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How to conduct auditing process in 2021

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A tax auditing process of a company assesses and analyses the responsibilities of business with regards to paying taxes and whether or not the firm fulfills the responsibility adequately or not. In UAE, the auditing process of companies is conducted by the FTA an entity that is compliant with the tax laws and necessities consistent with the VAT Laws and indirect tax Law that keeps a check on the timely payment of the tax by all the companies. This tax is ultimately submitted to the government that is employed to develop the economy and infrastructure of the corporate.

The FTA also will check if the business is eligible to pay alternative very important taxes like VAT, indirect tax, etc. in line with the varied rules and laws explicit by the government.

Tax auditing process methods in UAE

1. Company internal checks

The purpose is to realize relevant information on the entity’s accounting, policies, and control procedures. It helps to determine the expected degree of trust to be placed on internal controls. It is the trial to assessing the nature, timing, and extent of the audit procedures attending to be performed. except that one among basic significance is to coordinate the task to be performed.

Since the tax auditors examine all the tax-related transactions, the companies have to be compelled to make sure that there's no inconsistency in any records. With the assistance of knowledgeable tax consultants, the companies will review their systems to make sure that the transactions are being recorded properly. the companies have to be compelled to make sure that their accounting package to go with the VAT accounting needs.

The activity of internal auditing is completed by consultants once doing elaborate analysis concerning the culture of the business, and processes. It primarily checks for the adequacy of control to affect risks, the effectiveness of the executive method, and structure goals and objectives.

2. Overall Tax and VAT considerations

The businesses have to be compelled to target the calculations of each output and input tax to make sure that they're compliant with the UAE VAT laws as some of the products and services come under zero tax compliance.

The Federal Tax Authority (FTA) will demand the corporation that is being audited to bring the right documents needed for verification. This methodology would take an extended time. Also, receiving the specified information from the corporate would wish varied permits from the management which might take abundant time

3. Documentation for auditing process

A record of all this inventory of the corporate, their receipts, and also the tax invoices.
All tax invoices and reduction notes or any different documents for each of them issued or received by the corporate being audited.
Tax invoices and documents associated with receiving product & services
Records of products and services that were disposed of for matters unrelated to business and records showing tax paid to an equivalent
Records of products and Services purchased and that the Input Tax wasn't subtracted.
Records of exported products and Services.
Records of changes or corrections created to accounts or Tax Invoices.
Details of products foreign together with Customs declarations and provider Invoices
The company’s books of accounts (Trail balance, Ledgers, record and Profit and Loss Account)