Abu Dhabi:The Registration Authority (RA) of the Abu Dhabi Global Market (ADGM) has imposed financial penalties totaling USD 88,000 against MCA Auditors and Advisors LLP and its Audit Principal. This action was taken due to audit failures identified during an inspection conducted by the RA.
According to Wam, the enforcement action followed an on-site inspection by the RA to evaluate MCA Auditors' adherence to ADGM's Auditors Rules and the quality of its audit work. The inspection revealed deficiencies in an audit conducted for an ADGM-registered company by MCA Auditors.
The RA imposed a penalty of USD 52,000 on MCA Auditors and USD 36,000 on the Audit Principal. The findings highlighted deficiencies in several audit areas, including risk assessment procedures, fraud risk considerations, group audit requirements, communication with those charged with governance, and insufficient evidence over material areas. The RA noted limited evidence of the Audit Principal's involvement throughout the engagement.
In deciding the financial penalties, the RA considered the cooperation provided by MCA Auditors, their acknowledgment of the inspection findings, and their root-cause analysis and remediation plan. The RA emphasized the importance of Registered Auditors and Audit Principals in maintaining confidence in financial reporting accuracy and reliability in ADGM. The failings identified spanned multiple fundamental areas of the audit process. The RA reiterated its commitment to monitoring audit quality and taking appropriate action if standards are not met.
