Abu Dhabi Global Market’s (ADGM) Registration Authority has imposed $100,000 in financial penalties on PKF Accountants and Business Advisers LLP and one of its registered audit principals following an on-site inspection that uncovered material deficiencies in an audit of an ADGM-registered entity.
PKF was fined $65,000 and the principal, Ms Saranga Omprakash Lalwani, was fined $35,000. The RA said both failed to conduct the audit in accordance with International Standards on Auditing as required under the Companies Regulations (Auditors) Rules 2023, and did not exercise due skill, care, and diligence in carrying out the work.
The specific failings identified included inadequate assessment of fraud risks, insufficient audit evidence, poor audit documentation, and a lack of evidence showing the audit principal’s active involvement in the process.
“The Registration Authority confirms its commitment to maintaining high standards of audit quality and corporate reporting within ADGM. Registered Auditors and Registered Audit Principals are expected to conduct audits in accordance with applicable professional standards and exercise appropriate skill, care and diligence. This action reinforces the importance of robust audit practices and demonstrates that failures to meet regulatory requirements will result in appropriate enforcement action,” RA of ADGM said in a statement.
The penalties signal that ADGM’s regulatory body is prepared to act against licensed professional services firms, not just financial institutions, when compliance standards fall short.
