09 Oct 2026 Read more
AI Analysis
On 9 October 2026, ADGM's Registration Authority imposed total financial penalties of USD 100,000 on PKF Accountants and Business Advisers LLP and its registered audit principal, Saranga Omprakash Lalwani, following an on-site inspection. The action concerned failures to comply with the Companies Regulations (Auditors) Rules 2023 and International Standards on Auditing, including inadequate fraud-risk assessment, insufficient audit evidence, deficient documentation and inadequate evidence of the principal's involvement.
Key dates
- 2026-10-09
- ADGM's Registration Authority published the enforcement action and announced total penalties of USD 100,000 against PKF and its registered audit principal.
Suggested considerations
- Compliance teams at ADGM-registered audit firms should consider performing a documented review of current audit files against the applicable ISA requirements, with particular attention to fraud-risk assessment, audit evidence, audit documentation and the basis for audit conclusions.
- Registered audit principals should consider ensuring that their involvement, review work, judgments and approval of audit reports are clearly evidenced in the engagement file rather than relying on undocumented supervision.
- Audit firms should consider reviewing engagement acceptance, staffing, supervision, consultation, quality-control and file-completion processes to determine whether they support the required standard of due skill, care and diligence.
- Firms should consider conducting a targeted look-back across comparable ADGM engagements and retaining evidence of any remediation, especially where the same audit principal, methodology or documentation weaknesses may recur.
- ADGM entities and their boards or audit committees should consider confirming that their appointed auditor is appropriately registered and that significant audit judgments, fraud-risk procedures and evidence supporting the audit opinion are adequately documented.
- Senior management and professional-indemnity stakeholders should consider the possibility of separate financial and reputational consequences for the audit firm and the responsible registered audit principal.
What changed
This publication does not introduce a new rule or compliance deadline; it applies existing requirements under the Companies Regulations (Auditors) Rules 2023 to a specific audit engagement. The RA imposed USD 65,000 on PKF and USD 35,000 on its registered audit principal, demonstrating that enforcement exposure can attach separately to both the audit firm and the responsible individual. The enforcement action reinforces that ADGM registered auditors and registered audit principals must conduct audits and prepare audit reports in accordance with applicable ISA requirements and exercise due skill, care and diligence. Independent industry reporting presents the action as a broader supervisory signal on audit quality, evidential support, documentation and individual accountability rather than
Compliance impact
The action indicates meaningful enforcement risk for failures in core audit execution and documentation, even where the identified deficiencies relate to a single engagement. Under the Auditors Rules 2023, the RA may take enforcement measures against registered auditors and registered audit principals, and this case demonstrates that monetary penalties may be imposed on both the firm and the indiv
Who is affected
Related regulations
References
AI-generated analysis. May contain errors or omissions — verify with the original ADGM source before acting. Full disclaimer.
What the ADGM said
09 Oct 2026 Read more
Published by ADGM . Read the full notice at the source for the authoritative text.