ADGM imposes USD 88,000 penalties on MCA Auditors for audit failures

The Registration Authority (RA) of ADGM has taken enforcement action against MCA Auditors and Advisors LLP and its Audit Principal by imposing financial penalties totalling USD 88,000 for audit failures. The penalties comprised USD 52,000 on MCA Auditors and USD 36,000 on the Audit Principal. The RA's findings included deficiencies 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. In determining the penalties, the RA considered the firm's cooperation, acknowledgement of findings, root-cause analysis and remediation plan. The RA stated that registered auditors and audit principals remain responsible for the quality of audits for which they are appointed.