New audit regulation in Abu Dhabi leads the way to change

 The new regulation stipulates a four year audit rotation for ADAA regulated clients

The notion of transparency and rotation has been a long standing debate in relation to the audit market both within the UAE and globally. More recently, there have been developments in relation to this in the EU with the recent audit reforms which were introduced to promote transparency and fairness. This debate led way to many other emerging economies that begun to embrace the notion of the need for such reforms especially in countries where commercial decisions are predominately relationship focused.

In many economies having audited financial statements is a mandatory requirement. The auditor is required to be independent from the management team and board to ensure they remain equitable and can provide a precise, compromised and comprehensive view of the company’s financial position. Over time a working relationship is established in which some cases can translate further. These relationships can transpire beyond 30 years especially within a family owned business where the relationship is passed from one generation to the next, equally the same could be said for a corporation where the audit relationship has been established for years and therefore, change isn’t seen as necessary... read more

In this regulation Abu Dhabi Accountability Authority (ADAA) has declared  that it is necessary for any company regulated by ADAA to change their auditors after each four years. This variation has been taken to additional promote transparency and answerability within the UAE auditing companies.