Auditing For E-Commerce Companies in UAE

CDA's Auditing Services For E-Commerce Companies in UAE

Along with the new Corporate Tax (CT) law, effective June 2023, E-commerce companies now highly need to analyse their financial statements and audit their entire financial processes. According to UAE authorities, completing and furnishing audit reports is a necessary condition for renewing a company's license especially in the free zones. In accordance with UAE commercial company law, an annual audit must be performed on the mainland. Wherever banks have financed a company, an audit report must be filed to continue the same. 

Auditing firms like Charles and Darwish Associates come into play here. As one of the leading audit and accounting firms in the region, CDA boasts of assisting multiple companies with their annual and quarterly financial reports and more. Often, stakeholders, clients, or investors request a financial audit report. For multifaceted businesses like E-commerce companies, audit reports provide a clear picture of the company’s financial standing. The main objective of auditing an E-commerce venture is to ensure the reliability of statements of financial position and to add credibility to the financial performance of the company.

Relevance of Auditing for E-commerce Businesses in the UAE

UAE has specific protocols that companies, including of E-commerce) need to adhere to. Financial statements need to be systematically organised under the International Financial Reporting Standards (IFRS) system to comply. Auditing firms like CDA can take off the much-needed burden of accounting and auditing for each and every operation, while companies can sit back and focus on growth, expansion, and profits. 

With E-commerce industry being highly competitive, multifaceted, and always evolving, keeping track of every operation becomes increasingly important to understand the flow of funds and the internal controls of the company. With an effective auditing partner like CDA in your stride, you can expect each and every facet of your E-commerce company to be accounted for and your stakeholders completely assured.

Quality Auditing Service to Benefit your E-commerce Company in UAE

Auditing firms carry out processes that are equivalent to an intensive financial health checkup for your company. Audit processes might look lengthy, but quality auditing will boost your E-commerce venture’s standing. Here is what quality auditing mostly looks like: 

• Internal Scrutiny:

In a multifaceted business model like E-commerce, audit firms like CDA boost the morale of investors and stakeholders by an E-commerce business that their funds are being used in the right spaces. A quality auditing firm helps understand internal operations and controls and identify any discrepancies in cash flow.

• Estimation of risk of miscalculation:

The winning bet of a quality auditing system is risk estimation for any miscalculation in the company’s finances. You do not want any vulnerabilities or business wounds to remain exposed, and quality auditing by firms like CDA means everything is identified and resolved before the reports go to higher authorities. 

• Meeting Business Objectives:

Quality auditing ensures that in an E-commerce business, growth objectives are being met while assessing the internal controls of the business model. Firms like CDA take care of reviewing the business site model enhancement, business workflow, determining assets of value, and revenue generation from site traffic, which are some of the business objectives of an E-commerce platform, basically combing through your entire business in the process. 

Quality auditing also assures you of the more profitable areas of your business and helps you identify the ones that don’t hold appeal.

CDA’s Auditing Process for An E-commerce Company

CDA takes the hook for quality audit processes and delivers fine reviews for them. The time duration for an auditing process can vary from 6-18 months for new entities, while for Free Zones, it is 12-15 months. In the area of E-commerce, sales tax and nexus laws are of utmost compliance priority. CDA stands to assure that every regulatory requirement is met with ease.

CDA’s audit process for your E-commerce company would look like:

• Planning:

Thorough planning is a prerequisite to any audit process. CDA’s professionals plan by understanding the degree of auditing required and the time duration for the same; all business facets of the organisation and the operations carried out, and assessment of risk of misquoting the financial statements. A detailed checklist is also prepared to assess the quality of financial health of the company.

• Financial audit tests and Account Analysis:

After the planning phase, CDA’s experts run audit tests on the organisation to understand internal controls, and expenses corroborated and reviewed. The classified vendors are examined to legitimise their existence. 

CDA’s account analysis refers to identifying any major changes since the last audit in the E-commerce venture’s financial documents– and the reasons for the same. Since there are multiple accounts of multiple facets in an E-commerce business, CDA will comb through each and every detail before making a report. Suppose your E-commerce company has a separate payments app apart from a shopping website, those two will be analysed and reviewed separately at CDA. 

• Preparation of Audit Report:

Audit report preparation is the most crucial phase of auditing. CDA ensures that a report includes all the legal and financial information about your E-commerce company, the tests and reviews done to understand the financial health of the company, vulnerabilities in internal controls systems or similar issues, after which, the report goes to higher authorities. 

• IT Audit:

E-commerce businesses mostly run on software, data and advertising. CDA’s data experts will be doing a thorough review of the internal systems in IT systems. Compliance with digital presence laws is vital for any E-commerce company to stay up and running.

Apart from these, CDA also audits any breaches in management or control as well as the company’s plans, goals, and operational procedures for better transparency. 

CDA as an Audit Partner for your E-commerce business:

With businesses booming and new laws to adhere to, E-commerce can be a soft spot for business vulnerabilities. CDA’s quality auditing process can help you sit back and focus on only profits and growth.

At CDA, we take on the tasks of reviewing and analysing your E-commerce business’ financial as we go through the financial year. While compliance laws and regulations may keep evolving– at CDA, our professionals believe in transparency and quality deliverance for your businesses. 

If you value the same, and/or need help identifying business strengths while reviewing your E-commerce venture, give us a call!