What is an Audit and Financial statements?

1. What is an Audit and Financial statements? Audit is the process of examining or inspecting the various books of accounts by an auditor followed by physical checking of inventory to confirm that each of the departments are following documented system of recording each and every transactions occurring in a business. It's done to determine the accuracy of monetary statements provided by the organisation. In order words, it is the examining of a company’s financial statements by an external auditor to make sure the company is following the rules and regulations by the government and to confirm they are spying the tax on time and making the correct tax payment. Importance of Audit The primary purpose of the audit is to determine the accuracy of the financial statements provided by the company and whether if it’s done in accordance with the accounting standards. Financial statements are records that will convey the financial activities and the financial performance of a business and it is these financial statements that are audited by Audit Firms in Dubai, accountants etc fo check the accuracy. There are 3 types of financial statements : ● Income statement It is the main statement of the 3 financial statements. It gives the report on the company’s performance financially over a specific period of time. It can provide the valuable insights of a company’s management, operation etc. A Net income is calculated as the sum of total revenue plus gains and deduct the expenses and loss. Gain, Revenue, Expenses and loss are the main 4 key factors that the income statement focus on. It’s not about the cash or non-cash sales or credit sales, it gives the details of sales and then calculate the net income and how much they earn per share. As such, it gives an idea about how much revenue of the company is transformed into earning, profit or loss). Balance sheet The financial statement that gives the report on the company’s assets, liabilities etc. at a specific time is termed as balance sheet. It gives a clear report on how much a company earns and owes also the investment by shareholders. Along with the other financial statements, the balance sheet is used for analyzing the financial status. A balance sheet can be simply described as a snapshot that describes the company’s financial status at a particular time. With a single report, you cannot get the whole idea. You will have to compare it with the previous reports. You can even compare the report with other companies in the same industry. Auditing Companies in Dubai provide these services for their clients along with the accounting. ● ● Cash flow statement

2. The financial statement that provides detailed data on the cash flows in a company is termed as cash flow statement. It includes all the cash flows that pay for business activities and the also the investments. Every transaction is important and it has a contribution to a business’s success. These cash flow statements are very important during the taxation and Tax Consultants Dubai can do their work easily if everything is in order.