The Dubai Financial Services Authority (DFSA) recently released its Thematic Review on Audit Working Papers Archiving and Retention a key document examining how Registered Auditors (RAs) operating in the Dubai International Financial Centre (DIFC) are managing the archiving, retention, and integrity of audit documentation.
Why This Matters
In the DIFC’s regulated environment, Audit Working Papers are critical to maintaining audit quality and regulatory compliance. They form the basis for auditors’ reports and provide necessary assurance to stakeholders. Poor documentation practices, such as late archiving, incomplete records, or alterations can significantly compromise the reliability of audited financial statements, exposing audit firms to compliance failures, litigation, and reputational risk.
Key Findings
The DFSA’s review found that while most RAs have basic systems and policies in place, notable gaps remain:
- Delayed archiving beyond the 60-day benchmark (required under ISQM 1)
- Inadequate monitoring and remediation processes
- Electronic system flaws (e.g., backdating, lack of audit trails)
- Failure to produce records within DFSA’s 3-day request window
- Lack of accountability metrics in quality control evaluations
Good Practices
The DFSA also spotlighted examples of effective governance:
- Archiving policies stricter than the 60-day requirement
- Automated compliance reminders and exception tracking
- Segregation of duties within audit documentation systems
- Prompt update of policies following DFSA surveys
DFSA's Regulatory Outlook
This review underscores the DFSA’s ongoing commitment to transparency, audit integrity, and regulatory supervision in DIFC. Regulatory actions, including enforceable undertakings and warning letters were taken where serious non-compliance was identified. The DFSA encourages all Registered Auditors to reassess their System of Quality Management (SoQM) and implement robust improvements where needed.
Call to Action
Audit firms in DIFC must treat working paper archiving and retention not just as a compliance task, but as a strategic pillar of their quality management frameworks. With new requirements such as electronic-only working papers (effective June 2024), proactive upgrades in audit technology systems, staff training, and internal controls are essential.
Disclaimer: This blog is for informational purposes only and does not constitute legal or regulatory advice. Readers are encouraged to consult official DFSA publications or professional advisors for specific guidance.
