ADGM Fines PKF and Audit Principal $100,000 Over Audit Deficiencies

The Registration Authority (RA) of Abu Dhabi Global Market (ADGM) has taken enforcement action against PKF Accountants and Business Advisers LLP and its registered audit principal, Saranga Omprakash Lalwani, imposing financial penalties totalling $100,000.

According to regulatory notices, the enforcement decision followed an on-site inspection conducted by the RA to assess PKF's compliance with ADGM Auditors Rules and evaluate the overall quality of its audit work. The inspection identified significant deficiencies in an audit carried out for an ADGM-registered entity.

Under the sanctions, the RA levied a penalty of $65,000 against PKF and a separate penalty of $35,000 against Lalwani. The authority determined that the audit failed to comply with International Standards on Auditing (ISA) as mandated under ADGM's Companies Regulations (Auditors) Rules 2023.

Specific failings cited by the regulator included improper rebuttal of the mandatory fraud risk concerning management override of controls, deficient fraud risk evaluation, and failure to obtain sufficient, appropriate audit evidence. The inspection also identified inadequate audit documentation and insufficient proof of the audit principal's involvement in the engagement.