Why You Should Review Your Accounting Policies and Systems

After implementing VAT in the UAE in 2018, it has become almost mandatory for all business entities to maintain accurate, detailed and complete records of all accounts and transactions. Thus, organizations should monitor and account for all financial transactions and generate VAT reports per the UAE VAT regulations.

What is Accounting Policies and Systems?

Accounting policies are the precise processes and regulations that a corporation employs to compile financial statements. These include any methods, metric systems, and disclosure-presentation procedures. 

Although accounting policies and accounting principles seem the same, there is a vast difference between the two. The accounting principles are the rules, while the accounting policies are guidelines for a corporation to comply with the laws.

Need For Review of Accounting Policies and Systems

An organization must ensure that the group accounting policy manual is up to date with current accounting regulations. A corporation must persevere in presenting well-drafted policies as improper or unclear guidelines can cause human omissions, leading to incorrect and inconsistent execution of accounting requirements.

The company must also ensure that its accounting policy decisions accurately reflect the group’s results to investors and analysts. Non-compliance with VAT laws or erroneous VAT computations invite penalties and fines. The need for a review of accounting policies and systems is crucial today because:

• Increased transaction activity and capital-raising events (IPOs) are reshaping companies and necessitating the creation of new policies and the refreshment of old policies. 
• ERP changes necessitate the development of new and additional procedures and guidelines to standardize future changes.
• The volume and size of strategic acquisitions, including megadeals and cross-sector deals, rise. There have been numerous recent examples of major vertical acquisitions in which a large or established corporation in one industry targets a company in another entirely. 

Use the Expertise of Certified Professionals 

Certified and experienced accounting review professionals must conduct account reviews and transactions to ensure taxation and financial reporting accuracy and reliability. Here is how our accounting and tax professionals can help you :

• Review a business entity’s financial statements and policies to ensure they conform to accounting principles 
• Assistance in confirming the technical accuracy of their accounting manual
• Update policies to reflect accounting developments
• Benchmark policies against industry norms
• Reformat the manual for ease of reference when necessary

Our expertprofessionals use a proactive approach to assist the establishment by strengthening internal controls. They achieve it by developing an internal control structure relying on a regulated environment, risk assessment, monitoring and reviewing, and information and communication.

Accounting Systems and Internal Controls – Review

During the examination of accounting systems and internal controls, we employ processes that allow our clients to determine:

• Their financial rules are effective
• Their financial statements are reliable and under applicable laws
• Their financial statements follow the company’s internal policies and processes
• The company’s assets are appropriately safeguarded from fraud

The accounting policy supports the development of internal controls that aid in achieving the goals mentioned earlier while also assuring more effective financial statement preparation.

How can FlyingColour Help you?

FlyingcolourAccounting and Tax consultants provides clear and straightforward answers to many accounting and taxation issues. Our Accounting Review experts believe in delivering world-class services based on your demands and specifications.

Please book your free consultationwith our experts to know more about the comprehensive services.