GlobalData
2 min read
The Dubai Financial Services Authority (DFSA) has published a Thematic Review report highlighting deficiencies in audit working papers archiving and retention among registered auditors (RAs) in the Dubai International Financial Centre (DIFC).
While most RAs have established policies and procedures, the review identified issues in timely archiving, system controls, and post-archiving audit trail integrity.
Some RAs lacked formal policies, exceeded the 60-day archiving period, or inappropriately grouped working papers for group audit engagements.
Over-reliance on group policies with limited local implementation and inadequate monitoring processes were also noted.
The report found that 59% of RAs use a mix of electronic and paper-based working papers, with paper used for confirmation letters, signed financial statements, and administrative checklists, while 41% rely solely on electronic systems, which are now mandatory in the DIFC.
Deficiencies included lost working papers, delays in providing records within the required three business days, and indefinite retention without risk assessment.
Non-compliance with International Standard on Auditing (ISA) 230 and International Standard on Quality Management (ISQM) 1 was observed in 59% of RAs, often due to ineffective monitoring.
Issues such as staff workload constraints, poor handover procedures, incorrect auditor report dates, and technical system problems contributed to archiving failures, the report said.
Despite these gaps, good practices were noted. About 24% of RAs archive within shorter periods than 60 days.
Some employ automated completeness checks, role-based access controls, and robust monitoring systems with reminders and exception tracking.
As of 31 December 2024, the DFSA oversaw 21 RAs auditing 774 regulated entities, including public listed companies, domestic authorised firms, authorised market institutions, and domestic funds.
The DFSA emphasised that archiving and retention will remain a key focus for future supervisory activities.
"DFSA review uncovers gaps in audit documentation among RAs" was originally created and published by The Accountant, a GlobalData owned brand.
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