Title: Announcement regarding issuance of Disciplinary Board Resolution No. (42/2024 Disciplinary Board) (40/2024 Authority) and imposition of a fine and warning against Abdulrahman Mubarak Al Qaoud (Abdulrahman Al-Qaoud & Partners Public Accountants) in his capacity as a former external auditor of a company for violating the rules of Securities Activities and Registered Persons

Announcement regarding issuance of Disciplinary Board Resolution No. (42/2024 Disciplinary Board) (40/2024 Authority) and imposition of a fine and warning against Abdulrahman Mubarak Al Qaoud (Abdulrahman Al-Qaoud & Partners Public Accountants) in his capacity as a former external auditor of a company for violating the rules of Securities Activities and Registered Persons.

For the following reasons:
He violated the provision of Article (3-4-5) of Module Five (Securities Activities and Registered Persons) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, which stipulates:

“The Authority may review the registered Auditors’ work in examining the accounts of the Clients mentioned in Article (3-4-1) of this Chapter and to ascertain whether they were performed in accordance with the International Financial Reporting Standards, the International Auditing Standards and the disclosure requirements issued by the Authority…”.

This is due to the following:
1- He failed to classify the Item of “Investments in Associates” as non-current assets according to the requirements of Paragraph (15) of the International Accounting Standard “IAS 28 Investments in Associates and Joint Ventures”. In addition, he failed to comply with the requirements of the International Standard on Auditing (ISA 570) Going Concern in the independent auditor’s report, despite the company’s current liabilities’ exceeding of the current assets. This resulted in his non-compliance with the requirements of Paragraph (A7)- Item (c)  of the International Standard on Auditing (ISA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report), and his failure to ensure the company’s fulfilment of the requirements of Paragraph (25) and (26) of the International Accounting Standard (IAS 1) without providing any remarks in his report issued on the financial statements of the financial year that ended on 31/12/2023.

2- It was proven to the CMA through reviewing the financial statements of the financial year that ended on 31/12/2023 and testing the cash flow statement (the opening balances of 2022 in particular) that there was an error in viewing the balances of some Items of this statement.
Based on what was clarified above, the inputs and balances of the statement’s Items do not correspond to the final result of the cash and cash equivalent in the end the opening balance year of 2022 in the financial statements of the year that ended on 31/12/2023.

The Resolution included the infliction of the following penalty: -
“Levying a fine against Abdulrahman Mubarak Al Qaoud (Abdulrahman Al-Qaoud & Partners Public Accountants) in his capacity as a former external auditor of a company in an amount of KWD 2,000 (two thousand Dinars) for the first part of the attributed violation and levying a warning for the second part of the violation,  with a directive to avoid repeating such violations in the future”.

In this regard, the CMA emphasizes the implementation of CMA Law and its Executive Bylaws on all persons dealing in securities activities, and urges them to comply with these rules in order to promote investors' confidence, create a sound investment environment, and implement the Law according to the principles of fairness, transparency, and integrity in line with the best international practice.