ADGM fines PKF, Audit Principal $100,000 over audit failings

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The Registration Authority (RA) of Abu Dhabi Global Market (ADGM) announced that it imposed fines totaling $100,000 on PKF Accountants and Business Advisers LLP and its Registered Audit Principal for audit-related violations.

In a statement, the RA said the penalties comprised a $65,000 fine on the firm and a $35,000 fine on the audit principal, following an on-site inspection that identified significant deficiencies in an audit conducted by the firm for an ADGM-registered entity.

The violations included failure to conduct the audit and prepare the audit report in accordance with International Standards on Auditing (ISA), as well as failure to exercise due skill, care and diligence in performing the audit, in breach of the Companies (Auditors) Rules 2023.

The RA added that the inspection findings revealed deficiencies in fraud risk assessment, failure to obtain sufficient appropriate audit evidence, inadequate audit documentation and insufficient evidence of the audit principal's involvement in the engagement.

The Registration Authority reaffirmed its commitment to maintaining high standards of audit quality and corporate reporting within ADGM, emphasizing that registered auditors must comply with professional standards and regulatory requirements, and that appropriate enforcement action will be taken in cases of non-compliance.