Text size:

  • Small
  • Normal
  • Large

Auditors face closer watch after corporate scandals

Firms are under increased regulatory scrutiny as concerns about book-keeping rise.

Auditors will come under increased regulatory scrutiny after a series of corporate scandals that have raised concerns about book-keeping practices at local firms. Paul Koster, the chief executive of the Dubai Financial Services Authority (DFSA), said the UAE's regulatory bodies were paying closer attention to the quality of financial statements and working together to come up with stricter standards and auditing systems.

"We are clearly stepping up our relationship with ESCA [the Emirates Securities and Commodities Authority] and the Central Bank," Mr Koster said. "We want to bring a level playing field for companies in the UAE. We all feel audit oversight is critical." The DFSA has auditing oversight for licensed companies and is planning to expand the practice to all companies listed on NASDAQ. ESCA is charged with overseeing auditors for all listed companies.

Mr Koster said a major question in the financial world was who should pay for auditing of financial statements. Citing lapses in audit quality over the past few years, he said one option for making the process more independent could be the creation of a central trust that would collect money from companies and independently hire auditors. "It's a really contentious issue," he said. "Governments paying doesn't really work."

One particular problem is valuations, which can be manipulated by financial advisers to inaccurately reflect the worth of assets and mislead investors, Mr Koster said. "Valuations need to be looked at far closer," he said. "There needs to be testing of the prices." These issues will be discussed this week, when regulators from 33 countries convene in Abu Dhabi for the International Forum of Independent Audit Regulators plenary meeting.

bhope@thenational.ae

Back to the top

More articles


Editor's Picks

 Marina Square apartments Reem Island: Q1 2% rise. Studio - Dh65-68,000. 1BR - Dh75-95,000. 2BR - Dh110-145,000. 3BR - Dh170-190,000. Q1 2013-Q1 2014 no change. Sammy Dallal / The National

In pictures: Where Abu Dhabi rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Abu Dhabi have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 A Brabus Mercedes 6x6 Sports Utility Vehicle is readied for display during Auto China 2014 in Beijing, on April 20. Adrian Bradshaw / EPA

In pictures: Auto China 2014 exhibition

Leading automakers have gathered in Beijing for the kickoff of China’s biggest car show, but lacklustre growth and environmental restrictions in the world’s largest car market have thrown uncertainty into the mix. More than 1,100 vehicles are being showcased.

 The New York Stock Exchange. Rising interest rates will shift momentum away from bonds and back towards risk assets such as stocks. Richard Drew / AP Photo

Plan ahead for rising interest rates

It is now over five years since the majory central banks slashed interest rates to record low but that is all about to change. So, how will rising interest rates affect you?

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National