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Artificial Intelligence Integration in Auditing

Artificial Intelligence
Artificial Intelligence

Artificial Intelligence is poised to be a game changer for a lot of industries. By deploying the right AI technology, businesses are improving their operational efficiency, reducing costs and making the decision making process smooth. Audit industry is also not behind in integrating AI technology. It is creating a massive impact on the industry practices with the fusion of new AI tools.

Artificial Intelligence (AI) technologies have capabilities to work on complex tasks in a short amount of time. It is a great opportunity for auditors to leverage these tools into their auditing practices to make their work more efficient and accurate. AI technology will help auditors work smartly by optimising their time, analysing deeper sets of data in a shorter time frame. In traditional set up, data mining of hundreds of millions of data is impossible. Using AI technologies, auditors can carry out data mining more accurately by processing large volumes of data. Also, AI technologies work with high level precision which a normal human may not be capable of doing.

Another benefit of using AI technologies in auditing practices is that it eliminates fraud and irregularities in the auditing process. WIth AI the auditing process has become automated with less human involvement. Using AI, auditors can examine audit analytics and financial statements to identify any potential misstatements by comparing the source data to financial statements. Moreover, AI can help auditors identify the level of compliance and control audit risk by comparing the source data to the client’s policies and procedures. 

Conclusion

Audit industry is still in an evolving phase with new AI tools. Some naysayers predict that these technologies will ultimately replace the auditors. However, many auditing professionals see that AI technologies will not replace auditors but will evolve their role, practices and skillset. Ultimately, It will improve the overall operational process, audit quality and give a competitive edge. 

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Why Long-Term Planning Is Important for business?

long term planning
long term planning

For initiating anything, planning is the first key step to make. Planning is important because it helps prepare your business to achieve their goals. Long-term planning is important if you want your business journey to turn out smooth. However, market dynamics are continuously evolving with a plethora of new trends, strategies and tools. This doesn’t mean your planning will go in waste. Make sure to prepare a business plan that can adjust with on-going market changes and can fit with day-to-day changes.

Without any long-term planning, business operations can become an impossible task to manage.In every business there are different departments accounts, communication, HR, marketing etc. Every department carries out important tasks for business which needs to be monitored to analyse if everything is working accurately. You need solid long-term planning to maintain a system of every department of your business. This will ensure smooth running of the business, eliminate any discrepancies and lead you towards growth.

Importance of long-term planning

Once you analyse the market situation and based on that you come up with a strategic plan, there are high chances of your business to sustain even in the worst market conditions. Your business will eventually crave out its ways towards success with an effective plan. The competition in the market is intense. There is very little room for business to make mistakes as your competitors will be ready to steal your place. Therefore, conduct comprehensive market research, analyse the potential risks, and build a business framework around it. Most importantly, analyse how well your competitors are performing. How can you make your products/services more interesting and attractive?

For long-term planning, try to imagine how you wanna see your business in 5 to 10 years. Define your long-term business goals, a road map to achieve them, how to get resources to expand your business in future.

Bottom line

Long-term business objectives are a necessity for any business. It gives confidence to businesses that they are well prepared to face any roadblocks in the coming future. Long-term planning will keep your business motivated to achieve their business objectives and keep growing further.

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Cash flow: How small businesses can improve?

Cash flow for business
Cash flow for business

Small business owners often find it difficult managing their cash flow initially. Problems can also occur with well established and profitable companies if their finances, operations or investing activities are not streamlined. The management of it has become more critical than ever. Maximisation of cash flow can help your company receive profits faster and meet targets in a short time frame.

Here are four strategies for small businesses to improve their cash flow:

Enforce quick payment terms:

Right from the beginning of your first big sale, make sure to negotiate for quick payment terms. Make it clear to your clients that late payments are not acceptable. If your clients are delaying your payments, that will for sure put you into a negative cash flow shortage. Furthermore, you can ask them for partial deposits or consider offering discounts to clients if they make early payments. In this way they will be encouraged to pay you timely.

Minimise unnecessary spending:

Make sure to reduce your spending on non-essential items. This can include gifts for clients, office space that is not used, entertainment or staff amenities. Also, the best way is to scrutinise your expenses and look out how to free up your cash flow. 

Forecast:

Basically, cash flow forecast is the breakdown of your monthly/weekly/quarterly business’s incomes and outgoings. This will help you analyse where you will have a surplus or deficit of cash in your business account. This will help you manage your company’s finances and plan when to pay expenses. 

Customer credit check: 

There might be a case where a customer doesn’t want to pay you in cash, as an alternative make sure to conduct a credit check, especially before you sign them up. If the client has poor credit, you can safely assume that you won’t be receiving payments timely.

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Internal controls deficiencies evaluation

Internal controls evaluation
Internal controls evaluation

Identifying and evaluating internal controls can be a difficult task for management. However, it is a crucial aspect of the company. An organization’s operational and financial health requires a risk management system. For this purpose, companies must hire professional auditors if they don’t have their in-house audit team. Auditors will scrutinize and check whether your internal control has any deficiencies that needs correction. These controls aim to highlight assurance of a company’s achievement of business objectives. This whole process will make your business operations more streamlined and efficient.

Deficiency occurs when a control doesn’t allow the company’s management or employees to detect, correct or prevent misstatements on a timely basis. Therefore, management must develop a system under which the company’s controls are regularly evaluated. It may be challenging to create a system but these controls help mitigate risks and are essential for risk management.

Benefits of Internal Controls

  • – Help safeguard your company’s assets and reduces possibility of fraud
  • – Maintains integrity of financial information and transactions
  • – Ensures the compliance with financial and accounting regulations
  • – Improves the company’s overall performance and operational efficiency
  • – Establishes operations monitoring procedures

How to evaluate internal controls?

  • – Assess the internal control environment, and whether you are operating with integrity and ethical values. And if your employees are adhering to internal control responsibilities
  • – Evaluate your risk assessment and analyze how they can be tackled effectively. This evaluation will ensure if your internal controls are in place or need any fixation.
  • – Scrutinize company’s sensitive information and communication system to ensure the accuracy of the information in prepared reports

While some risks are inevitable for companies. However, with effective internal controls you can prevent a major loss or devaluation. Companies who regularly conduct internal control evaluation will be able to mitigate risks and ensure compliance of regulations. Make sure to hire a professional audit team who take over this job and make your internal controls streamlined. 

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Cyber Security Tips for Small Businesses

Cyber security tips for small businesses
Cyber security tips for small businesses

With an increasing use of technology, cyber security risks are also increasing. It is extremely crucial for business owners to take necessary steps whilst they are setting up their new business. However, many small businesses are either unaware of the cyber threats or they just don’t take them seriously. Certainly, setting up a new business is a daunting process. You have to take care of many crucial factors and you might oversee a few things. The last thing any business wants is to have your data hacked.

Therefore, taking proactive steps to avoid any cyber threats is critical. Cyber security has to be an important part of your planning. Businesses need to come up with an important cybersecurity strategy in order to protect their own business, their clients and important data from cyber crimes.

5 tips for small businesses for cyber security

Here are five tips for small businesses for cyber security:

  1. Backup your files: Cloud storage and cloud accounting has increased the risks of cyber attacks. It is highly crucial to have a backup of your important data in case any files get corrupted. Make sure to automatically backup your data offsite or online on a regular basis.
  1. Limit data and information access: Do not provide all the sensitive information about the company to one person. Make sure to give access to employees of specific information and data that they need to work on. Softwares should not be installed without management’s permission.
  1. Train employees in security principles: It is important to train your staff about important security practices and principles that they need to adhere. These practices include requiring strong passwords, and establishing appropriate Internet use guidelines that detail penalties for violating company cybersecurity policies. Assign responsibilities to your staff who have a good comprehension of how computers work. 
  1. Use anti-virus software: In order to keep your data safe, make sure you use anti-virus software to fight against cybercrimes. ANti-virus programs are essential to  Use the best available software and run antivirus checks regularly to mitigate risks.
  1.  Use Two Or Multi-factor Authentication For Logins And Approvals: The best way to protect your business information is by using two or multi-factor authentication for logins and approvals. In this way you can protect your important accounts. You will add login and password and then will need management’s approval to access information from it. Small businesses should definitely consider opting for this authentication process. 
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How to build effective business strategies?

how to build effective business stratagies
how to build effective business stratagies

In today’s time, businesses are constantly facing challenges to build effective business strategies. Industry is evolving at a fast pace therefore, it is difficult for business leaders to keep up with latest developments. Leveraging new technologies and latest trends, businesses can explore the unseen opportunities. However, there can be complexities that businesses might face by implementing a new framework.

Basic idea to survive in this competitive business landscape is to have an adaptive and flexible business approach and strategies. This approach can help you lead through all the potential roadblocks on the way of your business journey. 

  • – Improved decision-making process: Today, it has become more important to make data-driven decisions. Business leaders need to stop relying on their opinions or intuitions and start incorporating technologies that can help make them better decisions. Utilising correct technologies that can give you data insights will eventually help you make a successful business strategy. Also, your business needs to have a clearly defined decision making process that can make their business operations streamlined. 

  • – Eliminating organisational silos: Corporate world is changing relentlessly and requires collaborating with other companies. To cater to this approach, company’s must eliminate their silos and support effective and cross-functional collaboration. This can create better opportunities for companies and help them have long-term success. 

Business leaders must always be open to explore new opportunities and latest updations happening in the industry. This is the only way to gain long-term success. Furthermore, business leaders must innovate and embrace new approaches that work in favour of their business. 

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Financial Services Outsourcing

financial services outsourcing
financial services outsourcing

Learning from the uncertain times, the finance team of companies are making efforts to build a strong financial model to make it ‘future-proof’. The aim is to have a strong financial base that can help companies survive even in uncertain circumstances like Covid-19. However, it is hard for businesses to keep up with changes in business dynamics and manage their finances efficiently. To build an accurate financial framework, finance leaders can opt for outsourcing services to meet those challenges. 

Need for outsourcing financial services

Today, the business dynamics are quite unpredictable. This is putting an increased pressure on finance leaders to meet the requirements of today’s time. Managing all finances accurately and timely is quite challenging. Therefore, it is perfect to get these services outsourced from a professional. 

Outsourcing financial advisory services basically means that you contact a service provider that appoints professionals that essentially acts as your finance team. Also, These finance advisors who will guide you how to deal with financial pressures, and what improvements you can bring in your current financial framework. 

You can get following benefits by outsourcing financial advisory services:

  • – Outsourcing financial services is more cost and time effective
  • – In-house finance team can become more focused on daily financial activities
  • – Improved financial decision making
  • – Providing support on complex financial matters

Bottom line:

Financial affairs of businesses are becoming difficult day-by-day. Legally, regulations are changing after some time and there is a mountain of regulations that businesses need to adhere to while maintaining their financial position in the industry. A dedicated finance team can manage this job for you. This will help companies focus on other key areas of business while knowing their finances are being managed by a team of professionals. 

Financial framework is the backbone of any business. Therefore, business owners must have detailed knowledge about how to handle their finances.

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FTA Launches Whistleblower Programme

FTA whistleblower program 1
FTA whistleblower program 1

In April 2022, Federal Tax Authority (FTA) launched a new programme Raqeeb, “whistleblower system for violations and tax evasions”.  As UAE always aims to ensure tax compliance and regulations, therefore this programme was launched to continuously monitor the tax compliance. 

The purpose of Raqeeb initiative is to:

  • – Increase tax awareness in the UAE
  • – Report any tax violations
  • – Increasing compliance with tax legislations
  • – Increasing the effectiveness of tax audits and minimizing the cases of tax evasions
  • – Prosecuting non-compliances with tax legislation and charging penalties or tax fines on them.

FTA has also announced a monetary reward to informants in order to encourage reporting of any non-compliance in the UAE. Monetary reward will only be given when certain conditions are met. Furthermore, FTA has published a detailed guide for informants to give them information about the programme and process of submitting a whistleblower form. Check the guide on Raqeeb programme here.

Who are qualified as informants?

  • – An informant is an individual who takes the responsibility to inform FTA regarding any non-compliance of tax or highlight any other illegal tax activities.
  • – Informants cannot report non-compliance activities with an anonymous identity. However, FTA ensures to keep the informant’s identity confidential and secure with FTA.
  • – It is mandatory for the informant to sign a non-disclosure agreement (NDA) when submitting the lead to ensure the protection of any confidential and sensitive information including information on monetary rewards.
  • – The informant term excludes FTA employees and their relatives up to the fourth degree of consanguinity, as well as other persons who obtained information through their position in or connections with the FTA.

Conditions for Monetary Reward

FTA specifies certain conditions under which they will give monetary reward to informants. These conditions are as following;

  • – The information provided is credible and not obtained by FTA previously
  • – The whistleblowing form is filled accurately and completely;
  • – The tax amounts collected from the reported business exceed AED 50,000;
  • – The reported person has exhausted all forms of objections and appeals.

After scrutinising the provided information by the informant and collecting the tax from the reported person, FTA will deposit the reward to the informant’s bank account. The monetary reward is directly proportional to the amount of tax collected by the FTA.

Globally, tax authorities have become more vigilant and enforcing strict tax laws to ensure tax compliance. Also, the Raqeeb initiative is a great step by the UAE tax authority that will create a significant impact on the business world. UAE hopes to create a prosperous business environment and implement tax laws according to global standards. 

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Competitive landscape: Make your business survive

Business landscape

In today’s time, the business landscape has become highly competitive. It has become extremely difficult to stand out in the business arena. Moreover, there are a plethora of businesses selling or offering the same products or services, but what makes them notice is their unique brand identity and how they market themselves. However, it is more challenging for small businesses to survive in a fierce business market. For this, businesses need to make deliberate effort and build effective strategies to achieve their business goals. Though, inclusion of certain elements in your business plan can help your business stay ahead of the competitors. 

How can you survive the competitive landscape?

Here are few things that can help businesses survive in the competitive landscape:

  • – Make your brand unique: The first rule is to make your brand products and services unique. This will help drive customers’ attention and increase your sales. Build a strong brand identity to differentiate from your competitors. Ultimately, it will leave a lasting impression on your customers and your brand will increase.
  • – Improve your business operation: Scrutinizing your business operations is important from time to time. It will help you highlight inefficiencies that are becoming a hurdle in your business growth. By removing errors and improving your business operations, you can work efficiently on a competitive business landscape and accelerate your business growth. 
  • – Active social media presence: To compete on a digital platform, it is crucial for businesses to maintain an active social media presence and spread their brand messages to their niche. If you don’t have an updated website on social media accounts, your potential customers will most likely not trust your brand and may revert to other competitors of your brand. Therefore, it is essential to present relevant and promising information on your digital platforms.
  • – Step up your marketing: For any size of business, making continuous marketing efforts is important. Make sustainable marketing campaigns to give out brand messages to your target audience. This will help your target audience understand what you’re offering and how you are better than your competition. Also, a good marketing campaign is remembered by the audience to make a purchase at a correct time when they are ready.

Bottom Line:

Surviving this cruel business environment can be hard where your brand can be easily replaced by any other competitor. However, by building plans ahead of the time means you have won half of the battle. From making your business plan to listing your short-term and long-term goals to ruling the digital platforms, these elements will define your success in the competitive landscape. Do your best about learning about your target audience and you’ll be on a rise despite the growing competition.  

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Corporate Tax implementation in the UAE

Corporate tax
Corporate tax

UAE authorities have announced the implementation of corporate tax in the country from next year. The decision came out as a surprise to the business community as it was surprising news to them. Many businesses in the UAE have enjoyed zero income tax on their profits which will now change from June 2023. Previously, UAE has already introduced VAT, Economic Substance Regulation (ESR), Excise tax and Country by Country reporting. However, Corporate Tax (CT) will also play a significant role in the evolution of the UAE tax regime. 

The decision came into the consideration of UAE authorities to meet the international standards, by implementing similar decisions to their neighbouring Gulf countries. Also, the UAE wanted to modernise their business environment and boost their economy. Moreover, UAE aims at minimising the compliance burden for startups and small businesses in the country. 

Let’s look at some important points regarding implementation and process of corporate tax in the country;

  • – The corporate tax regime will be effective for fiscal years starting from or after June 1, 2023.
  • – UAE has implemented 9% CT on taxable income above AED 375,000. As for larger multinationals, different CT rates will be applied (will be announced by MoF) that generate consolidated global revenues above  EUR 750m in line with the Pillar Two of the OECD Base Erosion and Profit Shifting (BEPS) project.
  • – Ministry of Finance may announce any further relaxations related to Small, Medium and Micro Enterprises

Exemptions of CT:

  • – Natural resources are exempted from the corporate tax and will be taxed under Emirate level as before. 
  • – Foreign individuals and entities who don’t operate business in the UAE regularly will not be charged with CT.
  • – Income of foreign investors generated from dividends, capital gains, interest, royalties and other investment returns.
  • – There will be no withholding tax on domestic and international level

Businesses should in advance prepare for CT by conducting a review of their entity structure, accounting system and processes, financial model, and conduct audits. Certainly, the introduction of CT will have an impact on the tax compliance and costs of most UAE businesses.  Therefore, it is imperative for businesses to understand the tax implications and make any necessary changes in corporate structure, financial model , reporting system to ensure compliance with the new UAE CT regime.