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Audit & Assurance

Audit & Assurance

DREAM LIGHT Group, the auditing division of DREAM LIGHT Group offers the complete range of Audit and assurance services to meet the business needs of client in this dynamic global environment. Through the years of immense experience and knowledge in Accounting and Auditing sectors, we have tailor made services with the most credible approach.

This segment is engaged in providing the following services

  • Financial statement audit
  • Internal audit
  • Management audit
  • Operational audit
  • Due diligence audit
  • Investigation Audit
  • Supply Chain Audit

Financial Statement Audit

What is a financial Statement Audit?

Audit simply refers to examine and give comments on the items verified. Financial audit implies examination of the books of accounts and other relevant records. This will provide the auditor necessary information to give his opinion whether the accounts are properly maintained and complied with necessary statutory, accounting or financial reporting and auditing standards.

A financial statement audit is an independent appraisal of the financial statements prepared by the organization. The basic objective of a financial statement audit is to provide an independent or third-party assurance that the management has, in its financial statements, presented a “true and fair” view of a company’s financial performance.

The result of this examination is a report by the auditor, attesting to the fairness of presentation of the financial statements and related disclosures. The auditor’s report must accompany the financial statements when they are issued to the intended recipients or stake holders.

What is the importance of Audit of books of accounts and records?

Importance of Audit is increasing with the passage of time – as there is always more and more things to review and whistle, when things are deviating. The businesses become more complex and the management of the companies are playing different methods to beat the market. When the countries or societies are progressing at greater speed with technological developments, new ways of doing things are arising. In order to cover such activities accounting and auditing has to cope up with the market movements and ensure that stake holders’ interests are well protected. There have been an ongoing series of disclosures of fraudulent reporting by major companies, this will also point out the need for an effective audit.

What is the purpose of conducting a financial statement audit?

Having an expert opinion independently from the management of the company is highly essential to ensure that what is reflected through balance sheet / statement of financial position or Profit or Loss Account is reliable or not. The purpose of a financial statement audit is to add credibility to the reported financial position and performance of a business. Tax authority need the confirmation of sales and income, Lenders typically require an audit of the financial statements of any entity to which they lend funds. Suppliers may also require audited financial statements before they will be willing to extend trade credit.

What are the audit procedures?

A well planned verification is necessary to cover all financial items with audit materiality. Audit involves collection and evaluation of evidence in support of conclusions arrived. The procedures which will assist the auditor in this direction are.

  • • Planning and risk assessment.Involves gaining an understanding of the business and the business environment in which it operates, and using this information to assess whether there may be risks that could impact the financial statements.

  • • Internal controls testing.Involves the assessment of the effectiveness of an entity’s suite of controls, concentrating on such areas as proper authorization, the safeguarding of assets, and the segregation of duties.

  • • Substantive procedures.Involves a broad array of procedures, of which a small sampling.

What are the different level of assurances from auditors point of view?

Depending upon the nature of engagement and the purpose it demands the level of assurance provided by the auditor varies from Audit to Compilation.

An audit provides high level of assurance. But a review engagement gives a reasonably lesser degree of assurance than audit. As in a review, the auditor does not carry out all those procedures that are carried out in an audit. Publicly held entities must have their quarterly financial statements reviewed, in addition to the annual audit.

Sometimes the requirement is only to report on individual items of financial data or on a set of financial statements to report on the factual findings, say to certify only the turnover of the company. The level of assurance in such agreed upon procedures is again lower than a review engagement.

In the case of a compilation engagement, the auditor is called upon to prepare the financial statements – where his expertise in collecting, classifying and summarizing the financial information only demanded and not designed to give any assurance on the financial statements.

What is the Audit Period?

Normally the external audit is conducted annually. In the case of new entities, the audit period can be extended to 18 months from the date of incorporation. At the same time, it may not be less than 6 months as well. Subsequent audit period will be for a period of 12 months and this period can be extended up to 15 months in case of certain Free Zones. In case where management of the companies need special purpose audits it can be carried out for a different period or even number of years.

Qualification and Appointment of an Auditor

The manner of appointment, the qualifications and the format of reporting by an external auditor is defined by statute which varies according to jurisdiction of different countries.

The auditors must be a member of one of the recognized professional accountancy bodies. The auditors normally address their reports to the shareholders of a corporation or to the owners of the business entity. The auditors are subjected to strict rules to uphold their integrity and to establish independence.

What is the importance of Audit in the UAE?

Audits have become almost mandatory in the UAE both in the free zones and in the main land. In the free zones, authorities insist filing of audit reports as mandatory requirement for renewing the license of the company. In the main land, as per UAE commercial company law annual audit is required to be done. Moreover wherever bank has financed materially, they will insist filing of audit report for continuing the finance facilities. Sometimes, suppliers or customers or other stake holders ask financial audit report, time to time. With the implementation of UAE VAT, additional responsibility will be there most probably to the management of the company to confirm the turnover through the audit report.

Why choose DREAM LIGHT Group for Audit in the UAE?

We DREAM LIGHT Group is present in the market for the last 15 years with highest professional quality, real time service and maintaining ethical values. Our qualified chartered accountants at various levels of execution of assignments ensure that requirements as per International Financial Reporting Standards (IFRSs), auditing standards and relevant legal provisions are properly complied with.

Internal Audit


Internal audit is an independent, objective assurance and consulting activity designed to add value and improve organization’s operations. Purpose and Scope of Internal Audit is that, it helps an organization to accomplish its objective by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance process.

Internal audit activity can play an important role and support the BOD and Management, in fulfilling the essential component of their governance mechanisms. The internal auditor furnishes analysis, evaluations, recommendations, counsel and information concerning revenues, and improving profits.

Purpose And Scope Of Internal Audit

Internal audit functions an independent evaluation function to examine and evaluate the activity of the organization. Purpose of internal audit is to assist members of the organization, especially management and the Board of Directors. The information furnished to each may differ in format and detail, depending upon their requirements, request and the nature of the assignments.

In achieving its objectives, the scope of internal audit activity should be appropriately broad to meet the need of management. It should include,

Determining whether the existing system of controls is in harmony with the structure of the organization.

Reviewing each control and analysis in terms of costs and benefits.

Reviewing the consistency and honesty of financial and operating information and the means used to identify measures, classify and report such information.

Reviewing the means of maintenance of assets and as appropriate, verify the existence of such assets. The objective of the management is to ensure that assets are reasonably protected against loss and that they are properly managed and accounted for. The maintenance of assets should not be restricted to mere pilferage but physical threats like fire, water, electricity, etc.

Management audit

A measurement and report of the effectiveness and results of certain business procedures. Management audits are usually performed internally, and check to see that procedures have their intended effect. Unlike a compliance audit, which simply ensures that procedures are being followed, management audits challenge the assumptions and goals of procedures, with an eye toward improving efficiency. A management audit may recommend changes in procedures resulting from observed inefficiencies in existing procedures. A detailed audit that concentrates on analysis and evaluation of management procedures and the overall performance of an organization. A management audit is undertaken to discover weaknesses and to institute improvements within the organization.


The management audit is a more recent concept. It focuses on results, evaluating the effectiveness and suitability of controls by challenging underlying rules, procedures and methods. Management audits, which are generally performed internally, are compliance audits plus cause-and-effect analysis. When performed correctly, they are potentially the most useful of the evaluation methods, because they result in change.


A management audit can be defined as an audit which analyzes the effectiveness of the management team of a company. The purpose of this is seven-fold: understand current practices, relate these to company financials, suggest new procedures which will improve the efficiency of managers, present a financial gain related to these new procedures, and create benchmarks and projections for the future. A management audit letter is the final piece of material shared with the client; it is a report of the findings.


The management audit process can be explained by the auditing of both the management method as a whole as well as key management staff. This is important to establish the effectiveness of both the leaders of the department as well as how it performs as a team. In this way, it can fill the purpose of a staff audit or performance audit, depending on the scope of the company.


Audit management oversees the internal/external audit programs, and hires and trains the appropriate audit personnel. The staff should have the necessary skills and expertise to identify inherent risks of the business and assess the overall effectiveness of controls in place relating to the company’s internal controls.


Internal audit is a function setup within the organization to reduce the risk of fraud in the organization and runs according to the management commands. This is the main difference between internal and external audit where external auditors are independent of management and hence external auditors give an opinion on the financial statements as presented by the management of the organization.


Analysis and assessment of competencies and capabilities of a company’s management in order to evaluate their effectiveness, especially with regard to the strategic objectives and policies of the business. The objective of a management audit is not to appraise individual executive performance, but to evaluate the management team in relation to their competition. Management audits are often necessitated by major changes in a business. Some of the events that call for a management audit are top management changes, mergers and acquisitions, and succession planning.

Operational audit

An operational audit is a formal evaluation of the internal systems and procedures a company uses to produce goods or services. Made of at least four major steps, it tests how efficient and effective production operations are, which ultimately boosts revenue and profits. It also can reveal ethical issues in the business. External or internal accountants may perform the review, based on the needs of the business. This process has some disadvantages, such as potentially high cost, but it also offers advantages, such as new perspectives and increased risk awareness.

Purpose

In general, the tools and processes a business uses to get a product or service to the public have to work as intended and be efficient. When they aren’t, the company usually can’t make as much money and can’t be as competitive. Businesses, therefore, use these types of audits to streamline what they’re doing, with the ultimate goals being to decrease waste and boost revenue and profits.

An operational audit is an inspection and analysis of how well the business is performing. Management adherence to budgets and company policy is evaluated. After the audit is made, suggestions may be given to help make the company more efficient in meeting its goals.

Similar to other reviews, looking at how the company is functioning overall can uncover ethical problems, such as employees using company property for personal reasons. The results of the audit let managers identify who is involved in dishonest practices, which often leads to greater accountability on the job. Companies’ disciplinary and general policies often connect closely to the review for this reason.

A business or organization uses an operational audit to closely examine its internal operations. This contrasts with a financial audit, which examines the company’s financial books for completeness and accuracy. The goal of an operational audit is to improve efficiency and allow the company to make the best use of its material and human resources.

What Are the Benefits of an Operational Audit?

The opportunity to examine your business in-depth and make important strategic decisions comes with an operational audit. Unlike financial audits, operational studies focus on the process of running your business. They are frequently conducted by outside agencies, though larger businesses sometimes maintain internal auditing departments. It is recommended that an impartial auditor conduct the evaluation because it adds the perspective of another viewpoint, especially if the auditor is experienced with businesses similar to yours. A well-performed audit can be beneficial, as it is personalized to identify specific areas of weakness and potential growth opportunities unique to your business.

In addition to making the business more efficient and profitable in the long run, an operational audit almost always provides a company with some new, fresh perspectives. It makes executives aware of problems that might not have been found otherwise and lets them evaluate risks for the future. Managers also can use results to motivate employees, as the company always has something to work toward at the end of the process.

Due diligence audit

Due diligence is an investigation or examination of a business or person prior to signing a contract, or an act with a certain standard of care.


The investigation or examination could be carried out for a potential objective for merger, acquisition, privatization, or similar corporate finance transaction normally by a buyer.


It can be a legal obligation, but the term will more commonly apply to voluntary investigations. A common example of due diligence in various industries is the process through which a potential acquirer evaluates a company which he has targeted or its assets for an acquisition.


The theory behind due diligence holds that performing this type of investigation contributes significantly to informed decision making by enhancing the amount and quality of information available to decision makers and by ensuring that this information is systematically used to deliberate in a reflexive manner on the decision at hand and all its costs, benefits, and risks.


Due diligence takes different forms depending on its purpose:

This can include self-due diligence or “reverse due diligence”, i.e. an assessment of a company, usually by a third party on behalf of the company, prior to taking the company to market.


A reasonable investigation focusing on material future matters.


An examination being achieved by asking certain key questions, including, how do we buy, how do we structure an acquisition, and how much do we pay?


An investigation of current practices of process and policies.

The due diligence process (framework) can be divided into nine distinct areas.

Compatibility audit – which deals with the strategic components of the transaction and which links/consolidates other audit areas together via a formal valuation in particular to test whether shareholder value will be added.

Financial audit – where due diligence is required to validate financial statements. The goal of the process is to ensure that all stakeholders associated with a financial endeavour have the information they need to assess risk accurately.

Macro-environment audit- major external and uncontrollable factors that influence an organization’s decision making, and affect its performance and strategies.

Legal/environmental audit – evaluations intended to identify environmental compliance and management system implementation gaps, along with related corrective actions

Marketing audit – is a fundamental part of the marketing planning process. It is conducted at various points during the implementation of the plan. The marketing audit considers both internal and external influences on marketing planning, as well as a review of the plan itself.

Production audit – Verify the production records such as production slips / memos to ensure that the records are properly maintained. Also verify the log books of machinery to check the details of production.

Management audit. – is a systematic examination of decisions and actions of the management to analyze the performance. Management audit involves the review of managerial aspects like organizational objective, policies, procedures, structure, control and system in order to check the efficiency or performance of the management over the activities of the Company

Information systems audit – is an examination of the management controls within an Information technology (IT) infrastructure. The evaluation of obtained evidence determines if the information systems are safeguarding assets, maintaining data integrity, and operating effectively to achieve the organization’s goals or objectives. These reviews may be performed in conjunction with a financial statement audit, internal audit, or other form of attestation engagement.

Reconciliation audit – relates to audit of various types of reconciliations which includes mainly bank reconciliation. In addition audit of other reconciliations like debtors and creditors reconciliations are also performed in conjunction with a financial statement audit, internal audit, etc.

Investigation Audit

Investigative Auditing consists of the detection, tracing, quantification and prevention of fraud, money laundering and terror finance. Investigative Auditing involves the examination of accounts and the use of accounting procedures to discover financial irregularities and to follow the movement of funds and assets in organizations.
The objects of Investigative Auditing include, inter alia


  • Identification of suspects;
  • Determination of damages;
  • Quantification of damages;
  • Prevention of damage;
  • Identification of financial activity;
  • Tracing of financial assets.

Supply Chain Audit

Supply Chain Management (SCM) is the management of the flow of goods and services. It includes the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. Management of material and information flow in a supply chain to provide the highest degree of customer satisfaction at the lowest possible cost.

Supply chain management requires the commitment of supply chain partners to work closely to coordinate order generation, order taking, and order fulfilment. They thereby create an extended enterprise spreading far beyond the producer’s location.