When you set up a company in Saudi Arabia, several responsibilities and duties arise for the shareholders and managers. Most of these relate to respecting specific accounting and audit requirements by the legislation in place. Therefore, when it comes to taxation of companies, you can request specific services from accounting and the best audit firm in Saudi Arabia.
In this article, you will learn everything you need to know about, audit firms in Saudi Arabia. In case you need audit services for your business in Saudi Arabia, you can turn up to our legal specialists at your disposal. Let us see:
- What is an audit firm?
- How is an audit firm team composed in Saudi Arabia?
- What are the strengths and weaknesses of large and medium-sized audit firms in Saudi Arabia?
- How can Company Formation Saudi help you get more information about an audit firm in Saudi Arabia?
1. What is an Audit Firm?
An audit firm in Saudi Arabia is a group made up of public accounting professionals to provide administration, auditing, tax advice, etc. Likewise, the audit is an exhaustive work in which, by its complexity, the firms assign interdisciplinary groups of professionals. Indeed, these groups usually integrate audit specialists in tax, finance, and systems. In addition, these groups have experience in the client’s field of action.
Although, several characteristics distinguish an audit firm. Therefore, there are four pillars, which sustain the integrity of this type of association:
1.1 Trust
One of the fundamental characteristics of an audit firm in Saudi Arabia is that it carries out its work independently. This way, they have impartiality as a principle to issue their opinions based on professional judgment. Consequently, this creates the necessary trust between the auditor and the clients. In addition, it contributes to the understanding of their needs and expectations.
1.2 Infrastructure
It is important to consider the infrastructure of the audit firm in Saudi Arabia that you intend to contract. Hence, you must know the services and facilities audits firms have for organizations of different magnitudes. In general, an experienced firm does not contemplate auditing companies that are too small (micro), or very large organizations (macro). This is because they are interested in meeting a certain level of financial growth to keep it competitive and stable.
1.3 Experience in various industries
The most important attribute that an auditing firm must-have is its level of experience in various types of industry. Therefore, this entails having the necessary capacity to approach companies in a particular way according to their branch and organization.
For this reason, it is advisable to choose the office that brings together the best specialists in each of its areas. Moreover, it is crucial to choose those experts who provide solutions to very different business environments.
1.4 Honesty
An audit firm must adopt a policy that contemplates its commitment to comply with the Code of Ethics Accounting. This is key in several ways since it serves to avoid conflicts of interest. In addition, it fully complies with laws and regulations, and, above all, safeguards the security of clients. For more info regarding compliance, feel free to call our legal specialists.
2. How is an audit firm team composed in Saudi Arabia?
As we mentioned previously, an audit firm team seeks to assign interdisciplinary groups of professionals with a lot of experience. In this manner, they can ensure a good service to companies.
Learn about the different levels of audit assistant, audit senior, audit manager, audit partner, and concurrent partner. Additionally, the average experience and responsibilities of each of the professionals who involve generally in this type of assignment.
2.1 Functions of auditors in audit firm projects
Assigning the right staff to the contract is important to comply with international auditing standards. The first principle of the standards states that a person with adequate technical training and expertise as an auditor must carry out this activity.
As we mentioned above, it is advisable to work with a multidisciplinary team that has experience in the sector in which our client works. In addition to the financial auditors, we recommend that at least one tax specialist and one systems specialist participate. In turn, depending on the requirements of the assignment, they can assign other specialists. For instance, the audit for a company that works in the mining sector will require a mining expert.
It is crucial to stand out that you should avoid as much as possible the rotation of the audit team. Therefore, we recommend that the team that starts the audit is the same as the one that ends it. Hence, we present the functions of the core audit team below. These functions are a suggestion and they can adjust or modify it according to the particular characteristics of each signature:
2.2 Audit assistant
He or she performs most of the audit detail work, among its functions, are:
- They are in charge of executing and documenting the procedures assigned in the audit programs.
- Manage the time allocated in the budget.
- Timely communication with the audit senior regarding the progress of the work and the findings and/or critical situations identified.
- Make the adjustments suggested by the Senior in the procedures and/or work papers.
- Execute other tasks assigned by the senior in the development of the work and suggest improvements in the audit process.
2.3 Senior audit
Coordinates and is responsible for the fieldwork of the audit, as well as the supervision and review of the work of the staff:
- She or he is responsible for the planning, execution, and completion of the audit.
- Design the budget and supervise its execution.
- Supervises and advises the audit assistants, ensuring the understanding of the procedures assigned in the audit programs.
- Review all working papers and ensure evidence is sufficient.
- Execute audit procedures in complex areas.
- Identifies problems and communicates them on time to the manager with possible solutions.
- Design and validate reports to management.
- Ensures compliance with the commitments made with the client.
- Reviews the financial statement package and suggests a model opinion according to the results of the audit.
- Suggest improvements in the audit process.
2.4 Audit manager
Next, we will see that the manager is responsible for:
- Assign the audit team that will carry out the work.
- Define the work schedule according to the clients in charge, the commitments with the clients, and the availability of the audit team.
- Monitor audit execution according to schedule and budget.
- Guide the audit team regarding issues identified during the performance of the engagement and discuss them with the Engagement Partner, as appropriate.
- Maintain contact with customers.
- Supervise the preparation of reports that are issued to management.
- Manage the portfolio of clients in charge.
- Manage the acquisition of new clients.
2.5 Audit partner
The audit partner is responsible for:
- Agree with the client on the terms of the audit work.
- Review and approve the audit plan.
- Keep the client updated regarding the progress of the audit.
- Supervise and advise members of the audit team.
- Submit for consideration matters involving differences of opinion.
- Approve or review work papers for critical areas.
- Ensure that the work has been carried out by the policies and procedures of ethics and auditing, as well as with the policies and procedures of quality control.
- They must evaluate the adequacy of the audit evidence.
- Perform the closing of the audit with the client and presented the results of the audit.
2.6 Concurrent partner
The concurrent partner characterizes as not having participated in the direction of the audit. Likewise, its objective is to review the financial statements with a critical approach. In the same way, as a shareholder or interested party in the audited company (stakeholders) would do.
3. What are the strengths and weaknesses of large and medium-sized audit firms in Saudi Arabia?
Before hiring the services of an audit firm in Saudi Arabia, the employer should know the strengths and weaknesses. This refers to the firms operating in the sector assessing what is most suitable for their company. In the same way, the time that they need plans to audit it for the first time, or make a change of auditors.
Next, we are going to focus on the strengths and weaknesses of large and medium-sized audit firms. Additionally, how they may affect directly the company that wishes to hire their services.
3.1 Strengths
In general terms, large and medium-sized firms have a brand. Therefore, they sell their services for their reputation, without depending on the partners who run the organization at all times. As a result, this lack of dependence on partners implicitly entails another strength: continuity. This way, there is a greater facility for succession, since there will always be a second level of professionals who will access the status of partners.
A large or medium firm can always afford to have partners who deal with business management tasks in the firm. For instance, representing the firm, carrying out commercial actions, managing human resources, etc.
3.2 Added value
In the same way, it provides a different value compared to its competition. Hence, it is common for these partners forming part of study groups of national and international accounting bodies. On their hand, they can reinforce the image of the firm with their presence at conferences, seminars, conferences on accounting, and auditing from different universities.
Their ability to access technical and material means is greater than that of small firms and small individual auditors. This is because they usually have a network of national and international offices. In addition, they can dispose of greater technology and access to knowledge management.
These firms offer their employees professional prospects based on professional development and training. In this manner, it will allow them to move up over time in the firm. Likewise, the pyramidal structure and the systematization of tasks allow them to have great profitability and efficiency in their work.
3.3 Weaknesses
However, the potential client must know that large and medium-sized firms also have weaknesses.
The client perceives that in their relations with the firm, their interlocutors tend to change over time. Consequently, this gives rise to a “depersonalization” of the professional relationship, which is sometimes excessive. As a result, this leads to a lack of complicity and closeness with the customer. Additionally, this fact tends to displease, especially the owners of SMEs and large companies that despite their size continue to be family.
In addition, in any large organization, internal procedures take on special relevance, which entails a certain bureaucratization of the relationship with the client. In other words, this translates into a certain slowness in decision-making. This results in a lack of agility and flexibility to meet the demands and, sometimes, the expectations of customers.
Finally, growth usually leads to a lack of control over the quality of the service provided. Hence, customers who complain about the presence of interns with little experience in the work teams that manage their accounts can attest to this fact. In addition, the person can perceive the difference in the quality of service compared to small auditing firms is unrelated to the existing difference in professional fees.
4. How can Company Formation Saudi help you get more information about an Audit firm in Saudi Arabia?
Searching and choosing an Audit firm in Saudi Arabia can be quite complicated and stressful. However, do not alarm, on Company Formation Saudi, we have 20 years of experience in the market. In this manner, we can help you achieve your goal and dream of setting up a business in Saudi Arabia. On other hand, you can count on an array of services that you may find helpful:
- Virtual office services.
- Payroll services.
- Branch services.
- Immigration process.
- Visa services.
- Company formation services, and more.
Are you captivated by starting your business the best way possible with a professional Audit firm in Saudi Arabia? You can call us at our phone number+971 43 316 688 or via email at contact@companyformationsaudi.com.
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