transparency in all their financial dealings. It also helps them keep up their reputation. However, all of this is only possible when they catch all the apparent and hidden mistakes in accounts.
The following are some of the most important ways to catch errors during the audit process.
1. Check and Compare Data from All Books
The main purpose of the auditing process is to ensure there is no difference in data in various books. So, the very first way of catching errors during the audit process is to check and compare data from all the books.
It is the responsibility of the auditors to check every entry and data from every book quite carefully to grab the mistakes. The amateurs are often not able to handle the pressure being perfect. Therefore, most of the business organizations acquire the help of top audit firms in Dubai to carry out the process professionally and efficiently.
2. Check Balance of Account Books
The problem occurs in the accounting or audit process when the balance is less or greater than expected numbers. This is also the root point which can alert the authorities about mistakes, errors, or frauds. So, you need to give special attention to it.
All you need to do is to check the balance of all the account books carefully. You can also compare it with the various transaction to track the point of error. However, to do this, you must possess professional skills and expertise.
3. Compare Previous and Current Year Balance
An important way of detecting errors in financial activity during the audit process is to compare the balance of the previous and current year. This is the major component that sheds light on the profit or loss of the organization.
By comparing the loss or profitability of the organization, the auditors can easily track the mistakes in the books and data recording. They can also provide substantial support in fixing these mistakes, so the organizations do not face penalties in the external auditing process.
4. Review Primary Account Books
Most of the business organizations often maintain primary and secondary account books. The primary account books are only meant for the authorities so they can check each transaction and its detail. On the other hand, the secondary account books are for the use of employees.
An important way to catch the errors in the accounting process during auditing is to review the primary account books. These include all the details so that they can provide sufficient detail about all the records and their track.
5. Analyze Fraudulent Activities
Lastly, an important way to detect errors during the audit process is to analyze the fraudulent activities. The big and even small organizations have a lot of enemies that try to manipulate their numbers. There are always chances that some employees are working against organizations.
Such people conceal their acts quite efficiently, and the auditors have the responsibility of reading between the lines and uncover such actions and people associated with them. If you are also suspecting any fraudulent activity in your organization, you need to take help from experts. You can hire the service of top audit firms in Dubai and manage to expose the frauds, as well as protect your finances and resources.
Trust the experts to detect the errors!
Auditing is a complicated matter. It is quite difficult to catch the errors if they are committed by mistake. On the other hand, it is even more difficult to catch these mistakes if they are made efficiently.
If you are suspecting your audit or general business process, it is time to consult the experts. You can seek help from the professionals and let them check and analyze all your records, data, and books to root out the confusion of errors or mistakes. Make your financial process transparent to earn more profit.