Baker Tilly Middle East Fined $50,000 by ADGM for ‘Serious Failings’ in Two Audits

Dubai: Baker Tilly Middle East, an audit firm, has been issued with a fine of 50,000 dollars by the Registration Authority of Abu Dhabi Global Market. The fine was imposed due to “serious failings and gaps” in their work for two ADGM companies. Alongside Baker Tilly Middle East, Neil Sturgeon, the registered audit principal, has also faced penalties and will be required to pay 12,000 dollars. 

The Registration Authority of ADGM has found that the activities conducted by Baker Tilly Middle East led to a failure to comply with the specified “relevant” obligations. These specific obligations mandate ADGM-licensed auditors to perform audits and prepare audit reports in accordance with applicable regulations, relevant professional standards, as well as the International Standards on Auditing. 

In an inspection, the Registration Authority discovered ‘significant failures’ in complying with the ISA requirements during the 2 audits conducted by Baker Tilly Middle East and Sturgeon. Furthermore, violations were identified at different stages of the auditing procedure, spanning from the planning and execution phases to completion and reporting.

No laxity allowed 

“A robust audit is crucial for strengthening confidence in financial reporting, enabling investors, shareholders, and additional stakeholders to trust financial statements for making well-informed decisions,” as per the statement. “The RA anticipates that its registered auditors and audit principals will uphold a commitment to conducting every audit task diligently, effectively, and in compliance with pertinent technical as well as professional standards.” 

One of the primary regulatory objectives of the Registration Authority is to foster top-quality audits, as they are a critical component of a robust financial and business ecosystem. Top-quality audits play a direct role in upholding market integrity, safeguarding investor interests, and promoting businesses with assurance. 

“Implementing a strong audit framework and monitoring initiative is essential to prevent auditors from failing to meet expected standards and to enhance the dependability of financial reporting. The Regulatory Authority (RA) will leverage a comprehensive set of regulatory instruments, ranging from outreach to enforcement as needed, to uphold elevated standards of audit quality.”