The ADGM's Registration Authority also imposed a fine on Neil Sturgeon, a registered audit principal with Baker Tilly Middle East. Image Credit: Shutterstock

Dubai: The audit firm Baker Tilly Middle East has been hit with a $50,000 fine from Abu Dhabi Global Market's Registration Authority for 'serious failings and gaps' in the work it did for two ADGM companies.

Also penalised is Neil Sturgeon, Baker Tilly’s registered audit principal, who will need to pay $12,500.

The ADGM's Registration Authority noted that the work done led to non-compliance with its 'relevant' requirements. These require ADGM-licensed auditors to 'conduct audits and prepare audit reports in accordance with relevant professional standards, applicable regulations and the International Standards on Auditing'.

During an inspection, the Registration Authority found 'significant failures' when it came to adhering to the ISA requirements in the two audits carried out by Baker Tilly and Sturgeon. The breaches were identified in 'multiple areas of the audit process, from planning and execution to completion and reporting'.

The breaches were identified in 'multiple areas of the audit process, from planning and execution to completion and reporting'

- ADGM's Registration Authority on the Baker Tilly Middle East fines

No laxity allowed

"High-quality audit is vital for reinforcing trust in financial reporting which allows shareholders, investors, and other stakeholders to rely on financial statements to make informed decisions," said a statement. "The RA expects its registered auditors and audit principals to ensure that all audit work carried out by them is performed diligently, competently and in accordance with all relevant technical and professional standards.|

“One of the RA’s key regulatory objectives is to promote high-quality audit, which is an essential element of a strong financial and business ecosystem. High-quality audits directly contribute to the integrity of markets, provide investor protection and enable the promotion of businesses with confidence.

"A robust audit regime and monitoring program help ensure auditors do not fall short of the standards expected from them while also increasing the reliability of financial reporting. The RA will use all regulatory tools at its disposal from outreach to enforcement, as appropriate, to promote high standards of audit quality."