In an era of strict financial inspection over the financial operations of non-profit organizations, board members must ensure to spend organization resources in the best way that promotes accountability and transparency. The significance of conducting an independent financial auditing by Audit firms in Dubai is as under:
Compatibility with Agreements
In majority cases, non-profit organizations gain the greater part of their finances from State and local sources. Sometimes a requirement is imposed by the financers to provide a copy of independent financial statement audit to ensure the stability of funding from that organization. Failure regarding the provision of such audit report might result in the delay of funding and in some cases, severe action taken by the financers might lead toward the cancellation of the grant agreement.
The organization must ensure that awareness about the reporting requirements for any grant agreements it might gain. Majority of the granting organizations include special feature ‘key contacts’ that create awareness about the unique reporting requirements as per grant agreement.
The attraction for Financial Contributors
Enhanced inspection of non-profit organizations has raised the level of requirement for the non-profit organization. Donors prefer such organizations which ensure the provision of the report of independent auditing. Somehow the rating system is now based on the behalf of the annual independent audit of their financial statements. It will give donors surety about funding to the right organization. Even some private foundations and donors do not provide finances to those organizations that did not prefer to provide an audited financial report.
Encouraging Healthy System of Internal Control
The conclusion of the internal control audit, the feedback provided by the auditor mentioned that whether non-profit’s internal control system is working accordingly or not.
One should not feel hesitated in order to conduct independent auditor at the end of the year to address internal control processes and procedures. The audit in primary conducted to ensure financial statements are properly declared. The auditors are generally very knowledgeable and it can guide your non-profit with benchmarking standards.
Protection against Fraudulent
A financial audit is basically not designed to prevent occurrence or detection of fraud, it can, however, strengthen the internal control, providing an additional layer which can act as protection against dishonest activities.
The organization should keep independent auditor well informed about any fraud occurrence, despite if it is actual, expected or assumed fraud. No barrier in communication will permit the non-profit organization and the independent auditor to prepare a plan to judge the non-profit’s system of internal controls and to develop work instructions and procedures in order to identify and minimize the risk of fraud occurrence.
The basic purpose of conducting an independent audit is
- Promoting a healthy environment for generous and prospective donors
- Launching and developing necessary processes
- Audit of funding statement will provide necessary advantages leading toward the continual progress and development of non-profit organizations.
You can click here to contact auditing services or consultants in UAE to ensure that your non-profit organization is following the right path toward the growth of the organization as well as the growth of society as well.