The Role of Internal Audit in UAE Companies

When oil was discovered in 1950s in the UAE, an economic system which was to a great extent dependent on fishing and worsening pearling industry, the state has undergone drastic transmutation owing to the socio-economic alterations taking topographic point. The chief export of the state is of oil and gas. Today, UAE ranks 8th in the list of top 10 premier oil bring forthing states in the universe, bring forthing about 3.1 million barrels per twenty-four hours. It is besides the 3rd largest oil manufacturer in the universe. In the UAE, fluctuations in the oil monetary values have been diminished due to variegation and hence, because of the oil resources of the state, people by and large enjoy high criterions of life. With the development of oil industry in the UAE, a big figure of foreign workers are seeking the occupation chances that exist in the underdeveloped state. ( Dorish, 2010 ) The chief ground that I am interested in this country is because it is extremely related to my calling ends and aims. Researching this subject at this point might turn out to be a large measure frontward in order to accomplish my purpose as the oil industry in UAE is spread outing by springs and bounds. In any concern determination, hazard is an unconditioned consideration. So, attempts are being made in the field of hazard direction patterns in the oil and gas industry, with a focal point on fiscal and regulative hazards. And late, operational hazards have been on the precedence list of companies across the universe. They intend to pull off, proctor and extenuate all the hazards in a co-ordinated manner. Harmonizing to a recent Ernst & A ; Young Report, entree to militias has been identified as the premier concern hazard for the oil and gas sector, others including uncertainness around energy policy, monetary value volatility, human capital shortages and many more.Purposes and AimsAs mentioned above, the oil industry is extremely susceptible to operational hazards. Internal auditing can help the top direction of a company to place the possible hazards related to their operations and the steps that could be taken to command them efficaciously. The purpose of set abouting this resear ch survey is to concentrate on the importance of internal audit in hazard direction in oil companies. As UAE is a portion of the GCC states, it has a joint aim with the other states of GCC to further technological and scientific advancement of the oil industry. Hence, there is a big potency for oil companies in the state. Hence, this survey would concentrate on the oil companies that are positioned in UAE. Besides, the strength of this industry would supply a ambitious undertaking for internal audit of the same. Based on the above purpose, the following aims can therefore be framed: To happen out the significance of internal audit in oil companies. To set up a correlativity between internal audit and hazard direction in oil companies. To happen out the oil companies on which this internal audit can be done. To happen out the betterment in the aim of GCC states by holding internal audit to better their technological and scientific advancement in the oil industry.Overview of reappraisal of the relevant literatureGlobally, many enterprises are being taken by regulative organic structures across the universe to stress the importance of scrutinizing in any concern. To help the directors, hearers and the IT users, the Information Systems Audit and Control Association ( ISACA ) and the IT Governance Institute ( ITGI ) , in 1996, created a set of best patterns framework aa‚ ¬ † the Control Objectives for Information and related Technology ( COBIT ) . It is a set of by and large accepted steps, indexs, procedures and best patterns which help them to optimise the benefits of utilizing information engineering, and to develop appropriate IT administration and control in the company. Besides, to patronize the National Commission on Fraudulent Financial Reporting, a voluntary private se ctor organisation, the Committee of Sponsoring Organizations ( COSO ) , was formed in 1985. Internal scrutinizing in any industry is carried out in assorted legal and cultural environments depending on the organisation. These organisations may differ in footings of intent, size, complexness, and construction.[ 1 ] Any sort of internal auditing is done by the persons within or inside the organisation. However, there might be differences in the manner internal auditing is carried out due to the organisational environment. Despite these differences, it is necessary that these patterns should conform to the IIAaa‚ ¬a„?s International Standards for the Professional Practice of Internal Auditing ( Standards ) .[ 2 ]This conformation is indispensable in order to run into the duties of internal hearers and the internal audit activity. The chief intent of these criterions is to sketch the basic rules stand foring the pattern of internal auditing and supply a model for executing and advancing a wide scope of value-added internal auditing. These criterions besides set up the footing for the rating of internal audit public presentation and at the same time are intended to cultivate improved organisational procedures and operations. ( The Insitute of Internal Auditors, 2010 ) A figure of writers have argued on the benefits of transporting out an audit of the house. Kuhn and Figgins ( 1994 ) explained that it helps to find the root cause of jobs bing in concern operations. Efficient use of resources of the company which consequences in cost decrease has besides been argued as a benefit by Drew ( 1993 ) . Preventing concern hazards and developing programs and schemes has been besides stated as a benefit by Donaldson ( 1993 ) . Campbell, Goold and Alexander ( 1995 ) and Simpson ( 1995 ) besides discuss the importance of scrutinizing in strategic decision-making which requires company resource information capablenesss so that assorted alternate actions can be identified and supported. ( Wendy Fenwick, 2009 ) Merely to hold a hint of the importance of internal auditing in oil based companies, there are a figure of formalistic preparation plans designed for a hebdomad to cary it out. These audits have been organized by mistieurope in the yesteryear. They can be of critical aid in understanding the hazards asscoaited with the concern, understanding the procurance map, understanding the auditing undertakings etc. Hence, there surely is a large potency for carry oning internal audit for hazard direction of the oil companies in UAE.MethodologyBasically, this research would be done by both secondary and primary research methods. As oil is a extremely ruling sector in UAE ( the state is the 8th largest maker of oil in the universe )[ 3 ], a batch has been published on the Internet. This would assist in understanding the hazards associated with the same and farther aid in carry oning the internal audit. A few of the forums which have information on the same are Khaleej, The Gulf and Factoidz. The nest research to be done in this class would be primary research. Taking interviews is a time-taking every bit good as expensive matter. Hence, questionnaire distribution in a simple random sample amongst oil companies ( including direction and employees ) , can be done. Further, based on the formed hypothesis, z-test can be used to happen out the proof of the research. Proposed Timetable A Gantt chart is being shown below to show the possible timeline of the undertaking. The chart clearly depicts assorted stages of the undertaking life rhythm and the time/ month during which a peculiar stage of the undertaking will be implemented. It can be viewed in the MS-Project file attached with the physician.