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  • Auditor Module (AUD) [VER3/02-17]

    • Part 1 Introduction

      • AUD 1 Application and Definitions

        • AUD 1.1 Application and definitions

          • AUD 1.1.1

            This module (AUD) applies to every:

            (a) applicant for registration as a Registered AuditorG ;
            (b) AuditorG ;
            (c) individual applying for registration as an Audit PrincipalG ; and
            (d) Audit PrincipalG .
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

            • AUD 1.1.1 Guidance

              A Registered AuditorG will need to comply with all chapters in AUDG . An AuditorG which is not a Registered AuditorG will need to comply with chapters 5 and 6 in AUDG as those chapters apply to an Auditor whether or not it is registered with the DFSAG .

              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • AUD 1.1.2

            In these Rules, a Relevant PersonG means a:

            (a) Domestic FirmG ;
            (b) Public Listed CompanyG ; or
            (c) Domestic FundG .
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

    • Part 2 Registered Auditors and Audit Principals

      • AUD 2 Registration

        • AUD 2.1 Application

          • AUD 2.1.1

            This chapter applies to every:

            (a) applicant for registration as a Registered AuditorG ;
            (b) Registered AuditorG ;
            (c) individual applying for registration as an Audit PrincipalG ; and
            (d) Audit PrincipalG .
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 2.2 Registration of Registered Auditors

          • Application for registration

            • AUD 2.2.1

              An applicant for registration as a Registered AuditorG must complete and submit the appropriate form in AFN to the DFSAG , supported by such additional material as may be required by the DFSAG .

              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

              • AUD 2.2.1 Guidance

                1. A PersonG who may apply to be a Registered AuditorG includes a natural person.
                2. Applicants for registration as a Registered AuditorG are required to pay fees as prescribed in FER.
                Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Criteria for registration

            • AUD 2.2.2

              In assessing an application for registration, the DFSAG may:

              (a) make any enquiries which it considers appropriate, including enquiries independent of the applicant;
              (b) require the applicant to provide additional information;
              (c) require the applicant to provide information on how it intends to ensure compliance with a particular requirement in a Rule or the Regulatory LawG ;
              (d) require any information provided by the applicant to be verified in any way that the DFSAG specifies; and
              (e) take into account any information which it considers relevant.
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

            • AUD 2.2.3

              (1) An applicant for registration as a Registered AuditorG must be able to demonstrate to the DFSA'sG satisfaction that it:
              (a) is fit and proper;
              (b) has professional indemnity insurance as required under section 4.3;
              (c) has adequate systems, procedures and controls to ensure due compliance with:
              (i) the International Standards on AuditingG ;
              (ii) the International Standards on Quality ControlG ; and
              (iii) the Code of Ethics for Professional AccountantsG ;
              (d) has clear and comprehensive policies and procedures relating to compliance with all applicable legal requirements, including those in the Regulatory LawG , AUDG , AMLG and other relevant modules of the RulebookG , when providing audit services to a Domestic FirmG , Public Listed CompanyG or Domestic FundG ;
              (e) has adequate means to implement those policies and procedures and monitor that they are operating effectively and as intended;
              (f) is controlled by a majority of individuals who hold Recognised Professional Qualifications;
              (g) has identified at least one or more appropriate individuals, who will be appointed by it to undertake the responsibilities of an Audit PrincipalG ; and
              (h) has complied with any other requirement specified by the DFSAG .
              (2) For the purposes of (1)(f) "majority" means:
              (a) where under the Registered AuditorG 's constitution matters are decided on by the exercise of voting rights, a majority of the rights to vote on all, or substantially all, matters; or
              (b) in any other case a majority of the PersonsG having rights under the constitution of the Registered AuditorG to enable them to direct its overall policy or alter its constitution.
              (3) For the purposes of assessing whether an applicant for registration meets the fit and proper requirement under (1)(a), the DFSAG may consider:
              (a) the application and submissions;
              (b) its background and history;
              (c) its ownership and GroupG structure;
              (d) its resources, including human and technological;
              (e) whether the applicant's affairs are likely to be conducted and managed in a sound and prudent manner; and
              (f) any other matter considered relevant by the DFSAG .
              (4) The DFSAG will in assessing the matters in (1) and (3) consider the cumulative effect of factors which, if taken individually, may be regarded as insufficient to give reasonable cause to doubt the fitness and propriety of an applicant.
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

              • AUD 2.2.3 Guidance

                Under Article 98 of the Regulatory LawG , the DFSAG may grant or refuse to grant registration and impose restrictions and conditions upon the registration.

                Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 2.3 Continuing obligations of Registered Auditors

          • AUD 2.3.1

            To remain registered, a Registered AuditorG must comply on a continuing basis with:

            (a) the International Standards on AuditingG , International Standards on Quality ControlG and the Code of Ethics for Professional AccountantsG ;
            (b) the registration criteria in Rule 2.2.3(1); and
            (c) the Rules in chapter 6 regarding the conduct of audits and the preparation of audit reports.
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • AUD 2.3.2

            A Registered AuditorG must at all times have at least one individual appointed by it to undertake the responsibilities of an Audit PrincipalG .

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • AUD 2.3.3

            The DFSA may require a Registered AuditorG which has not recently conducted any audit work under its registration to provide other examples of audit work it has carried out in order to demonstrate to the DFSAG that it is still able to meet its continuing obligations.

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

            • AUD 2.3.3 Guidance

              The DFSAG may issue guidelines in the form of Practice Notes to assist Registered AuditorsG in applying the standards set out in Rule 2.3.1(a). These Practice NotesG will highlight new emerging or otherwise relevant circumstances to assist a Registered AuditorG in applying the relevant standard. Practice Notes will be published on the DFSAG website.

              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 2.4 Registration of Audit Principals

          • AUD 2.4 Guidance

            The general responsibilities of an Audit PrincipalG are defined in Article 97(c) of the Regulatory LawG .

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Application for registration

            • AUD 2.4.1

              When applying for registration as an Audit PrincipalG , both the relevant individual and the Registered AuditorG must complete and submit the appropriate form in AFN, supported by such additional materials as may be required by the DFSAG .

              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Criteria for registration

            • AUD 2.4.2

              An individual applying for registration as an Audit PrincipalG must be able to demonstrate to the DFSA'sG satisfaction that he:

              (a) holds a Recognised Professional Qualification;
              (b) is a member in good standing of a Recognised Professional BodyG ;
              (c) has at least 5 years of relevant post qualification audit experience in the past 7 years, including at least one year of experience in a managerial role supervising and finalising audits; and
              (d) is fit and proper to conduct audit work.
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 2.5 Continuing obligations of Audit Principals

          • AUD 2.5.1

            To remain registered, an Audit PrincipalG must comply on a continuing basis with:

            (a) the registration criteria in Rule 2.4.2; and
            (b) the PrinciplesG in section 2.6.
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 2.6 Principles for Audit Principals

          • AUD 2.6.1

            The five PrinciplesG set out in this section apply to every Audit PrincipalG .

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

            • AUD 2.6.1 Guidance

              1. These PrinciplesG are derived from the fundamental principles published in the Code of Ethics for Professional AccountantsG .
              2. If an Audit PrincipalG breaches a PrincipleG , the DFSAG may consider suspending or withdrawing the registration of the Audit PrincipalG on that basis.
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Principle 1 — Integrity

            • AUD 2.6.2

              An Audit PrincipalG must be straightforward and honest in all professional and business relationships.

              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Principle 2 — Objectivity

            • AUD 2.6.3

              An Audit PrincipalG must not allow bias, conflict of interest or the undue influence of others to override professional or business judgements.

              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Principle 3 — Professional competence and due care

            • AUD 2.6.4

              An Audit PrincipalG must maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional services based on current developments in practice, legislation and techniques and must act diligently and in accordance with applicable technical and professional standards.

              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Principle 4 — Confidentiality

            • AUD 2.6.5

              An Audit PrincipalG must respect the confidentiality of information acquired as a result of professional and business relationships and, therefore, not disclose any such information to third parties without proper and specific authority, unless there is a legal or professional right or duty to disclose, nor use the information for the personal advantage of the Audit PrincipalG or third parties.

              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Principle 5 — Relations with the DFSA

            • AUD 2.6.6

              An Audit PrincipalG must deal with the DFSAG in an open and co-operative manner and must promptly disclose to the DFSAG any information of which the DFSAG would reasonably expect to be notified.

              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 2.7 Transitional and Saving Provisions

          • AUD 2.7.1

            In this section:

            (a) "previous Law" means the Regulatory LawG as it was in force immediately before the commencement of the DIFC Laws Amendment Law No. 1 of 2014;
            (b) "current Law" means the provisions of the Regulatory LawG that came into force under the DIFC Laws Amendment Law No. 1 of 2014; and
            (c) "the commencement" means the commencement of the current LawG .
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • AUD 2.7.2

            A PersonG who immediately before the commencement was registered as an AuditorG by the DFSAG under the previous Law is deemed on the commencement to be registered as a Registered AuditorG under the current Law.

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • AUD 2.7.3

            A PersonG who immediately before the commencement was appointed as an Audit PrincipalG by a Registered AuditorG under the previous Law is deemed on the commencement to be registered as an Audit PrincipalG under the current Law.

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • AUD 2.7.4

            An Audit PrincipalG referred to in Rule 2.7.3 must submit the appropriate form in AFN (notification of intention to continue to undertake the responsibilities of an Audit PrincipalG for a Registered AuditorG ) within 60 days of the commencement.

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • AUD 2.7.5

            A Registered AuditorG and an Audit PrincipalG referred to in this section must continue to maintain any records which were required to be maintained under the previous Law for the period of time required under the previous Law.

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

      • AUD 3 Suspension and Withdrawal of Registration

        • AUD 3.1 Application

          • AUD 3.1.1

            This chapter applies to every:

            (a) Registered AuditorG ; and
            (b) Audit PrincipalG .
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 3.2 Suspension and withdrawal of registration of a Registered Auditor

          • AUD 3.2 Guidance

            1. Under Article 98A(1) of the Regulatory LawG the DFSAG may suspend or withdraw the registration of a Registered AuditorG or Audit PrincipalG on its own initiative or at the request of the Registered AuditorG or Audit PrincipalG .
            2. Article 98A(2) of the Regulatory LawG sets out the circumstances in which the DFSAG may suspend or withdraw the registration of a Registered AuditorG or Audit PrincipalG .
            3. Under Article 98A(5) of the Regulatory LawG , the DFSAG may temporarily suspend the registration of a Registered AuditorG or Audit PrincipalG pending completion of an investigation against the AuditorG or Audit PrincipalG . The DFSAG may only exercise this power where, arising from the investigation, it reasonably believes that the PersonG has engaged in serious misconduct that may form grounds for withdrawal of the Person'sG registration. This might be, for example, where there is evidence of fraud, theft or other dishonest conduct or a risk to Client AssetsG . As the investigation is ongoing, the DFSAG would ordinarily expect not to publicise a temporary suspension under this power. But the DFSAG retains discretion to publicise such a suspension in an individual case if it is appropriate to do so given the particular circumstances.
            4. Under Article 98A(7) of the Regulatory LawG , a Registered AuditorG or Audit PrincipalG may refer a decision of the DFSAG to suspend or withdraw its registration to the FMTG . The DFSAG decision to suspend or withdraw registration remains in force until the review is concluded and the FMTG makes a further order, unless the FMTG has made an interim order to stay the decision.
            5. Under Article 98A(3) of the Regulatory LawG the DFSAG may make Rules containing requirements a Registered AuditorG or Audit PrincipalG must meet before the DFSAG will grant a request by the Registered AuditorG or Audit PrincipalG to withdraw registration.
            6. An application by a Registered AuditorG or Audit PrincipalG to withdraw their registration does not in itself result in a withdrawal of the registration. Until the DFSAG withdraws the registration, the Registered AuditorG or Audit PrincipalG remains subject to, and must comply with, the Regulatory LawG , Rules and any other relevant legislation administered by the DFSAG .
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Suspension or withdrawal of registration on the DFSA's initiative

            • AUD 3.2.1

              A Registered AuditorG that has had its registration suspended by the DFSAG , must not:

              (a) accept any new audit client who is a Relevant PersonG ;
              (b) agree to being re-appointed by an existing audit client who is a Relevant PersonG ; or
              (c) issue an audit report relating to a Relevant PersonG without the prior written consent of the DFSAG .
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

            • AUD 3.2.2

              If the DFSAG suspends the registration of a Registered AuditorG , it may impose such:

              (a) conditions on the Registered AuditorG as it sees fit during the period of the suspension; and
              (b) requirements on the procedure for lifting the suspension as it considers appropriate.
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Requirements for withdrawal of registration at the request of the Registered Auditor

            • AUD 3.2.3

              (1) A request for withdrawal of registration by a Registered AuditorG must be made by completing and submitting the appropriate form in AFN.
              (2) Before granting a request for withdrawal the DFSAG must first be satisfied that:
              (a) the Registered AuditorG has made appropriate arrangements with respect to its existing audit clients who are Relevant PersonsG ; and
              (b) any other matter which the DFSAG would reasonably expect to be resolved has been resolved.
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

            • AUD 3.2.4

              Once a Registered AuditorG has filed a request to withdraw its registration, it must not accept any appointment or re-appointment as a Registered AuditorG or issue any audit reports in relation to a Relevant PersonG without obtaining the prior written consent of the DFSAG .

              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 3.3 Suspension or withdrawal of an Audit Principal

          • Suspension or withdrawal of registration on the DFSA's initiative

            • AUD 3.3.1

              An Audit PrincipalG that has had his registration suspended by the DFSAG must not in respect of a Relevant PersonG :

              (a) manage the conduct of any audit work undertaken by a Registered AuditorG ; or
              (b) sign any audit report, or other report required by the DFSAG , on behalf of the Registered AuditorG .
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

            • AUD 3.3.2

              If the DFSAG suspends the registration of an Audit PrincipalG , it may impose such:

              (a) conditions on the Audit PrincipalG and Registered AuditorG as it sees fit during the period of the suspension; and
              (b) requirements on the procedure for lifting the suspension as it considers appropriate.
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Requirements for withdrawal of registration at the request of the Audit Principal or their Registered Auditor

            • AUD 3.3.3

              (1) A request for withdrawal of an Audit PrincipalG 's registration by the relevant Registered AuditorG or Audit PrincipalG must be made by completing and submitting the appropriate form in AFN.
              (2) Before granting a request for withdrawal the DFSAG must first be satisfied that:
              (a) the Registered AuditorG is able to continue to comply with Rule 2.3.2;
              (b) the Registered AuditorG has made appropriate arrangements with respect to its existing audit clients who are Relevant PersonsG ; and
              (c) any other matter which the DFSAG would reasonably expect to be resolved has been resolved.
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

      • AUD 4 General Obligations

        • AUD 4.1 Application

          • AUD 4.1.1

            This chapter applies to every Registered AuditorG .

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 4.2 Employees' suitability and continuing professional development

          • AUD 4.2.1

            (1) A Registered AuditorG must ensure that all EmployeesG , including its Audit PrincipalsG , engaged in audit work for Relevant PersonsG :
            (a) remain fit and proper to carry out their role; and
            (b) undertake continuing professional development in accordance with the requirements of:
            (i) the Recognised Professional BodyG of which the EmployeeG is a member;
            (ii) any applicable internal standards of the Registered AuditorG ; and
            (iii) any direction given by the DFSAG .
            (2) A Registered AuditorG must maintain records of continuing professional development undertaken by EmployeesG , including its Audit PrincipalsG .
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 4.3 Professional indemnity insurance

          • AUD 4.3.1

            (1) A Registered AuditorG must at all times hold adequate and appropriate professional indemnity insurance which covers all types of civil liability arising in connection with the conduct of the Registered AuditorG 's business by EmployeesG , including its Audit PrincipalsG .
            (2) A Registered AuditorG must arrange to hold appropriate run off cover that covers a period of 2 years after its registration as a Registered AuditorG is withdrawn.
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • AUD 4.3.2

            A Registered AuditorG must, annually, provide to the DFSAG information relating to the Registered AuditorG 's professional indemnity insurance policy, including the terms and duration of, and any claims made under, the policy.

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • AUD 4.3.3

            A Registered AuditorG must maintain proper records and all relevant information relating to:

            (a) its professional indemnity insurance, including the terms of cover and its duration;
            (b) how it established the adequacy and appropriateness of the cover for the purposes of Rule 4.3.1(1); and
            (c) insurance claims made under its professional indemnity insurance policy.
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • AUD 4.3.4

            A Registered AuditorG must, upon a request by the DFSAG , provide to the DFSAG promptly the information referred to in Rule 4.3.3.

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 4.4 Working Papers

          • AUD 4.4.1

            A Registered AuditorG must, subject to Rule 4.4.2, maintain sufficient Working PapersG to:

            (a) facilitate the proper performance of its functions and duties under these Rules; and
            (b) be able to demonstrate to the DFSAG that it properly performed its functions and duties under these Rules.
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • AUD 4.4.2

            If a Registered AuditorG :

            (a) provides Audit ServicesG to a Relevant PersonG which is part of a GroupG ; and
            (b) in providing those Audit ServicesG , relies on Working PapersG relating to the GroupG or to another member of the GroupG , including Working PapersG prepared by another auditor,

            it is not required to maintain a copy of the Working PapersG referred to in (b) but must ensure that a copy of those Working PapersG is readily accessible to it.

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

            • AUD 4.4.2 Guidance

              A Registered AuditorG should be aware that the requirement in Rule 4.4.2 extends to a GroupG or member of a GroupG , whether inside or outside the DIFCG .

              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • AUD 4.4.3

            A Registered AuditorG must, upon request by the DFSAG , provide to the DFSAG promptly copies of Working PapersG referred to in Rule 4.4.1 and Rule 4.4.2.

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 4.5 Records

          • AUD 4.5.1

            (1) A Registered AuditorG must maintain the records referred to in this chapter for a period of at least 6 years. In the case of the Working PapersG referred to in Rule 4.4.1 or 4.4.2, those records must be kept or be accessible (as the case may be) for a period of 6 years from the date of completion of each audit carried out.
            (2) The records, however stored, must be capable of production in English on paper and within a reasonable period not exceeding 3 business days if requested by the DFSAG .
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 4.6 Notification of changes and events

          • AUD 4.6 Guidance

            1. This section sets out Rules on specific events, changes or circumstances that require notification to the DFSAG and outlines the process and requirements for notifications.
            2. A Registered AuditorG should be aware that it will breach Article 66 of the Regulatory LawG if it provides information to the DFSAG which is false, misleading or deceptive, or conceals information where the concealment of such information is likely to mislead or deceive the DFSAG .
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Changes in core information

            • AUD 4.6.1

              A Registered AuditorG must provide the DFSAG with reasonable advance notice of any change in:

              (a) the Registered Auditor'sG name;
              (b) any business or trading name under which the Registered AuditorG carries on its business;
              (c) the legal nature of the Registered AuditorG ;
              (d) the address of the Registered Auditor'sG principal place of business in the DIFCG , where applicable;
              (e) (in the case of a BranchG ) its registered office or head office address;
              (f) the details of any other branches or offices of the Registered AuditorG ;
              (g) the details of any affiliated offices, associations or networks; and
              (h) its Audit PrincipalsG .
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Events having a regulatory impact

            • AUD 4.6.2

              A Registered AuditorG must notify the DFSAG immediately if it becomes aware, or has reasonable grounds to believe, that any of the following matters may have occurred or may be about to occur:

              (a) the Registered AuditorG fails to satisfy the fit and proper requirements in Rule 2.2.3 or its continuing obligations in section 2.3;
              (b) any of its Audit PrincipalsG no longer meets the registration criteria in Rule 2.4.2;
              (c) any of its Audit PrincipalsG fails to comply with his obligations under DFSAG administered legislation;
              (d) any claim is made against the Registered AuditorG relating to the provision of Audit ServicesG , including but not limited to, a claim lodged against the Registered Auditor'sG professional indemnity insurance policy;
              (e) the Registered AuditorG or any of its EmployeesG , including its Audit PrincipalsG , breaches a Rule;
              (f) the Registered AuditorG or any of its EmployeesG , including its Audit PrincipalsG , breaches any requirement imposed by any applicable law relating to the provision of Audit ServicesG ; or
              (g) there is a significant failure in the Registered Auditor'sG systems or controls.
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Action by other regulators

            • AUD 4.6.3

              A Registered AuditorG must notify the DFSAG immediately of:

              (a) the grant or refusal of any application for, or revocation of, authorisation of the Registered AuditorG to carry on audit services in any jurisdiction outside the DIFCG ;
              (b) the Registered AuditorG becoming aware that a government or other regulatory body (including a self-regulatory body) exercising powers and performing functions related to the regulation of auditors has started an investigation into the conduct of the Registered AuditorG or of any of its Audit PrincipalsG ;
              (c) the appointment of inspectors, however named, by a governmental or other regulatory body (including a self-regulatory body) exercising powers and performing functions related to the regulation of auditors, to investigate the affairs of the Registered AuditorG or any of its Audit PrincipalsG ; or
              (d) the imposition of disciplinary measures or sanctions on the Registered AuditorG or any of its Audit PrincipalsG in relation to its conduct of audit work by a government or other regulatory body exercising powers and performing functions related to the regulation of auditors.
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

              • AUD 4.6.3 Guidance

                The notification requirement in Rule 4.6.3(b) extends to investigations relating to any EmployeeG provided the conduct investigated relates to or impacts on the affairs of the Registered AuditorG .

                Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 4.7 Communication with the DFSA

          • AUD 4.7.1

            A Registered AuditorG must ensure that any communication with the DFSAG is conducted in the English language.

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]
            [Amended] DFSA RM181/2016 (Made 19 June 2016). [VER2/08-16]

            • AUD 4.7.1 Guidance

              GEN section 6.10 sets out Rules about how information is to be provided to the DFSAG .

              Derived from DFSA RM181/2016 (Made 19 June 2016). [VER2/08-16]

        • AUD 4.8 Annual information return

          • AUD 4.8.1

            A Registered AuditorG must complete the Annual Information ReturnG form in AFN for each calendar year and submit the form to the DFSAG by 31 January of the following year.

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 4.9 Anti-Money Laundering

          • AUD 4.9 Guidance

            A Registered AuditorG should be aware of, and comply at all times with, its AMLG obligations which are contained in the AMLG module of the DFSAG Rulebook.

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 4.10 Disclosure of regulatory status

          • AUD 4.10.1

            A Registered AuditorG must not:

            (a) misrepresent its regulatory status with respect to the DFSAG expressly or by implication; or
            (b) use or reproduce the DFSAG logo without express written permission from the DFSAG and in accordance with any conditions for use imposed by the DFSAG .
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

    • Part 3 Appointment and Resignation of Auditor and Conduct of Audits

      • AUD 5 Appointment and Resignation of Auditor

        • AUD 5.1 Application

          • AUD 5.1.1

            This chapter applies to every AuditorG .

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 5.2 Consent to appointment as an Auditor

          • Prescribed non-audit services

            • AUD 5.2.1

              The following services are prescribed non-audit services for the purposes of Article 99A(2)(c) of the Regulatory Law:

              (a) the Compliance OfficerG function;
              (b) the internal audit function; and
              (c) the preparation of accounting records or financial statements.
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

              • AUD 5.2.1 Guidance

                An AuditorG is prohibited from acting as an AuditorG for an Authorised PersonG , Public Listed CompanyG or Domestic FundG if it is providing any of the services set out in Rule 5.2.1 to the Authorised PersonG , Public Listed CompanyG or the Fund ManagerG , TrusteeG or member of a Governing BodyG of the Domestic FundG . This is because the provision of such non-audit services creates a risk of a fundamental conflict of interest that would potentially prevent the AuditorG from carrying out Audit ServicesG properly. However, AuditorsG should be aware that there may also be other types of non-audit services which can create a conflict of interest and that may need to be considered on a case by case basis under Article 99A(2)(a) and (b) of the Regulatory LawG to determine whether such other non-audit services create a conflict of interest or lack of independence that affect its ability to provide Audit ServicesG to the Authorised PersonG , Public Listed CompanyG or Domestic FundG .

                Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • Rotation of an Audit Principal of a Public Listed Company

            • AUD 5.2.2

              (1) A Registered AuditorG must not consent to an appointment or continue to act as the AuditorG of a Public Listed CompanyG if the Audit PrincipalG who has responsibility for the conduct of the audit of the Public Listed CompanyG has acted as Audit PrincipalG in relation to that CompanyG for a period exceeding the maximum period permitted under the Code of Ethics for Professional AccountantsG and has not been rotated as required under that Code.
              (2) The period referred to in (1) is prescribed for the purposes of Article 99A(2)(d) of the Regulatory LawG .
              Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 5.3 Resignation of Auditor

          • AUD 5.3.1

            (1) An AuditorG must notify the DFSAG in writing if it resigns due to the failure by an Authorised PersonG , Public Listed CompanyG or Domestic FundG to address significant concerns which have previously been raised by the AuditorG with the senior management of that PersonG .
            (2) The notification under (1) must include sufficient details of the PersonG concerned, the concerns raised and the failure by that PersonG to address the concerns.
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

      • AUD 6 Conduct of Audits and Preparation of Audit Reports

        • AUD 6.1 Application

          • AUD 6.1.1

            This chapter applies to every AuditorG .

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD 6.2 Conduct of audits and contents of audit reports

          • AUD 6.2.1

            An AuditorG must conduct an audit, and prepare the contents of any relevant audit report, referred to in Rules in accordance with the standards in the following table:

            Type of Report Relevant Standards Report Contents
            Financial Statements Auditor's ReportG International Standards on Auditing ISA 700
            Regulatory Return Auditor's ReportG for a Domestic FirmG International Standards on Assurance EngagementG (ISAE) or International Standards on Related ServicesG (ISRS) A1.1.1
            Regulatory Return Auditor's ReportG for a Branch A1.1.2
            Client Money Auditor's ReportG A2.1.1
            Insurance Monies Auditor's ReportG A3.1.1
            Safe Custody Auditor's ReportG A4.1.1
            Fund Auditor's ReportG In accordance with Chapter 9 of the Collective Investment Rules module of the DFSA Rulebook A5.1.1
            Public Listed Company Auditor's ReportG In accordance with Chapter 5 of the MKT module of the DFSA Rulebook A6.1.1

            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

          • AUD 6.2.2

            (1) An AuditorG must ensure that every audit report produced by it includes the name of:
            (a) the Audit PrincipalG , if it is a Registered AuditorG ; or
            (b) the relevant individual responsible for managing the audit work relating to the relevant audit report, if it is not a Registered AuditorG .
            (2) An individual referred to in (1)(a) or (b) is not by reason of being named in an audit report in accordance with (1), subject to any civil liability to which he would not otherwise be subject.
            Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

    • AUD App 1 Regulatory Returns Auditors Report

      • AUD A1.1.1

        In producing a Regulatory Returns Auditor's ReportG for a Domestic FirmG , an AuditorG must state whether:

        (a) it has received all the necessary information and explanations for the purposes of preparing the report to the DFSAG ;
        (b) the Authorised Person'sG regulatory returns, specified in PIBG , PING or AMIG , to the DFSAG have been properly reconciled with the appropriate audited financial statements;
        (c) the Authorised PersonG 's regulatory returns, specified in PIBG , PING or AMIG , submitted to the DFSAG on a quarterly basis have been properly reconciled with the appropriate annual returns;
        (d) the Authorised Person'sG financial resources as at its financial year end have been properly calculated in accordance with the applicable Rules in PIBG , PING or AMIG (as the case may be) and are sufficient to meet the relevant requirements;
        (e) (in the case of an Authorised FirmG other than an InsurerG ) the Capital ResourcesG have been calculated in accordance with the applicable Rules in PIBG ;
        (f) (in the case of an Authorised FirmG other than an Insurer) the Capital ResourcesG maintained exceed the Capital RequirementG in accordance with the applicable Rules in PIBG ;
        (g) (in the case of an Authorised FirmG ) the regulatory returns specified in PIBG or PING have been properly prepared by the Authorised FirmG in accordance with the applicable rules in PIBG or PING ;
        (h) (in the case of an Authorised FirmG ) the Authorised FirmG has kept proper Accounting RecordsG in accordance with the applicable Rules in PIBG or PING ;
        (i) (in the case of an Authorised FirmG which is subject to Expenditure Based Capital MinimumG ) the Expenditure Based Capital MinimumG has been calculated in accordance with the applicable Rules in PIBG ; and
        (j) (in the case of an Authorised FirmG in Category 3B, 3C or 4, and which is subject to Expenditure Based Capital MinimumG ) the Capital RequirementG maintained exceeds its Expenditure Based Capital MinimumG and has been maintained in the form of liquid assets in accordance with the applicable Rules in PIBG .
        Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

      • AUD A1.1.2

        In producing a Regulatory Returns Auditor's ReportG for a BranchG , an AuditorG must state whether;

        (a) the Authorised Person'sG regulatory returns have been properly reconciled with the Branch'sG financial statements; and
        (b) in the case of an Authorised FirmG ;
        (i) the regulatory returns specified in PING or PIBG have been properly prepared by the Authorised FirmG in accordance with the applicable rules in PIBG or PING ; and
        (ii) the Authorised FirmG has kept proper Accounting RecordsG in accordance with the applicable Rules in PIBG or PING .
        Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

    • AUD App 2 Client Money Auditor's Report

      • AUD A2.1.1

        In producing a Client Money Auditor's ReportG , an AuditorG must state as at the date on which the Authorised Firm'sG audited statement of financial position was prepared:

        (a) the amount of Client MoneyG an Authorised FirmG was holding and controlling in accordance with COB chapter 6 and with the Client Money ProvisionsG ; and
        (b) whether:
        (i) the Authorised FirmG has maintained throughout the year systems and controls to enable it to comply with the relevant provisions of COB chapter 6 and, if applicable, COB App5;
        (ii) the Authorised Firm'sG controls are such as to ensure that Client MoneyG is identifiable and secure at all times;
        (iii) any of the requirements in COB chapter 6 and the Client Money ProvisionsG have not been met;
        (iv) if applicable, Client MoneyG belonging to Segregated ClientsG has been segregated in accordance with the Client Money ProvisionsG ;
        (v) if applicable, the Authorised FirmG was holding and controlling the appropriate amount of Client MoneyG in accordance with COB chapter 6 and with the Client Money ProvisionsG as at the date on which the Authorised Firm'sG audited statement of financial position was prepared;
        (vi) the AuditorG has received all necessary information and explanations for the purposes of preparing the report to the DFSAG ; and
        (vii) if applicable, there have been any material discrepancies in the reconciliation of Client MoneyG .
        Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD A2.1.1 Guidance

          Where an Authorised FirmG does not hold or control any Client MoneyG as at the date on which the Authorised Firm'sG audited statement of financial position was prepared, the DFSAG expects that a nil balance be stated to comply with Rule A2.1.1 (a) in this Appendix.

          Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

    • AUD App 3 Insurance Monies Auditor's Report

      • AUD A3.1.1

        In producing an Insurance Monies Auditor's ReportG , an AuditorG must state as at the date on which the Authorised Firm'sG audited statement of financial position was prepared:

        (a) the amount of Insurance MoniesG an Authorised FirmG was holding and controlling in accordance with COB section 7.12; and
        (b) whether:
        (i) the Authorised FirmG has maintained throughout the year systems and controls to enable it to comply with the relevant provisions of COB section 7.12;
        (ii) the Authorised Firm'sG controls are such as to ensure that Insurance MoniesG are identifiable and secure at all times;
        (iii) any of the requirements in COB section 7.12 have not been met;
        (iv) if applicable, the Authorised FirmG was holding and controlling an appropriate amount of Insurance MoniesG in accordance with COB section 7.12 as at the date on which the Authorised Firm'sG audited statement of financial position was prepared;
        (v) the AuditorG has received all necessary information and explanations for the purposes of preparing the report to the DFSAG ; and
        (vi) if applicable, there have been any material discrepancies in the reconciliation of Insurance MoniesG .
        Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

        • AUD A3.1.1 Guidance

          Where an Authorised FirmG does not hold or control any Insurance MoniesG as at the date on which the Authorised Firm'sG audited statement of financial position was prepared, the DFSAG expects that a nil balance be stated to comply with Rule A3.1.1 (a) in this Appendix.

          Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

    • AUD App 4 Safe Custody Auditor's Report

      • AUD A4.1.1

        In producing a Safe Custody Auditor's ReportG , an AuditorG must state as at the date on which the Authorised Firm'sG audited statement of financial position was prepared:

        (a) the extent to which the Authorised FirmG was holding and controlling Client InvestmentsG or Providing CustodyG ; and
        (b) whether:
        (i) the Authorised FirmG has, throughout the year, maintained systems and controls to enable it to comply with the Safe Custody ProvisionsG in COB App6;
        (ii) the Safe Custody InvestmentsG are registered, recorded or held in accordance with the Safe Custody ProvisionsG ;
        (iii) there have been any material discrepancies in the reconciliation of Safe Custody Investments;
        (iv) the AuditorG has received all necessary information and explanations for the purposes of preparing this report to the DFSAG ; and
        (v) any of the requirements of the Safe Custody ProvisionsG have not been met.
        Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]
        [Amended] RM189/2016 (Made 7th December 2016). [VER03/02-17]

        • AUD A4.1.1 Guidance

          1. Where an Authorised FirmG does not hold or control any Client InvestmentsG , Arrange CustodyG or Provide CustodyG as at the date on which the Authorised Firm'sG audited statement of financial position was prepared, the DFSAG expects that such fact be stated to comply with Rule A4.1.1 (a) in this Appendix.
          2. In producing a Safe Custody Auditor's ReportG an AuditorG will need to consider which parts of COB App 6 are relevant to the Authorised FirmG and only include an opinion to the extent relevant to the Authorised Firm'sG activity.
          Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]
          [Amended] RM189/2016 (Made 7th December 2016). [VER03/02-17]

    • AUD App 5 Fund Auditor's Report

      • AUD A5.1.1

        In producing a Fund Auditor's ReportG , an AuditorG must state:

        (a) whether the financial statements have been properly prepared in accordance with the financial reporting standards adopted by the FundG in accordance with the Collective Investment Rules in the RulebookG and the ConstitutionG ;
        (b) whether the financial statements give a true and fair view of the financial position of the FundG , including the net income and the net gains or losses of the Fund PropertyG , or, as the case may be, the Fund PropertyG attributable to the Sub-FundG for the annual accounting period in question and the financial position of the FundG or Sub-FundG as at the end of the annual accounting period;
        (c) whether proper accounting records for the FundG , or as the case may be, Sub-FundG have not been kept, or that the financial statements are not in agreement with the accounting records and returns, or that the financial statements do not comply with the applicable financial reporting standards;
        (d) whether it has been given all the information and explanations which, to the best of its knowledge and belief, are necessary for the purposes of its audit;
        (e) whether the information given in the report of the directors or in the report of the Fund ManagerG for that period is consistent with the financial statements; and
        (f) any other matter or opinion required by the Regulatory LawG or the Rules.
        Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]

    • AUD App 6 Public Listed Company Auditor's Report

      • AUD A6.1.1

        In producing a Public Listed Company Auditor's ReportG , an AuditorG must state whether the financial statements have been properly prepared in accordance with the Rules in MKTG .

        Derived from DFSA RM130/2014 (Made 21st August 2014). [VER1/06-14]