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KPMG has been blocked from winning new audit contracts in Abu Dhabi after regulators removed the Big Four from the list of accountants authorized to sign companies’ financial statements.
Abu Dhabi Accountability Authority’s move comes weeks after Dubai established independent watchdog KPMG fine and one of its former partners were fined $2 million for a failed audit of Abraaj, an emerging-markets private equity group that collapsed in 2018.
The ban will add to the challenges faced by Emilio Pera, the veteran partner elected on Friday as the new chief executive of KPMG Lower Gulf after months of turbulence at the business, which operates in the United Arab Emirates and Oman.
The appointment follows the resignation of chairman and chief executive Nader Haffar last month after allegations of nepotism, cronyism and poor governance have plagued the company since the summer. The company.
turmoil, including some partner requirements KPMG The international suspension of the Haffar and Lower Gulf boards has raised questions about the consistency of KPMG’s global local corporate network standards and the effectiveness of the Big Four’s international bosses in policing them.
The ADAA did not disclose the reasons for removing KPMG from its list of approved statutory auditors, which is updated every three months, and did not immediately respond to a request for comment. The ADAA oversees government entities and state-linked companies for transparency.
KPMG Lower Gulf said its application to renew its statutory audit license was “returned with a request for further information” and that “the recent change in status does not affect our current statutory audit engagement”.
“We are actively working with them to resolve any technical issues,” the firm said, adding that it was “committed to providing the highest quality audit services”.
Pera, who will take over on January 1, was elected after a vote by equity partners in the Lower Gulf firm. He beat out competition from audit director Osama Harmouche and consultant Wejdi Harzallah.
The election was overseen by a KPMG committee and law firm Freshfields after accusing the previous voting process that extended Hafar’s term until 2027 as a “scam”.
Pera will be tasked with responding to Freshfields’ governance review recommendations and reassuring the company’s 3,400 clients in the region, including ADNOC and sovereign wealth fund Mubadala Investment Company, that business will be stabilized.
After the riots at KPMG Lower Gulf, several partners left the firm and rivals tried to poach dissatisfied partners and staff.
Pera had headed Gulf’s audit department after the Abraaj scandal but was sacked before being named interim tax chief earlier this year.
He said he was “deeply grateful” to Hafar and wanted to “build on what he has achieved”. “We continue to strive to be the most trusted and trusted company of choice for our customers.”
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