Preparing for an External Audit in the UAE

Four steps to readiness

Reading the request list before fieldwork

An auditor's request list usually arrives as a spreadsheet with a reference number, a description and a due date for each item. Copy it into your own tracker and add three columns: owner, status and the file location of the evidence. Review it in a short weekly meeting until every line is answered.

Answer each request with the document and a one-line note on what it shows. A bank statement with a note saying it ties to the cash balance in the trial balance saves a follow-up query. Where something does not exist, say so early and explain what exists instead.

Working papers that match the financial statements

Auditors work from the financial statement lines, so organise your schedules the same way. Each line, such as trade receivables, inventory, borrowings or accruals, should have a supporting schedule. The schedule should add up to the trial balance figure and list the items inside it.

A lead schedule for each area helps. It shows last year, this year and the movement, with a reference to the detail behind it. Movements you cannot explain from the schedule are the ones most likely to generate questions.

Number the schedules and cross reference them to the trial balance. A reviewer can then move from a statement line to the detail without asking where it is.

Representations, subsequent events and management comments

Near the end of fieldwork the auditor will usually ask management to sign a representation letter. They will also ask management to confirm whether anything significant has happened since the year-end. Collect board minutes, new loan agreements, large post year-end invoices and credit notes, and any legal correspondence so you can answer accurately.

When the auditor raises points about your controls, record the response, the person responsible and the date the fix will be made. Closing those points before next year makes the following audit smoother.

Late discovery of such events is awkward, so ask finance staff to flag them to you as they happen.

Ask the auditor for an expected timeline covering the interim visit, the main fieldwork, the draft report and sign-off. Share holiday plans, staff availability and system access early, so that delays on your side do not stretch the engagement.

What to put in the file

• Request list tracker with owners and dates
• Trial balance mapped to financial statement lines
• Bank statements and confirmations
• Customer and supplier balance listings
• Journal entries with narrations
• Minutes, contracts and loan agreements

Risks to watch in UAE company books

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