The Central Bank of the United Arab Emirates issued a warning against one of the financing companies operating in the UAE, on January 17, 2021, pursuant to the provisions of Articles 98, 107 (D) and 137 of Federal Decree-Law No. 14 of 2018 regarding the Central Bank and the regulation of financial institutions and activities, and Article 19 5 of the Finance Companies Law issued on April 24, 2018.
“Warning” is an administrative penalty according to the provisions of the Central Bank Law. This penalty was imposed for non-compliance by the company with the finance companies system and the Central Bank’s instructions related to the periodic change of the external auditor..
This administrative penalty takes into account the failure of the top management of the finance company to comply with the aforementioned system, as well as the instructions specified by the Central Bank regarding the periodic change of the external auditor during the 6-year mandate period.
The reason for the periodic change of auditor process is to reduce errors and fraud associated with the audit of financial statements. The penalty also takes into account the relatively short period of time for the violation, and its prompt treatment by the company.
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