The Capital Market Authority (CMA) has issued a regulatory warning to the audit firm PricewaterhouseCoopers (PwC) for certain deficiencies in its audit of a listed company wherein the financial statements previously audited by PwC had to be significantly restated after CMA’s inspection.
CMA said that PwC had failed to discharge its statutory obligations to the shareholders and other stakeholders with due care because of which the misstatements of the firm’s financials and other financial irregularities remained undetected by PwC during its tenure as the auditors of the company.
HE Abdullah Salim Al Salmi, the Executive President of CMA, said that “Legal and regulatory requirements make audit compulsory to ensure integrity of financial reporting. CMA treats auditors as the first line of defence and places reliance on them. The financial statements audited by the audit firms are trusted by the investors to make their investment decisions and used by lenders to grant loans.”
This necessitates that the audit firms must implement robust quality controls and internal review procedures so that the field work is adequately supervised. It is also very important that the field audit work should be led by qualified and experienced professionals who should be given sufficient time and resources to carry out the audits, he added.
The regulatory warning to PwC has been issued in terms of Auditors Accreditation Rules and CMA would conduct a review of the quality control procedures of the firm in due course after the corrective actions are completed.