When Should a Firm Conduct an Internal Audit

When to Carry Out Internal Audit

A business owner always wants to keep the business healthy. When you see any trouble in your business, you need to check everything. If you go to a doctor when you feel sick, the doctor checks your whole body to find the reason for the problem. Similarly, if your company faces challenges, you must find the fault by doing an internal audit. An internal audit helps to find errors in records or spot the department not working properly.

When to Do Internal Auditing?

You should do an internal audit when you see problems in the business or you want to keep everything running smoothly. Some firms do audits regularly, maybe after every quarter or half year. Other times, the firm audits after seeing specific issues.

Situations That Need Internal Audit

Here are some important times when a business must conduct an internal audit:

Before New Investments: If you want to invite people or companies to invest in your business, you must show your performance. An audit report prepared before taking investments shows the investors all details about your firm.
When Errors Get Detected: When you find mistakes in your books or records, you should do an internal audit. This helps to find where the error came from, so you can fix it fast.
Cash Flow Problems: Sometimes, the cash flow of a business may not run smoothly. If costs become more than expected, you may lose money. To stop this, you need an internal audit to find unwanted cash flow.
New Laws and Policies: If the government makes new laws, you should do an internal audit. This checks which part of your company needs changes to follow the new laws, such as tax rate updates in your accounting records.
Before Business Expansion: If you plan to grow your business, you must audit to see if you have enough money and people. An audit helps you know which departments need more resources.
When Competition Rises: If your market becomes very competitive, you should do an audit. It helps you find your strengths and make new plans to beat competitors.
Regular Checkups: Just like a health-conscious person goes for regular checkups, a careful business owner does internal audits every year to keep the business on track.

What Happens If You Don’t Do Internal Audit on Time?

Imagine you own a supermarket with many branches. You decide to boost sales by giving new discounts and offers. Customers buy more, and sales rise. You think you’re earning good profit. But later, you realize the profit is less because you didn’t check if the strategy worked well. If you had done an internal audit, you would have seen the effect of your new plans on cash flow. Not doing the audit caused confusion and loss. So, timely audits help you spot issues before they become big problems.

Mubarak Al Ketbi (MAK) Auditing’s Support for Internal Auditing

Mubarak Al Ketbi (MAK) Auditing gives you the best support for internal auditing in your company. Our team knows all about current laws, new government policies, and correct accounting principles. We always put clients first and never compromise on quality. Our professionals are trained and skilled in audit and accounting. We work together to create strategies that solve your business challenges. If you want experts who stay up to date with every rule and always put your needs first, trust us with your internal audit.

How Can Mubarak Al Ketbi (MAK) Auditing Help You?

Let us give you a hand, because two heads are better than one! Here’s what we offer:

We give you expert advice on internal audits.
We check your company’s books carefully.
We help you follow all UAE laws and new rules.
We train your team in audit and compliance.
We make reports simple and easy to understand.

For More Information

Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
Or contact/WhatsApp: +971 50 276 2132

FAQs on When Should a Firm Conduct an Internal Audit

When can I claim a VAT adjustment for bad debt?

You can claim the adjustment if you’ve issued a proper tax invoice, paid VAT to FTA, written off the receivable in your books, waited six months from the supply date, and notified the customer.

What evidence must I keep for a bad debt VAT claim?

You must keep: • Tax invoices • Proof of VAT payment • Accounting records showing the write-off • Copies of communication with the customer

How do I report the VAT adjustment in my return?

Use the adjustment column in Box 1 of your VAT return for each relevant emirate. Enter the VAT amount you want to reclaim.

What if the customer pays after I’ve claimed bad debt relief?

If the customer later pays, you must declare the VAT for that payment in your next VAT return.

How can Mubarak Al Ketbi (MAK) Auditing help with bad debt VAT adjustments?

We check your eligibility, review your records, prepare your VAT return, and make sure you follow every law to reclaim your VAT with no headaches.