Abu Dhabi, UAE — The Registration Authority (RA) of Abu Dhabi Global Market (ADGM) has fined ADGM-registered audit firm, KPMG Lower Gulf Limited (KPMG), $30,000 for ineffective systems and controls leading to non-compliance with audit requirements under RA-administered legislation.
ADGM audit regulatory framework requires audit reports to be issued and signed by ADGM Registered Audit Principals on behalf of an ADGM Registered Auditor, WAM reported.
The RA found that KPMG demonstrated a systemic failure to ensure that only its ADGM Registered Audit Principals sign audit reports for ADGM entities in compliance with the RA’s requirements.
Prior to imposing the penalty, the RA had engaged in ongoing communication with KPMG over a period of several months regarding concerns over non-ADGM Registered Audit Principals signing audit reports for ADGM entities.
Further, the RA made directions to KPMG to prevent further occurrences by enhancing its systems and controls. However, after confirming to the RA that systems and controls had been strengthened the breach of non-ADGM Registered Audit Principal signing audit reports re-occurred, the report said.
The Registration Authority, Monitoring & Enforcement Division said, “The RA will take a robust and proportionate stance where Registered Auditors or Registered Audit Principals breach their obligations. ADGM audit firms must implement effective audit systems, controls and procedures that meet the requirements of ADGM’s internationally aligned audit regulatory framework.”