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DFSA sets out auditor rules for consultation

DUBAI — Dubai International Financial Centre (DIFC) auditors will soon be subject to greater scrutiny by the Dubai Financial Services Authority (DFSA).

The DFSA has issued, for public consultation, rules designed to enhance the quality of audit services in the DIFC. The rules apply to auditors who audit authorised firms, authorised market institutions, and collective investment funds domiciled in the DIFC.

The new rules, available on the DFSA website, prescribe the standards that apply to auditors at the time of application and on an ongoing basis.

The DFSA considers that the current requirements applicable to auditors need to be enhanced to reflect both the DFSA's risk based approach to regulation and international standards applicable to the registration, and supervision of auditors. Historically, the monitoring of audit performance has largely relied upon a system of peer group review. This regime of self-regulation came under intense scrutiny following a series of major corporate failures in the early part of this decade.

David Knott, DFSA CEO said: "The new rules are an important component in enhancing the standard of audit and auditor supervision in the DIFC, and prescribe a regime that is the equivalent of that in the world's major capital markets.

The key features of the proposals establish international benchmarks against which auditors will be assessed upon registration and on an ongoing basis. The assessment will include a review of the auditor's systems, policies, procedures and controls to ensure compliance with:

International Standards on Auditing and Quality Control issued by the International Auditing and Assurance Standards Board (IAASB) of IFAC;

Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants (IESBA) of IFAC, and

Where applicable:

Islamic Accounting and Auditing Standards issued by the Accounting and Auditing Organisation of Islamic Financial Institutions (AAOIFI)

Code of Ethics for Accountants and Audit Firms of Islamic Financial Institutions issued by the Accounting and Auditing Organisation of Islamic Financial Institutions from time to time (AAOIFI).