• Chapter 2 Chapter 2 Individuals And Firms

    • 1032. Eligibility For Appointment As An Auditor

      (1) A firm is eligible for appointment as an auditor if the firm–
      (a) is recognised for the purposes of this section by the Registrar, and
      (b) is a member of a recognised professional body and satisfies any additional requirements prescribed by rules made by the Board for the purposes of this section.
      (2) In this Part a “recognised professional body” means a body which offers a professional qualification in accountancy and is recognised and approved pursuant to rules made by the Board.

    • 1032A. Registration Of Auditors And Audit Principals

      (1) The Registrar may make rules which require or allow:
      (a) the registration of auditors and certain individuals who are appointed by an auditor with responsibility for managing the conduct or provision of audit services by the auditor or for signing on behalf of the auditor audit or other reports or any other matters as may be provided for in such rules ("audit principals");
      (b) an auditor or an audit principal to apply to the Registrar for the issue to it of a registration or permit to act as a registered auditor or registered audit principal for such categories of company, entity or body carrying on such business or activities as may be prescribed by the Registrar in such rules or in such registration or permit;
      (c) auditors and audit principals whose names are entered on the register to comply with or satisfy such conditions or requirements as may be prescribed in or pursuant to such rules or any such registration or permit as may be issued to them as mentioned in (b) above;
      (d) the Registrar to exercise such powers and rights with respect to the regulation of such auditors and audit principals as the Registrar may consider appropriate, including powers to impose sanctions, whether by way of fine, censure or otherwise, on any auditor or audit principal who contravenes any requirement applicable to it or him pursuant to such rules and, in such circumstances as such rules may prescribe, to suspend or withdraw any registration of, or the issue of any registration or permit to, an auditor or audit principal pursuant to such rules; and
      (e) the Registrar from time to time to amend, revise, withdraw or supplement any rules so made by him as he may consider appropriate or desirable for the purposes of such rules.
      (2) The Registrar may, on the application of a person to whom Part 35 applies, direct by notice in writing to that person, that any of the rules made by the Registrar pursuant to section 1032A:
      (a) are not to apply to that person, as specified in a direction notice from the Registrar; or
      (b) are to apply to that person with modifications, specified in a direction notice from the Registrar.
      (3) The Registrar may only exercise the direction power in subsection (2) where, in the reasonable discretion of the Registrar, public policy grounds exist.
      (4) The Registrar may request from an applicant under subsection (2) any information it reasonably requires to exercise the Registrar’s discretion.

    • 1032B. Registration Of Auditors And Commercial Licences

      The registration of an auditor as a registered auditor by the Registrar shall be deemed to be a "licensed person" with respect to all controlled activities relating to audit services, for the purposes of the Commercial Licensing Regulations 2015. For the avoidance of doubt, these Regulations, and not the Commercial Licensing Regulations 2015, shall apply with respect to all licensing matters for registered auditors."

    • 1033. Effect Of Ineligibility

      (1) No person may act as an auditor of an audited person if he is ineligible for appointment as an auditor.
      (2) If at any time during his term of office an auditor becomes ineligible for appointment as an auditor, he must immediately–
      (a) resign his office (with immediate effect), and
      (b) give notice in writing to the audited person that he has resigned by reason of his
      becoming ineligible for appointment.
      (3) A person will commit a contravention of these Regulations if–
      (a) he acts as an auditor in contravention of subsection (1), or
      (b) he fails to give the notice mentioned in paragraph (b) of subsection (2) in accordance with that subsection.
      (4) A person who commits the contravention referred to in subsection (3) shall be liable to up to a level 6 fine.
      (5) In proceedings against a person for any contravention under this section it is a defence for him to show that he did not know and had no reason to believe that he was, or had become, ineligible for appointment as an auditor.

    • 1034. Independence Requirement

      (1) A person may not act as an auditor of an audited person if one (1) or more of subsections (2), (3) and (4) apply to him.
      (2) This subsection applies if any individual responsible for audit work is–
      (a) an officer or employee of the audited person, or
      (b) a partner or employee of such a person, or a partnership of which such a person is a partner.
      (3) This subsection applies if any individual responsible for audit work is–
      (a) an officer or employee of an associated undertaking of the audited person, or
      (b) a partner or employee of such a person, or a partnership of which such a person is a partner.
      (4) This subsection applies if there exists, between–
      (a) the person or an associate of his, and
      (b) the audited person or an associated undertaking of the audited person,
      a connection of any such description as may be specified by rules made by the Board.
      (5) An auditor of an audited person is not to be regarded as an officer or employee of the person for the purposes of subsections (2) and (3).
      (6) In this section “associated undertaking”, in relation to an audited person, means–
      (a) a parent undertaking or subsidiary undertaking of the audited person, or
      (b) a subsidiary undertaking of a parent undertaking of the audited person.

    • 1035. Effect Of Lack Of Independence

      (1) If at any time during his term of office an auditor becomes prohibited from acting by section 1034(1), he must immediately–
      (a) resign his office (with immediate effect), and
      (b) give notice in writing to the audited person that he has resigned by reason of his lack of independence.
      (2) A person will commit a contravention of these Regulations if –
      (a) he acts as an auditor in contravention of section 1034(1), or
      (b) he fails to give the notice mentioned in paragraph (b) of subsection (1) in accordance with that subsection.
      (3) A person who commits the contravention referred to in subsection (2)(a) shall be liable to up to a level 4 fine.
      (4) A person who commits the contravention referred to in subsection (2)(b) shall be liable to a level 3 fine.
      (5) In proceedings against a person for any contravention under this section it is a defence for him to show that he did not know and had no reason to believe that he was, or had become, prohibited from acting as auditor of the audited person by section 1034(1).

    • 1036. Effect Of Appointment Of A Partnership

      (1) This section applies where a partnership constituted under the laws of–
      (a) the Abu Dhabi Global Market, or
      (b) any other country or territory in which a partnership is not a legal person,
      is by virtue of this Chapter appointed as auditor of an audited person.
      (2) Unless a contrary intention appears, the appointment is an appointment of the partnership as such and not of the partners.
      (3) Where the partnership ceases, the appointment is to be treated as extending to–
      (a) any appropriate partnership which succeeds to the practice of that partnership, or
      (b) any other appropriate person who succeeds to that practice having previously carried it on in partnership.
      (4) For the purposes of subsection (3)–
      (a) a partnership is to be regarded as succeeding to the practice of another partnership only if the members of the successor partnership are substantially the same as those of the former partnership, and
      (b) a partnership or other person is to be regarded as succeeding to the practice of a partnership only if it or he succeeds to the whole or substantially the whole of the business of the former partnership.
      (5) Where the partnership ceases and the appointment is not treated under subsection (3) as extending to any partnership or other person, the appointment may with the consent of the audited person be treated as extending to an appropriate partnership, or other appropriate person, who succeeds to–
      (a) the business of the former partnership, or
      (b) such part of it as is agreed by the audited person is to be treated as comprising the appointment.
      (6) For the purposes of this section, a partnership or other person is “appropriate” if it or he–
      (a) is eligible for appointment as an auditor by virtue of this Chapter, and
      (b) is not prohibited by section 1034(1) from acting as auditor of the audited person.

    • 1037. Matters To Be Notified To The Registrar

      (1) The Registrar may require a recognised professional body–
      (a) to notify it immediately of the occurrence of such events as it may specify in writing and to give it such information in respect of those events as is so specified,
      (b) to give him, at such times or in respect of such periods as he may specify in writing, such information as is so specified.
      (2) The notices and information required to be given must be such as the Registrar may reasonably require for the exercise of its functions under these Regulations.
      (3) The Registrar may require information given under this section to be given in a specified form or verified in a specified manner.
      (4) Any notice or information required to be given under this section must be given in writing unless the Registrar specifies or approves some other manner.

    • 1038. The Registrar’s Power To Call For Information

      (1) The Registrar may by notice in writing require any person eligible for appointment as an auditor by virtue of this Chapter to give him such information as he may reasonably require for the exercise of his functions under this Part.
      (2) The Registrar may require that any information which he requires under this section is to be given within such reasonable time and verified in such manner as he may specify.