Abu Dhabi Global Market’s Registration Authority (RA) has levied a $30,000 fine against KPMG Lower Gulf Limited for substantial audit shortcomings. The penalty comes after a detailed review which found that KPMG had been consistently failing to adhere to the RA’s audit regulations. Specifically, the firm was cited for failing to ensure that only ADGM Registered Audit Principals signed off on audit reports for ADGM entities, a critical requirement under RA-administered rules.
Before the imposition of the fine, the RA had been in extended dialogue with KPMG over the course of several months. The communications focused on issues regarding non-ADGM Registered Audit Principals inappropriately signing audit reports for ADGM companies. Although KPMG assured the RA that it had enhanced its internal systems and controls to prevent further breaches, subsequent verification revealed that the issue had recurred, warranting the financial penalty.
Emphasizing its commitment to upholding high audit quality standards, the RA stresses the necessity for audit firms to maintain robust governance structures. These structures should include systems and controls designed to ensure full compliance with RA’s regulations, promptly identifying and rectifying any deviations. The RA expects that any remedial actions taken by Registered Auditors are effectively implemented and regularly monitored for their efficacy.
A statement from the Registration Authority’s Monitoring & Enforcement Division noted that the agency would not hesitate to adopt a firm and balanced approach to enforcement. The RA aims to ensure that ADGM’s audit firms align their practices with the area’s internationally recognized audit regulatory framework. Such compliance is essential to guaranteeing the quality of audits and bolstering public trust in corporate financial reporting, the statement emphasized.