On the need
for the accounting review
The success of closing the accounts is conditioned by
the accounting review. This is a control-oriented exercise, the aim of which is
to ensure that the financial statements reflect reality and comply with legal
requirements. Accounting is indeed subject to several risks, including error
during accounting allocations, or in the event of an accounting position
contrary to the regulations in force. There is no lack of reasons for the
balance sheet and the profit and loss account to distort reality, whether
intentionally or not by those who construct or present the annual accounts.
Accounting therefore requires safety nets, hence the legal appointment of an
auditor in certain organizations. However, the accounting review is not an
obligation.
The quality
criteria of the accounting review file
The accounting review uses control techniques, the
use of which is parallel to the production of the accounts. It is important to
use them wisely so as not to disturb the timetable for drawing up the balance
sheet and the income statement. The review work must therefore be organized so
as to properly separate the accounting entries and their control. The
construction of an accounting review file must allow this organization,
provided that the following quality criteria are met:
Appropriate documentation: certain accounting entries are the result of a position taken by
the company, as in the case of provisions. In the event of a proven risk, the
impairment of the asset or the recording of a liability depends on an estimate
of the expected loss or the outflow of resources. Any anticipation to be
translated into accounting rests on a method chosen by the organization. A
provision is therefore less objective than an invoice. Consequently, the
accounting arbitrations must be documented in order to justify their relevance
and constitute a basis for compliance with the principle of permanence of
methods. The teams in charge of the accounting review ensure the existence of
this documentation and include it in their file.
Adapted referencing:
the work of accounting revision must be referenced
so that it is possible to easily associate the accounting entries and their
control. It is a question here of classifying and codifying the working papers
of the reviewers so as to produce a quality Auditors in Dubai trail.
Evidence of information: the necessary and sufficient nature of the balance sheet and income
statement items must be demonstrated using sufficiently convincing accounting
documents. Consequently, the revision file must include as much as possible
documents issued by third parties to the organization, such as invoices,
contracts, statements, notaries acts, etc.
Accountability
of accounting actors: the accounting review file is
not only a tool for formalizing the work. It is also and above all an approach
framing the accounting production and its control. Responsibilities are
therefore clearly to be established between the various actors in the process
of closing the accounts in order to avoid omissions as well as duplicates
between accounting treatment and review.
Data security: the production and the accounting review are professional secrecy.
The information processed and reviewed is confidential given its scope.
Consequently, access to the accounting review file, both physically and on an
IT level, is to be restricted to only those authorized to carry out checks.
Communication with the statutory approved
auditors in UAE: the results of the accounting review, and therefore
the file, must be sent to the statutory auditors so that the control and audit
approach are complementary, and therefore as effective as possible.
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