Internal Audit in Post COVID Era UAE

Ammar Kotwal, Senior Auditor


HLB HAMT - Accounting Firm in UAE

Phone:- +971 4 327 7775
Mobile:- +971 558074568
WhatsApp:- +971 56 219 1607

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    Internal Audit (IA) is an independent management function, which involves a value addition by suggesting improvement methods and strengthening the overall governance mechanism of the entity, including the entity’s strategic risk management, internal control system & processes.

    Internal Auditing demands professionals to acquire an in-depth understanding of the business culture, systems, and processes, in order to provide organization with an assurance that internal controls in place are effective/ adequate to mitigate the risks.

    The Internal auditor should do a risk assessment of an organization and identify critical audit areas. The audit process should be organized in such a way that more time is devoted to high-risk areas and issues, while less time is devoted to low-risk areas.


    Risk prevents an organization from achieving its objectives. Risk can cause financial disadvantage, or it can result in damage, loss of value, and /or loss of an opportunity to enhance the enterprise operations or activities. Risk is the product of the likelihood of occurrence of an event and the impact of such occurrence to an enterprise. Risk may be broadly classified into Strategic, Operational, and Financial.

    Strategic Risks:- are associated with the long-term objectives of the enterprise

    Operational Risks:- are associated with the on-going, day-to-day operations of the enterprise.

    Financial Risks:- are related specifically to the processes, techniques, and instruments utilized to manage the finances of the enterprise, as well as Enterprise Risk Management processes involved in sustaining effective financial relationships with customers and third parties.

    Impact of COVID -19 on Internal Audit

    In the recent past, due to COVID-19 many companies had to limit or suspend business operations and permit employees to work from home. These measures have significantly disrupted the activities of industries such as tourism, hospitality, transportation, retail, entertainment, manufacturing and the financial sector.

    The significant risk which have popped up for companies includes impairment of assets due to financial losses, inventory valuation lower than cost, disruption in supply chain management, delay in recovery of receivables, changes in risk assessment, and the impact on its ‘going-concern’. Other important risk includes liquidity, Working capital, employee health and well-being, and employee return to work.

    The impact of COVID-19 should be identified at an early stage of the preparation of the Audit plan with the help of appropriate risk assessment procedures that are actively communicated to relevant stakeholders, including the management, to assess and identify situations that require immediate actions and enable auditors to plan the audit.

    While Making Audit plans the auditor should consider :

    • Availability of client staff to provide necessary explanation and supporting evidence Via online video calling
    • Ability of audit teams to visit client sites to conduct audit work.
    • Ability to confirm reliability/authenticity of scanned documents provided to enable remote auditing
    • Ability to obtain sufficient appropriate audit evidence if physical stock counts are attended remotely
    • Auditors may need to identify and reassess the risks associated with company operation as a whole as the information on which the initial risk assessment was based may have changed. Due to COVID -19, the operations of few companies may have been materially impacted.

    COVID -19 and remote working requires companies and organizations to take immediate decisions and actions to ensure business continuity, strengthen finances through the recovery of receivables and protect staff by restricting travel.

    Ways to respond to COVID -19

    Video conferencing technology with software like Zoom, Microsoft teams, Webex, Skype, Goto meeting, etc. has been particularly helpful to enable internal audit functions in a remote working environment. Internal audit functions have used the technology to hold virtual meetings in place of face-to-face meetings, carry out inventory walk-throughs or walk-throughs of specific processes with process owners. Data analytics has also been an effective tool, enabling internal audit functions to focus on high-risk areas by analyzing data for anomalies, patterns, and trends.

    Audit plans can be modified/prioritized from a traditional basis to one that focuses on the current year only and including an audit function where risk is very high and which can be easily done remotely. Audit plans can be prioritized based on :

    • Areas/functions which can be kept on halt, or postponed because they are no longer relevant
    • Functions which can be done remotely
    • Areas to be added due to new risk because of change in operations due to COVID-19.
    • Audit areas which should be covered mandatorily as per regulatory requirement

    Internal Auditors should focus more on crisis management and business continuity and later review the effectiveness of the same. They should make use of RPA and AI & data analytics in identifying the outliers, exceptions, and in obtaining other meaningful results. Internal Auditors should obtain offsite access to the client system in order to gather the data independently without the help of any client staff.

    The pandemic has opened up many new practices that work effectively and it is highly recommended that the internal audit functions adopt these as the ‘new normal’.

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    Varun R Chandra
    Varun R Chandra
    07:38 25 Apr 21
    HLB Hamt is highly recommended! They have the quality of services that would satisfy your needs. I'm glad I found them.
    Giuseppe Assi
    Giuseppe Assi
    06:20 31 Jan 21
    Mohamed Sheriff
    Mohamed Sheriff
    16:16 28 Jun 20
    Experience with HLB Hamt in audit experience is great pleasure. They deploy well qualified accounts team for audits.... And the amount of checking they perform give the management of the company confidence that internal controls are well in place. We are glad to see they have high standard of audit more
    218141 JOSEPH THOMAS
    218141 JOSEPH THOMAS
    16:20 23 Jun 20
    Professionally managed firm with commitment to the engagements taken. My company and its group are assigning our... requirements for last 12 years to HLB and we don’t have any negative remarks on any more
    07:14 23 Jun 20
    In my opinion, HLB Hamt is one of the best professional firms in UAE after big4. Excellent client service, professional... and competent staff and timely delivery are their strength. Over the years they have developed the infrastructure and skill set to handle multiple verticals ie, audit, tax services, consulting, IT support etc.Wishing HLB Hamt team all the very more
    08:28 21 Jun 20
    Thank you Team HLB hamt...Your internal auditing team put the good amount of time and inputs in helping the... organisation making considerable improvements throughout the organisational working structure and helps in building the better more
    Maharajan Subramaniam
    Maharajan Subramaniam
    18:17 06 Jun 20
    High-Performing IT Teams, I'm impressed with the knowledge level of their deputed staff, audit procedures, and... checklist adopted. Mr. Vimal especially understand the requirement and provide solution not only technical feasibility and also considered budgeting. We’re confident in their more
    Mohammed L
    Mohammed L
    08:07 05 Jun 20
    We have been working closely with them on payroll services for quite sometime.They provide very professional... services,experts in domain and excellent support. Would recommend more
    06:32 04 Jun 20
    Very professional team. Vimal has always given us good solution advice for various Software and IT Infra projects. We... are very Extremely satisfied working with him and his team. Wishing them more
    Basil Daniells
    Basil Daniells
    05:55 03 Jun 20
    I have worked with HLB as a partner of Sage for about 2 years, they were dedicated to the success of the partnership... and kept aligned with the business plan that was agreed between our two companies. They are always ready to go the extra mile for a customer and don’t shy away from challenging circumstances. Keep up the good work and wish you all the success in the more
    Amar Kashyap
    Amar Kashyap
    19:28 02 Jun 20
    Team of well qualified and organised professionals. Their reports are not based on numbers first they will understand... their client and their business. They are highly recommended and trust more
    Radz de Jesus
    Radz de Jesus
    16:03 02 Jun 20
    We're glad to have found HLB Hamt to conduct the IT audit and risk assessment for our organization. We have learned a... lot from their team during that first project. And since then, we've continued to be in touch with them. Mr. Vimal especially is very good at presenting technical concepts in simple yet interesting ways that non-IT and business people alike would easily catch. We are very happy with the professionalism and quality of service they provide. They leave their clients nothing short of satisfied. Highly more
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