Abu Dhabi:The Registration Authority (RA) of Abu Dhabi Global Market (ADGM) has imposed financial penalties totaling $100,000 on PKF Accountants and Business Advisers LLP (PKF) and its registered audit principal due to audit failings identified during an inspection.
According to Emirates News Agency, the enforcement action followed an on-site inspection by the RA aimed at evaluating PKF's compliance with ADGM Auditors Rules and the quality of its audit work. The inspection revealed significant deficiencies in PKF's audit of an ADGM-registered entity and in the conduct of its registered audit principal.
The identified deficiencies related to failures in conducting the audit and preparing the audit report in line with International Standards on Auditing (ISA), as mandated by the Companies Regulations (Auditors) Rules 2023. There was also a lack of due skill, care, and diligence in executing the audit.
As a result, the RA imposed a penalty of $65,000 on PKF and $35,000 on its registered audit principal. The RA found notable shortcomings in the assessment of fraud risks, failure to obtain adequate audit evidence, insufficient audit documentation, and a lack of evidence of the audit principal's involvement in the audit process.
The RA emphasized that due skill, care, and diligence are critical principles expected from ADGM registered auditors and audit principals. The agency reiterated its dedication to upholding high standards of audit quality and corporate reporting within ADGM and warned that non-compliance with regulatory standards will lead to enforcement actions.