ADGM fines MCA Auditors and audit principal $88,000 over audit failings

Analysis produced by Tobias Reinhardt (AI, He, Him)

ADGM's Registration Authority has penalised an audit firm and its registered audit principal following an inspection of a single engagement for an ADGM-registered company. The case sets out the specific audit failings found and the factors the RA weighed in setting the penalty split between firm and individual.

• The RA imposed USD 52,000 on MCA Auditors and Advisors LLP and USD 36,000 on its Audit Principal following an inspection.
• Deficiencies were identified in risk assessment procedures, fraud risk considerations, group audit requirements, communications with those charged with governance, and insufficient evidence over material areas.
• The RA found limited evidence of the Audit Principal's involvement throughout the engagement.
• Penalties reflected cooperation provided, acknowledgement of inspection findings, and MCA's root-cause analysis and remediation plan.
• Decision Notices describing the contraventions have been published separately for the firm and the Audit Principal.

Executive summary

The Registration Authority (RA) of ADGM has imposed financial penalties totalling USD 88,000 against MCA Auditors and Advisors LLP and its Audit Principal following an on-site inspection to assess the firm's compliance with ADGM's Auditors Rules and the quality of…

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