ADGM Fines Audit Firm, Principal $100,000 Over Audit Failures
The penalties were imposed on PKF Accountants and Business Advisers LLP, an ADGM-registered audit firm, and its registered audit principal, Saranga Omprakash Lalwani, for failing to meet required professional auditing standards.
Recommended For YouStay up to date with the latest news. Follow KT on WhatsApp Channels.
The regulator fined PKF $65,000 (Dh238,712), while Lalwani received a separate penalty of $35,000 (Dh128,537).
Inspection reveals significant audit deficiencies
The enforcement action followed an on-site inspection conducted by ADGM's Registration Authority to assess the firm's compliance with the financial centre's Auditors Rules and the quality of its audit work.
During the inspection, the regulator identified significant deficiencies in an audit conducted by PKF and Lalwani for an ADGM-registered entity.
According to the authority, the audit was not conducted and the audit report was not prepared in accordance with International Standards on Auditing, as required under the Companies Regulations Rules 2023.
The regulator also found that the firm and its audit principal had failed to exercise the required level of professional skill, care and diligence.
Failures in fraud risk assessment and audit evidence
The inspection uncovered several shortcomings, including inadequate assessment of fraud risks and failures to obtain sufficient and appropriate audit evidence.
The regulator also identified weaknesses in audit documentation and insufficient evidence demonstrating Lalwani's involvement in the audit process.
These deficiencies formed the basis of the financial penalties imposed on both the firm and its registered audit principal.
ADGM warns auditors over compliance
ADGM's Registration Authority stressed that exercising due skill, care and diligence is a fundamental requirement for registered auditors and audit principals operating within the financial centre.
“The Registration Authority confirms its commitment to maintaining high standards of audit quality and corporate reporting within ADGM,” the regulator said.
It added that registered auditors must comply with applicable professional standards and exercise appropriate skill, care and diligence when carrying out audit engagements.
The authority said the enforcement action reinforces the importance of robust auditing practices and demonstrates that failures to meet regulatory requirements will result in appropriate penalties.
ALSO READ- UAE Central Bank fines foreign bank Dh1.82 million over customer service lapse UAE imposes Dh20-million fine on foreign bank for repeated violations UAE's Dh10 million fine warning: Listed firms face June 30 deadline for AGMs
Legal Disclaimer:
MENAFN provides the
information “as is” without warranty of any kind. We do not accept any
responsibility or liability for the accuracy, content, images, videos,
licenses, completeness, legality, or reliability of the information
contained in this article. If you have any complaints or copyright issues
related to this article, kindly contact the provider above.
Comments
No comment