Importance of Accounting and Auditing in your Organization

In today’s landscape, accounts and auditing are two processes that are vital for every business. On the one hand, accounting helps you to record daily data and reports of the organization. While on the other hand, auditing looks at the accuracy of those reports and data. Accounting deals with different processes financial transactions of a business. It is either performed by accountants or FTA approved accounting software. While Auditing is a process that involves ensuring that the data provided is true and has zero discrepancies. It is performed by auditors.

There are many Auditing firms in Dubai that provide Auditing services UAE and other countries. One such firm is Peniel Technology. We not only provide auditing services but also we are the official partner of some of the best and FTA approved accounting software. Besides that, we are also leading VAT/TAX Consultant UAE and other countries. However, at first, take a look at the basics of accounting and auditing that are significant for your business.

Meaning of Accounting:

Accounting is the process of analyzing, recording, and organizing the financial transactions of a business. Using the financial transactions as the foundation, these analysis reports are generated for the organization. Accounting is a step ahead of bookkeeping because it not only organizes all the business financial data into proper groups as per standards. Nowadays, accounting is done with the help of accounting software. It enables automation and complex calculations to take place. Moreover, depending on your business, it can be done on an accrual or cash basis.

There are many types of accounting in the business such as Managerial Accounting, Cost Accounting, Tax Accounting, Financial Accounting, Credit Accounting, and more. Financial accounting includes the generation of financial statements. Since it reveals the health of your company, it is used by lenders, auditors, and investors. Managerial accounting deals with the generation of process-changing statements. Cost accounting involves evaluating and studying costs in-depth. Credit accounting is ensuring that sufficient cash remains in the business for the smooth running of the organization. Lastly, Tax accounting ensures that tax returns are properly filed.

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Meaning of Auditing:

Auditing is the thorough verification process of the financial statements of the organization. It involves examination and analysis of a system, product, and process of a business. To ensure compliance by a business, auditing of an organization takes place. It can be either for the purpose of follow-up or to check performance & compliance. There are three different types of auditing and those are system audit, product audit, and process audit. A system audit to evaluate the effectiveness and efficiency of the organization. A product audit analyses the product or service of the business to make sure it is working as per the requirements. Lastly, a process audit examines the processes of the organization and ensures they are working according to standards.

An audit can be either first, second, or third party. The audit is performed in the business and the evaluation occurs in the first-party audit. An external audit takes place in a second-party audit. And, a stranger audit organization performs the auditing process in a third-party audit. The entire auditing process depends on the type of audit, the nature of the audit, and the individual or people performing the audit.

Need of Accounting in Business:

• Accounting is key for making informed decisions about your business. You are at risk of wrong record-keeping if you haven’t invested in accounting software which can crumble your business in no time. 
• You will know about your expenses, losses, revenue, and profits with accounting. It enables you to reach your organizational goals in a systematic manner. Accounting is essential because it will tell you exactly where the money is going. 
• It ensures you are paying taxes on time and allows you to pay your employees on time as well.
• Accounting helps you in getting a loan when you need it and helps you attract investors as well. 
•  It allows you to keep track of your debt-related information by ensuring you are not in trouble because of your debts. 
• Accounting enables you to get access to insightful reports. As a result, it will give you detailed overviews of any part of your business.

Need of Auditing in Business:

• Auditing is necessary for the organization because it gives you an unbiased overview of your business. To ensure you know where things aren’t as per standards and what you are lacking, auditing is a fundamental step.
• Since auditing weeds out errors that may exist in your processes, it enables you to make decisions for the betterment of the organization. 
• With auditing, it becomes possible to focus on the solutions that ensure your business is working the way it should.
• Since auditing ensures transparency, you will know the problems and will be able to solve them.
• External auditing enables your business to look more reliable and trustworthy to outsiders. And, it ensures a positive public image.
• It helps you cement your relationships with suppliers and clients because they usually require auditing to proceed further.

Peniel Technology for Accounting & Auditing:

Peniel Technology is a one-stop solution for all your accounting software and auditing needs. We provide an automated accounting tool to your organization that lets you record and analyze your financial transactions. It comes with a broad range of features that you can customize as per the needs and requirements of your business. All these are FTA approved accounting software that enables you to make the best decisions for your organization and create professional e-invoices in minutes.

On the other hand, Peniel Technology is one of the leading auditing firms in Dubai and worldwide as well. From providing auditing services UAE to being the best VAT/TAX consultant UAE, we have a team of professionals providing time-bound results. We will enable you to run your business effortlessly by providing the best and most authentic consultants and services in Dubai, UAE, and across the globe. If you want to know more about the accounting software and auditing services we provide, then contact us back and schedule a meeting!!