Risk Advisory

Challenges Addressed by Accounting Reviews

May 13, 2024

At MBG, our team of experienced accounting professionals leverages industry-specific knowledge and technical expertise to conduct comprehensive accounting reviews tailored to each client's unique needs. Through our rigorous review processes and practical recommendations, we help UAE businesses address these common technical challenges, maintain accurate financial records, comply with regulations, and make informed decisions based on reliable financial data.

Common Technical Challenges Addressed by Accounting Reviews:

  1. Revenue Recognition: Revenue recognition is a complex area that requires careful evaluation and application of accounting standards. At MBG, our team of experts reviews clients' revenue recognition policies and their implementation to ensure compliance with relevant standards. We analyze complex contracts, multiple performance obligations, and pricing arrangements to provide recommendations for accurate revenue recognition.
  2. Accounts Receivable and Credit Management: Effective accounts receivable management is crucial for maintaining healthy cash flows. MBG's accounting reviews assess clients' credit policies, aging analyses, and allowances for doubtful accounts. Our team provides insights and recommendations to mitigate credit risks, improve collections, and strengthen credit management processes.
  3. Inventory Valuation and Management: Inventory is a significant asset for many businesses, and its accurate valuation and management are essential for financial reporting. MBG's accounting reviews thoroughly examine inventory costing methods, obsolescence provisions, physical inventory count procedures, and inventory management systems. Our recommendations aim to ensure accurate inventory reporting and minimize potential losses.
  4. Fixed Asset Accounting: Proper fixed asset accounting is critical for financial reporting accuracy. MBG's accounting reviews assess the completeness and accuracy of fixed asset records, including capitalization policies, depreciation methods, and asset disposals. We ensure compliance with accounting standards and provide guidance on reflecting accurate asset values in financial statements.
  5. Related Party Transactions: Related party transactions are subject to heightened scrutiny and disclosure requirements in the UAE. MBG's accounting reviews analyze the identification, documentation, and disclosure of these transactions to ensure transparency and compliance with regulatory requirements. Our team provides recommendations to strengthen related party transaction processes and disclosures.
  6. Payroll and Employee Benefits: Payroll and employee benefit calculations can be complex, involving various deductions, contributions, and accruals. MBG's accounting reviews examine the accuracy of payroll processes, compliance with labor laws, and the proper accounting for employee benefits like leaves and end-of-service benefits. Our recommendations aim to enhance payroll accuracy and compliance.
  7. Asset Impairment and Fair Value Measurements: Impairment testing and fair value measurements require specialized knowledge and judgement. MBG's accounting reviews assess the methodologies and assumptions used in these calculations to ensure accurate reporting and compliance with relevant accounting standards. Our team provides guidance on improving impairment testing and fair value measurement processes.
  8. Consolidation and Group Accounting: For businesses with subsidiaries or complex group structures, consolidation and group accounting can be challenging. MBG's accounting reviews examine the consolidation process, intercompany eliminations, and the appropriate application of accounting policies across the group. Our recommendations aim to ensure consistent and accurate financial reporting for group entities.
  9. Leases and Right-of-Use Assets: The implementation of IFRS 16 (Leases) has introduced significant changes in accounting for leases and the recognition of right-of-use assets. MBG's accounting reviews evaluate the accuracy of lease calculations, disclosures, and the impact on key financial metrics. Our team provides guidance on implementing the new lease accounting standard and ensuring compliance.
  10. Financial Instrument Valuation and Hedge Accounting: The valuation of financial instruments and the application of hedge accounting principles can be intricate. MBG's accounting reviews assess the appropriateness of valuation methods, hedge documentation, and the effectiveness of hedging relationships for clients with complex financial instruments or derivative transactions. Our recommendations aim to strengthen financial instrument valuation and hedge accounting practices.

Contact MBG today to learn more about our technical expertise in accounting reviews.

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