ADGM’s enhanced framework governing auditors comes into effect

ADGM’s enhanced framework governing auditors comes into effect

ABU DHABI, 20th December, 2021 (WAM) -- Abu Dhabi Global Market (ADGM) has announced its enhanced framework governing auditors, ‘ADGM Auditors’ Framework’, has fully come into effect as of 1st December 2021.

This follows the approval by ADGM’s Board of Directors which was granted in August this year. The framework is administered by the ADGM Registration Authority (RA).

ADGM enhanced the ADGM Auditors’ Framework for a variety of reasons that include ensuring international equivalence on audit oversight, promoting high quality audits and investor protection, all of which will facilitate continued robust business confidence in ADGM and the entities that operate within.

Key changes in the ADGM Auditors’ Framework include "Robust registration criteria" all auditors and audit principals will have to meet the criterion before they are granted registration. The robust criteria include auditors demonstrating their competence, compliance with international professional and ethical standards, as well as having adequate and appropriate professional indemnity insurance cover.

The framework also includes "Additional permits" ADGM auditors and audit principals who wish to accept audit engagements of public companies and financial institutions will have to obtain the relevant additional permit from the Registration Authority (RA) at ADGM. Additional permits will be granted to those who meet the eligibility criteria and requirements.

It also includes "Improved oversight powers", the RA will be responsible for monitoring and supervising auditors and audit quality in ADGM. The RA will adopt a risk-based approach to its on-site and desktop assessments and annually publish a report on its operational activities.

ADGM Auditors’ Framework offers transition arrangements to existing recognised auditors. The transition period allows existing ADGM auditors and audit principals to re-register under the new framework from 1st December until the auditor’s existing renewal date.

Existing auditors and audit principals are encouraged to re-register early and leave sufficient time for the registration process. The RA’s’ robust registration process for both existing and prospective auditors is likely to take at least four weeks from application to registration. Applicants are reminded to factor this in their plan to ensure there is no gap in the audit services offered to clients.

Dhaher bin Dhaher Al Mheiri, CEO of the ADGM RA, commented, "ADGM’s enhanced Auditors’ Framework further strengthens ADGM’s position as a robust and sustainable jurisdiction that places importance on investor protection and instilling strong business confidence. High quality audited financial statements are essential to the integrity of financial markets and the financial ecosystem. Auditors play a key part in ensuring financial reporting is reliable which in turn allows investors to make informed decisions. The new Framework will help promote business growth, protect stakeholders, and the reputation of ADGM."