The Registration Authority of Abu Dhabi Global Market (ADGM) on 9 October 2026 imposed USD 100,000 in financial penalties on PKF Accountants and Business Advisers LLP and its registered audit principal, Ms Saranga Omprakash Lalwani, for failings in an audit of an ADGM-registered entity. USD 65,000 on the firm, USD 35,000 on the principal — following an on-site inspection of audit quality.
What happened
The Registration Authority (RA) of ADGM — the regulator responsible for the corporate registry and the audit profession of the Abu Dhabi international financial centre — issued a press release and Decision Notices against PKF Accountants and Business Advisers LLP, an ADGM-registered audit firm, and its registered audit principal, Ms Saranga Omprakash Lalwani.
The ground for the action was an on-site inspection conducted by the RA to assess PKF's compliance with ADGM Auditors Rules and the quality of its audit work. During that inspection, the RA identified significant deficiencies in an audit conducted by PKF and Ms Lalwani for an ADGM-registered entity.
What exactly went wrong
From the Registration Authority press release and corroborating coverage by The National, the deficiencies identified were:
- Non-compliance with ISA — the audit and the audit report were not prepared in accordance with International Standards on Auditing as required by the Companies Regulations (Auditors) Rules 2023.
- Breach of the "due skill, care and diligence" duty — one of the core principles expected of ADGM registered auditors and audit principals.
- Weak assessment of fraud risks — including the improper rebuttal of a mandatory fraud risk, the "management override of controls" risk, which cannot be rebutted under ISA.
- Failure to obtain sufficient and appropriate audit evidence on key audit items.
- Inadequate audit documentation — working papers did not capture decisions to the standard required.
- Insufficient evidence of the audit principal's involvement in the audit process, including planning and execution oversight.
Penalties were split as follows: USD 65,000 on PKF and USD 35,000 personally on Ms Lalwani. Decision Notices with the full description of contraventions are published on adgm.com together with the press release.
Direct quote from the Registration Authority: "The Registration Authority confirms its commitment to maintaining high standards of audit quality and corporate reporting within ADGM. Registered Auditors and Registered Audit Principals are expected to conduct audits in accordance with applicable professional standards and exercise appropriate skill, care and diligence. This action reinforces the importance of robust audit practices and demonstrates that failures to meet regulatory requirements will result in appropriate enforcement action."
Why this matters for ADGM-based businesses
ADGM is one of the UAE's key jurisdictions for holding, financial and asset management structures. Every ADGM-registered company must undergo an annual statutory audit by an RA-licensed firm. The PKF enforcement is not the first and will not be the last in this line: the regulator has publicly set audit quality as a priority area in its Regulatory Priorities for 2026–2027.
Zoom out and the picture is consistent: UAE regulators (ADGM RA, DFSA in DIFC, the Central Bank, the FTA) are steadily raising the compliance bar for professional intermediaries. In October 2026 the Dubai Financial Services Authority imposed a Dh401,000 (USD 109,200) fine on wealth management firm Vault Wealth for unauthorised transactions. Two separate regulators and two separate jurisdictions (ADGM and DIFC), but the direction is the same — the UAE 2026 regulatory environment is tightening through concrete enforcement cases, not just new rulebooks.
A short checklist to run against your auditor
Five questions business owners and finance directors of ADGM-registered companies should ask their auditor before the next annual cycle:
- Who is your audit principal, personally, and how is their involvement documented. In ADGM responsibility is personal — the fine on Ms Lalwani (USD 35,000) accounted for 35% of the total penalty.
- Has your firm been subject to an RA on-site inspection in the last 2–3 years, and what was the outcome. Decision Notices are public and can be cross-checked on adgm.com.
- How are mandatory fraud risks documented — in particular management override of controls, which ISA says cannot be rebutted. This is the exact point on which PKF failed.
- How is audit evidence obtained for key items: revenue, inventory, debt, provisions. If the honest answer is "we trust the client", that is a red flag.
- How are working papers maintained — such that any independent reviewer could reproduce the conclusions. That is precisely what an on-site inspection tests.
If you are still choosing a jurisdiction for a future holding or operating company and weighing financial centres against mainland free zones, our overview of DMCC, IFZA, Meydan, DIFC and ADGM walks through the respective audit and regulatory expectations.
What happens next
PKF Accountants and Business Advisers LLP continues to operate as an ADGM-registered audit firm — the penalty does not automatically trigger licence withdrawal. Ms Lalwani remains a registered audit principal. The Decision Notices on both set out the specific contraventions and the penalties paid. Clients of the firm have fair grounds to request a remediation plan following the inspection and to table it with their board or shareholders as part of a revised audit policy.
For the market as a whole, the signal from the Registration Authority is clear: the ADGM Auditors Rules 2023 are not a declarative document. Inspections are real, penalties are applied, personal liability works. The regulator has also explicitly flagged audit quality as a 2026–2027 priority — the PKF case is unlikely to be the last.
Where to find the primary source
The press release and Decision Notices are available on adgm.com — the Registration Authority announcements page. Secondary coverage: The National (9 October 2026). The Regulatory Priorities for 2026–2027 are also published in the Media Announcements section of adgm.com.
This material is based on the ADGM Registration Authority press release of 9 October 2026 and corroborating coverage by The National. It is an editorial piece by Garant.consulting; it is not legal or audit advice. For questions on audit, corporate reporting and compliance with the ADGM Auditors Rules — please consult your UAE compliance adviser.
